I wish to share my time with Deputy Boylan.
Adjournment Debate. - Higher Education Grants.
Is that agreed? Agreed.
Hundreds of students from Donegal and possibly thousands from the rest of the Republic are pursuing third level courses in Northern Ireland and the United Kingdom. We all value this facility very much. Surplus places are available in colleges in those jurisdictions and many young people from the Republic can avail of third level education who might otherwise be bypassed because of a shortage of places here.
There is a long-established tradition that students from Donegal and Border counties avail of these courses as they are more convenient than courses elsewhere. Some students return home every evening and many others return home for the weekends. Since last year, however, students who qualify for maintenance grants have suffered a drastic reduction in the value of the grant paid. This is due to the impact of the exchange rates on the value of the grant. At present, the maximum maintenance grant paid is £1,650 punts per annum. When this amount is converted into sterling, its value reduces by 15 per cent or more, leaving the student with approximately £1,400 sterling. This represents a very serious reduction in a person's income. Which of us would be prepared to accept a 15 per cent reduction in income? It is unthinkable and unbelievable that we would.
Students already find it exceedingly difficult to survive on the maximum grant of £1,650 punts per annum without losing money on conversion. My understanding is that the regulations changed last year. Until 1997, students in Northern Ireland and the United Kingdom were paid on a punt for pound sterling basis. They are now at the mercy of exchange rates; there has been a gap of approximately 15 per cent most of this year. Students are also subject to an administration fee which costs them a further percentage loss. As a result of this, students from the Republic who have their maintenance grants converted to sterling are being subjected to severe hardship and anxieties. After all, they only qualify for the maximum maintenance grant because they meet the requirements of a stringent means test. Other sources of income are not readily available and they often have to cut back on essentials such as food, heating and so on. This is very unfair to students who are required to leave the jurisdiction to avail of third level education.
I raised this urgent matter at a meeting of the County Donegal VEC last Monday and there was unanimous agreement that steps must be taken to redress the serious situation in which these unfortunate students find themselves. We should revert to the pre-1997 position when students were paid on a punt for pound sterling basis. I understand the local authority or VEC is paid in punts and gives the students the sterling value, having deducted transaction costs and exchange rate differences. I am informed by students that they could get a more favourable rate themselves than some of the local bodies. I urge the Minister to have this matter investigated urgently and to make the necessary arrangements for students to get the full value of the maintenance grants.
Accommodation costs in Northern Ireland have escalated this year with the advent of peace there. The price of property has increased and, as a consequence, so has the cost of rents, lettings and leasings. The cumulative effect of all these factors is that students from the Republic are finding it difficult to survive. I appeal to the Minister to recognise this and take the necessary steps to redress this imbalance.
I thank Deputy McGinley for sharing his time on this important and serious issue which relates to the exchange rate mechanism disadvantage affecting some young people. Some students travel to Northern Ireland and the UK by choice to pursue third level courses there, while others do so because they cannot secure places in the Republic. I encourage young people to travel to Northern Ireland and the UK as there is no better way to build up relationships than for young people from diverse backgrounds to mix together. The primary reason for their travel is the pursuit of their studies to achieve the qualifications necessary to secure meaningful employment.
The very fact these students qualify for grants in the first instance indicates they come from low income backgrounds. Their families are not, therefore, in a position to make up the 15 per cent shortfall they are experiencing through no fault of their own. It is not much to ask that these students would be paid on a pro rata basis in regard to the punt/sterling exchange rate. I have had numerous representations on this matter which is particular to the Border area.
We can all recall our student days when every penny counted and when one often ran short of money before the weekend. It is not helpful to students to be put in that position as it does not allow them to further their education in a suitable climate. I urge the Minister to take this serious issue on board and address it immediately, not in the long term.
Since 1996, the student support schemes have been extended to provide maintenance grants to undergraduate students pursuing approved third level courses in other EU member states. Prior to this, such grants were only payable to students pursuing approved courses in the Republic and Northern Ireland. In this context, following discussions with the local authorities regarding the necessary administrative arrangements, it was agreed that students pursuing approved courses in other EU member states, including Northern Ireland, would be paid the value of the grant in the currency of the country in which they were studying. It was further agreed that the value of the maintenance grant to be paid in all circumstances would be the Irish value converted to the currency of the relevant country in which the student was studying at the prevailing exchange rate. The Department of Education and Science confirmed these arrangements in a letter dated 8 November 1996 to all local authorities and vocational education committees and a reminder was issued on 5 December 1997.
Previously, students studying in Northern Ireland were paid the amount of the grant in sterling without reference to exchange rates. Those students studying in Northern Ireland who were assessed under the student support schemes prior to 1996 continued to receive their grants in sterling without reference to exchange rates. Students who commenced their studies from 1996 are paid under the revised arrangements. We are satisfied these arrangements are equitable and efficient and we are not in a position to supplement grant aid for students pursuing courses in other EU member states, including Britain and Northern Ireland. Moreover, such an approach could well give rise to anomalies and claims of inequitable treatment between students studying in different countries.
It has been the practice in recent years to increase maintenance grants in line with inflation as measured by the change in the consumer price index for the period mid-February to mid-February each year. The inflation figure as provided by the Central Statistics Office for the period mid-February 1997 to mid-February 1998 was 1.7 per cent. The value of the maintenance grant was therefore increased by 1.7 per cent for the 1998-9 academic year. The full maintenance grant for the current academic year has been increased to £1,652 at the non-adjacent rate and £660 at the adjacent rate.
The Deputies will be interested to note that some 60 per cent of certificate and diploma students in the technological sector and 40 per cent of students in the university sector are eligible for maintenance grants. In the 1996-7 academic year almost 48,000 students received grants under these schemes. The 1996 cost of the schemes was £91 million.
It has also been the practice in recent years to increase the reckonable income limits in line with movements in the average industrial wage. The figures are provided by the Central Statistics Office and are computed in each case to March of the previous year. The average industrial wage increase for the period March 1996 to March 1997 was 3.2 per cent. The reckonable income limits for the 1998-9 academic year were therefore increased by 3.2 per cent. This increase was also applied to the allowance by which the income limits may be increased in respect of other family members pursuing a course of study. The definition of eligible courses in this regard has also been extended.
We are committed to ongoing improvements in third level student support schemes, including increasing the value of maintenance grants and increasing the income limits as resources permit. Our priority in student support has been to honour the commitment given in the programme for
Government, An Action Programme for the Millennium, to introduce equitable support for students attending PLC courses. We have honoured that commitment by way of introducing a maintenance grants scheme for students attending post leaving certificate courses. The scheme was issued to vocational education committees in August and it is anticipated the first payment to students, which will be retrospective to September, will be made not later than January 1999. The grants payable under this scheme will be at the same level as the third level maintenance grants.
We have identified the creation of additional third level places as our priority at third level and to this end we have significantly increased the number of student places available at third level.
The Deputies will appreciate that all improvements in the third level student support area must have regard to overall resource constraints and competing demands in the third level sector.
Traditionally Fianna Fáil in Government and successive Governments have applied priority to the allocation of resources for education. This has been a major success in terms of national economic growth. We have created extra third level places in co-operation with industry and the third level sector. We have also allocated extra resources for the primary and secondary level and will continue to give adequate prioritisation to further allocations to increase resources for the entire education sector as we approach the budget in December.