I welcome Mr. Shane Kelly, president of the Union of Students in Ireland, and his colleagues.
Discussion with Union of Students in Ireland.
Mr. Shane Kelly
I thank the Chairman. I will ask my colleague, Mr. Peter Mannion of USI's western area office, to give a brief outline statement and I will deal with all the nitty-gritty questions.
Mr. Peter Mannion
I thank the Chairman and the committee for having USI here again. We believe it is necessary for the student voice to be heard within the Oireachtas, especially on issues such as this.
USI as an organisation is fundamentally opposed to the return of tuition fees under any guise. Our organisation is opposed to the commoditisation of education and believes fees would act as a barrier to third level education for many students. Investing in education is good for the learner and for society as a whole. The only barometer by which one should be measured is potential, not one's potential to pay.
Tuition fees were abolished in 1996. Since then, Ireland has witnessed a surge in the number of students entering third level education. In 1980, this access rate stood at 20% of 17-18 year olds while in 2004 it had reached almost 55%. Many of our young people were caught up in the economic boom at that stage as well, so that figure could have been even higher. In the college year 2006-07, there were more than 153,000 individuals in education in the higher education sector. In 2008, the Higher Education Authority produced its national plan for equity of access to higher education covering 2008 to 2013, designed to dramatically increase the numbers in further and higher education. The plan set a target of 72% for national participation by 2020 and at least 54% in each socio-economic group. Restricting access to third level education through the re-introduction of college fees will result in these ambitious targets not being reached.
It is apparent that a proposal on the re-introduction of college fees will be tabled for Cabinet discussion within the next four weeks. We urge the Government parties to examine all funding options for the sector before making any decision on student fees. The cost of college education in Ireland is already very expensive. Earlier, the committee heard the institutes of education representatives say that students already pay fees. A registration fee costs €1,500 and many students pay a levy on top of this, so €1,500 plus is the entry fee to "free" education.
The cost of college in real terms is €38,000 per annum. When one includes the registration fee, that now comes to more than €40,000.
Is that over a four-year period?
Mr. Peter Mannion
Yes, it is over a four-year period. The argument put forward that only those on higher incomes would pay fees has been proven false. Figures from the Minster of Education and Science's economist show that €30 million per annum is raised by taxing the higher income earners. If fees are introduced, we believe they will have to be extended to all learners because otherwise sufficient money cannot be raised to sustain our system. In the event, this would completely undermine the OECD's conclusion that Ireland is providing the most equitable access to higher education.
I invite members of the committee to visit the IDA website, where I got some really good information. The website boasts that the educational system in Ireland meets the needs of a competitive economy. Its figures show Ireland has a decisive lead over countries that restrict the access of people to education through tuition fees, namely, the UK and the US. Also, the organisation promotes Ireland's higher educational achievement. Using this indicator, Ireland is markedly ahead of countries like the UK and Germany when it comes to the percentage of population that has attained at least tertiary education. In fact, the Irish figure is shown to be double that of Germany.
Restricting Ireland's economic competitiveness during a recession would elongate the economic trouble for our country. Due solely to the free fees scheme, the IDA continually promotes the notion that the Irish skilled workforce of science and technology graduates in the 20-29 age group is twice that of the US and three times that of Germany. I am a graduate of the free fee scheme, as is Mr. Kelly, and we are in that age bracket.
The OECD puts the average level of investment per student in tertiary education across the world at $11,512 while Ireland only spends $10,000. That means we are still underfunding the system while promoting Ireland as being one of the leaders. Interestingly, the overall figure is down as a percentage of gross domestic product, GDP, compared to what was being spent in 1995.
USI fears that college fees will stifle Ireland's economic recovery and growth by restricting access and burdening graduates with large debts. We heard today that the Australian system is the one that is being most closely examined. It is called HECS, the higher education contribution scheme, and when that acronym did not sound to nice to students, they decided to call it HELP, the higher education loans programme. Basically it is the same thing. This is where the students are bailed out by the government but they have to pay a higher rate of tax once they graduate. That means students are graduating in Australia with average tax bill of more than $12,000. It takes an average of ten years to repay that once they have started to earn enough money. I cannot understand why the Irish Government is examining the HECS system if the Australian Government is going to have to spend $5 billion overhauling the system and has published a 272-page document with 42 recommendations on how to fix it. It is estimated that one third of the HECS debt owed to the Australian Government, or $2.9 billion, will not be repaid.
The tax is indexed to the consumer price index and is repaid through a system such as PAYE. Once students hit an earnings target of the equivalent of €19,000, they begin to pay tax. Unfortunately, many young Australians have no idea exactly how the repayment of this debt affects them from day to day. Is this loan easily paid off? How long will it take? The average graduate can have up to 28% of his or her income taken away to repay the HECS. Therefore, many students will never earn enough to pay off their loans.
We heard earlier on about the mobile generation. Australians are very mobile, but Ireland belongs to the biggest mobility experiment in the world, which is the EU. Will Irish students wait around in Ireland if a model of the HECS is brought in? If a graduate tax is brought in, how will this immediately fund our system? The students who have to pay for the HECS will have to go through four years of college and then spend time looking for a job. How long after that before they earn enough to pay for the HECS? The argument that a graduate tax system will fund our education system is flawed and broken.
The model used in the UK is also very flawed. The figures are startling. More than 59,000 are in arrears, and another 58,000 are behind with their repayments and are in danger of being considered a credit risk. More worryingly, 75% of students who default on their loans have dropped out of college and have not completed their degree. More than half of students from families who work in manual jobs or who are on benefits chose their university because it was close to home because the costs associated with third level are too high.
A recent survey of the USI showed that one in three students will not be able to pay fees next years. The possibility of summer work has been severely eroded, and will leave many students struggling to make enough for their registration fees. We are still dealing with a grants system that was brought out in the mid-1970s. It still has not been fixed and students are still slipping through the cracks of that system.
If changes are proposed, the USI feels that many students will lose out. All these systems do not increase participation in third level education but rather curtail it. The USI fundamentally believes any return of fees would instigate a chain of events that would prevent potential students from attending college. With the proposed knowledge-based economy, the option of fees and loans should be dismissed. Education must be the foundation upon which our future prosperity is built. This will require a focused and strategic plan, one that seeks long-term sustainable solutions to solve the funding crisis we face. A short-sighted knee-jerk reaction will leave a generation of young people excluded from higher education.
I thank the witnesses for appearing before the committee. This is a longer meeting than normal but we have listened to an interesting debate on education. The witnesses know the position of the Labour Party and my position on this issue. We need to expand on the examples mentioned by the witnesses. We are mobile people and people will walk away from this country if they have a reason to do so. I assume fees will be re-introduced in some shape or form. There seems to be an indication coming from informal Government circles that we are looking at a variation of the Australian model. However, this presentation today is the most detailed exposition of the faults in that model and in the UK model.
Students are the best pension fund plan this nation can have, especially for people of my age and younger. We heard witnesses from the institutes of technology talking earlier about selling education internationally as a service. The case must be made that a universal tax is the way in which to fund third level education, as occurs in primary and secondary education. The downside of loans and other schemes are best exposed by the USI, and I invite the union to do that again. Mr. Mannion's paper is on the record and it is very useful. Most people do not know about the problems with student loans in the UK or about the problems with the Australian model. The more information that is put out, the better.
I am familiar with the arguments put up by the USI. We must be very careful that people do not fall between two stools here. There is a need to readjust what is happening. I am opposed to higher education fees.
The last group before us came up with innovative ideas on how to get funds for the institutes of technology. Those ideas were about bringing in more foreign students who would pay their way. Does the USI have any ideas on gathering funds? I know it is not like selling raffle tickets, but we need more ideas. I am in Opposition and we can say "whatever you are having yourself", but we are in very dire economic times. Some formula could come out of these dire times that tries to address the serious issue of funding for students to offset the introduction of fees. I believe that such an introduction is inevitable and could cause irreparable damage. The Australian scheme could cause a flight of our talent.
I welcome the USI delegation to the committee. I know this committee's work programme is restrictive but when the Minister announces his plans, it would be important to have the USI in before us again to give a proper critique of his proposals. The USI knows my party's position on this issue. I welcome its members' presentation and I concur with them 100% about the flaws in the different models. More importantly, I agree with their claims to a right to education, that it should not be a luxury and that it should be funded through progressive and fair taxation.
I do not subscribe to the idea that third level fees are inevitable. It is inevitable that the Minister will propose third level fees, but I do not believe it is a done deal. Looking at the demonstrations the USI mobilised and at the support being given to the union by different political parties, it is clear this issue is not finished. It is very important to deal with the issue strategically.
It is important the witnesses mentioned the increase in third level participation over the years. It is also important to look at the participation of those from the semi-skilled workforce. Between 1998 and 2004, the percentage of these workers jumped from 32% to 60%. That contradicts the lies coming from the Department that free education has not benefited those from low income family backgrounds. It is important to show this. The Minister and the Department are being opportunistic about this and trying to pitch it as part of the economic recovery plan from the recession we are in at present. The reality is that the proposal being discussed will not bring any income into the country for many years. We need to get the message out that this has been on Department's table for many years. It was not the right time to do it but the Department will try to sneak it in at this point.
What is the USI view on the statement made by the education spokesperson who said it is not unreasonable to ask graduates to pay a contribution deductible at source for a number of years after they enter the labour force and that paying a small proportion of income over a ten-year period after graduation, although difficult to sell, would be a fairer solution to this issue? To me, that statement refers to the graduation tax — the ten-year Australian model for taxation after one graduates. That statement did not come from Fianna Fáil but from the Fine Gael education spokesperson, Deputy Brian Hayes, when addressing its party conference in November.
I raise this matter because while this is a battle that can be won, we need honest leadership as there must be honesty in this regard. Does Fine Gael subscribe to the notion outlined at its party conference by Deputy Brian Hayes, which is on record, namely, the graduation tax? If that is the case, let Fine Gael say it supports a graduation tax and then let the rest of us who want to argue for a fairer and more progressive taxation system that will fund third level education unite and try to resolve this issue.
My apologies, but I will have to cut Senator Doherty short. I call Senator Healy Eames.
I welcome the USI delegates. Fair dues to them for all their work in flying the flag for student education now and into the future. That is quite something to say. Perhaps this question has been asked, but what is the USI take on the position of the institutes of technology and the colleges of education on the reintroduction of fees versus the university position on fees? Why does the USI believe these positions are different? They are all in the business of undergraduate and postgraduate education. Does the USI believe the universities are taking the high moral ground and are they justified in taking the ground they are taking?
Has the USI spoken to the university heads about the proposal for the reintroduction of fees? Has it discussed with them that they may be buying a pig in a poke unless they get a commitment from the Government to ring-fence at least a considerable percentage of the fees which would be put back into third level education?
The OECD review of higher education of 2004 states that, subject to means testing, fees for undergraduate study should be reintroduced and the free fees policy withdrawn. It is a considerable report which acknowledges quality and participation but it also proposes this change.
Finally, the Fine Gael position is that we do not favour the reintroduction of fees but we realise the funding of third level education must be dealt with.
I apologise for missing part of the debate owing to a vote in the Seanad. I welcome the USI representatives. I had the opportunity to discuss this issue with them previously and I know where they are coming from. This is a very difficult issue and I appreciate the students' position.
The Minister is considering a number of options at present. Speakers have referred to the Australian model. Given what the Minister has said in recent weeks, he is certainly considering the issue with regard to those in the lower socioeconomic groups who cannot afford fees and find it difficult to enter college. If a fee structure was introduced, some sort of grants scheme would be introduced for those people.
There is a suggestion the Australian model may be flawed. It was the first country in the world to introduce such a deferred loan structure. If we were to speak to the Minister today, what suggestions would the USI have in terms of the way forward? When the Minister started the debate, he was coming from a certain perspective. For example, the children of parents on €300,000 or €400,000 and the children of parents on €30,000 or €40,000 were given the same benefits under the current scheme. There is a debate whether there should be a differentiation between children whose parents are on different levels of income. The Minister is obviously considering the options at present and a decision will be taken by him.
I agree with Senator Doherty that we should have the USI back to the committee to discuss this issue after a decision has been made. We should examine and brainstorm the decision to see whether this committee can constructively make suggestions following the decision. While it is not the appropriate mechanism, none the less, it is better to give the Minister feedback following the making of a decision. It is important we are engaging with the USI. I suggest we would feed back some of the recommendations made today to the Minister and the Department in the immediate future.
I did a radio interview in Dún Laoghaire recently with Mr. Kelly and I put my position in terms of whether the removal of fees had had any substantive impact on access. I still maintain that the only definitive report we have to date, the Clancy report, provides evidence that it has not, and that far more important is ensuring our children go to primary school, continue through to the junior certificate and on to leaving certificate level. That is the most important issue. That said, the USI has made a very comprehensive presentation on the pitfalls of reintroducing fees, be they direct fees or a graduate tax, which, to echo what Senator Doherty said, is fees by another name.
As Deputy Hayes said earlier, as Chair, I must act as a conduit for Government and Opposition. In that case, I want to take a couple of devil's advocate angles. The Minister for Education and Science is considering the merits of a fees system whereby wealthier families pay up front, which has been touted, and-or a loans system. The USI has said a loans system would leave graduates heavily indebted for years at a time when high levels of debt are stifling economic recovery. If a loans system is to be introduced, should we push for the point at which graduates start to repay the loan to be at a very high threshold level? This assumes the Minister does not listen and I hope he will listen. Likewise, if a straight-up fees system were introduced, would the income threshold introduced be set as high as possible with adequate protections in place so students would not be dependent on their parents? Is the USI of the view that if income thresholds were set, there should be some legislative protection in place so they cannot be reset at a later date so as, once again, to use this as a revenue-gathering exercise?
I have put on the record my opposition to fees. In that context, would the USI agree that before any proposals are put formally, the Department of Education and Science should engage in full consultation with all stakeholders, which has not happened? This committee has done that but a wider debate should be held, especially among groups representing students and their parents.
The witnesses were nodding their heads. I may have a proposal to put to the Minister when I hear the answers to those questions.
I suggest the USI might consider making an offer to the nation that students after graduation would give six months on the equivalent of a social employment scheme working in a range of activities throughout the nation. It would be up to themselves to develop the idea but there has to be an exchange. I suggest the USI would come offering something, whether it is assisting in schools, nursing homes, hospitals, environmental work or otherwise — not national service, but something along those lines.
Mr. Shane Kelly
We are speaking in a vacuum which is obviously not a healthy situation. We do not really know what the Minister is proposing and we are speaking in Chinese whispers with regard to what is going on, which is the least helpful situation to be in. We have consistently argued that the best way to deal with the current funding crisis is to put representatives of USI, the universities, the institutes of technology and the Department around a table so that we can hammer out a solution that will address our concerns regarding access and other issues but will also deliver on the funding requirements that are of concern to the other parties. Ours is a healthy and mature position. If the other stakeholders were as mature as us, the problem would have been resolved years ago.
I apologise for interrupting Mr. Kelly but I would like to put a proposal to the committee. I propose that we agree to the following statement:
That the Department of Education and Science refer the matter of fees to the higher education strategy group to ensure the issue can be evaluated and researched thoroughly, with independent recommendations made following full consultation with all stakeholders.
Is that not happening or supposed to be happening in any case? What Mr. Kelly is proposing——
There has not been full consultation with all stakeholders.
I understand Mr. Kelly is proposing that there be full consultation with all the partners in the room.
Mr. Shane Kelly
I am a member of the higher education strategy group. It was most disappointing to hear the Minister's response some weeks ago when he was asked about the issue of university status for the institutes of technology in Waterford, Cork and Dublin. In view of the existence of the strategy group, he said, it would be inappropriate for him to discuss issues such as university status until such time as a national strategy is devised. Despite this, he is happy to discuss the return of third level fees. The strategy group should be afforded the opportunity to put forward a vision for higher education for the next 20 years and to explain how that will be achieved, which would include the issue of funding and so on. However, this is not possible if we have the Minister setting out his own roadmap and disregarding the objectives of other stakeholders. That is completely unacceptable. There is a complete lack of continuity of thinking within the Department and the Minister's office.
As I said, the higher education strategy group should be the forum within which discussions would take place on issues such as the best funding model for higher education, whether that be the current system, some type of graduate tax or whatever. However, the Minister has decided he wants to do it on his own. This completely undermines the integrity of the strategy group. That committee includes eminently qualified people and the Minister is undermining them.
Senator Healy Eames asked about the ongoing debate in regard to the institutes of technology versus the universities. The institutes of technology have always been starved of funding. There has never been parity of funding between them and the universities. The institutes have developed in a culture where they have had to be far more innovative and scrappy in terms of how they go about securing funding. The universities, on the other hand, have simply had to put out the hand and request additional funding. We have fattened the universities to such an extent that they are no longer nimble and innovative and are unable to seek and attract independent funding in the way the institutes can. In effect, the universities are in a state of paralysis. It has been a failure of Government policy that this was allowed to happen. The institutes of technology have a far more balanced approach to funding models. I am delighted to hear that it is likewise in the case of the colleges of education.
We must view the debate the education sector as part of a broader societal debate and as an aspect of a broad economic recovery plan. What is at issue is how we can get those people who are losing their jobs, whether at Waterford Crystal, Dell, or elsewhere, back into education. We must examine how we can move the economy on to the next level where we will not be so dependent on construction jobs and manufacturing jobs that can be sent overseas. There should be a broader debate on education but I am sorry to say it is not happening. That debate is not being facilitated by Marlborough Street or by anybody in the Minister's office. It is extremely disappointing.
The Senator also asked about the OECD report. The OECD has been unashamedly in favour of third level fees in all jurisdictions since it began issuing reports on education. Therefore, its recommendation is not a surprise. I would not expect it to change its mantra at this stage. It is important we examine these issues in an Irish context. Apart from Britain, which is an outlier, Ireland is the most expensive place in Europe in which to avail of third level education. In Germany, for example, where fees are payable, the cost of participation in higher education is €500 per semester. It is much the same in France and throughout Europe. There has been a deliberate muddying of the waters.
That is not generally understood.
Mr. Shane Kelly
Not at all.
Is Mr. Kelly referring to the student service fee?
Mr. Shane Kelly
I refer to the total cost of education. The average cost of undertaking a four-year degree is almost €40,000. This compares very unfavourably with the situation elsewhere in Europe.
Is Mr. Kelly including living costs and so on in that figure?
Mr. Shane Kelly
Yes. It includes living and transport costs and all the other costs associated with third level study. As I said, there has been a deliberate muddying of the waters by the university presidents, in particular, and by the Minister and his Department in somehow suggesting that we have a free education system. They love to emphasise this notion of "free" third level education. In reality, it is the most expensive system in Europe apart from Britain. For example, the registration fee is now €1,500 and there are rumours that it may be increased by a further €100 in the forthcoming budget. This will cause major difficulties for families.
I am a non-traditional student. Nobody in my immediate or extended family has been to third level. I like to consider myself something of a trendsetter in this regard in my family and in my area. With luck, I hope to be studying for a masters degree in Trinity College next year. That is the value to the individual of higher education. The value to society is that the average graduate will contribute some 70% more in general taxation than a person without a degree. This taxation is both direct and indirect. Higher earners go on more holidays, buy more cars and engage in the other activities that people with more money can enjoy. It comes back to the question of how education is funded. It is in everybody's interest that greater numbers of people should have the chance to earn more and thus contribute more to the State coffers so that there is sufficient funding for schools, roads, hospitals, medical cards for senior citizens and all the services that we as a society claim we want to provide.
Therefore, support for the provision of higher education is in our own economic interests. This is not rocket science. It is a plausible and sound economic principle that we should encourage greater numbers to participate in higher education so that more people will move into well-paid employment where they will pay higher taxes which are distributed by the State through the provision of services. Surely this is economically sound. We already have a type of graduate tax in the form of the higher tax band, for which almost all graduates will end up qualifying. When people ask how we will pay for the education system, I explain that this is how it is done. Graduates obtain well-paid employment and society reaps the benefits.
Mr. Peter Mannion
There was a question about foreign students. Our statistics show that a foreign student pays on average €38,000 per year to come here. If we want to attract more foreign students, we will have to lower the cost, which is currently the highest in Europe, even taking Britain into account.
On the prospect of a graduate tax, if I were a 17 year old starting college, I would not relish the prospect of being burdened with an additional tax for at least ten years after graduation. Students must be consulted. More importantly, their parents, who bankroll the students and make their financial decisions, will have a view on this issue.
Mr. Shane Kelly
Deputy Quinn asked about the mobility of students. A Halifax survey published in October, prior to the discovery of the full extent of our current difficulties, suggested that 50% of final year graduates expect to leave the State this year and next to find employment. In other words, half of our entire new knowledge stock — those who will enjoy a 70% earning premium and pay higher taxes — feel obliged to leave this country to gain the capacity to pay taxes. We would drive even more of them away by demanding that they repay fees for years to come. It beggars belief that anybody would argue for such a strategy in the current economic climate. We should be seeking to retain students in postgraduate studies, which is far preferable to having them on the dole queues.
Those who may be studying construction studies or architecture at present and who may think there are not many jobs available should be retained in education. Perhaps they can diversify by undertaking a master's degree in business or another discipline that will give them additional skills and help them to move in a new direction. If such people are told they will be obliged to pay back €70,000 on reaching the end of their four-year degree, I do not believe they will be overly inclined to take on another €10,000 to €15,000 in debt simply to undertake a one-year postgraduate study.
Huge implications are not being thought out at any level and I reiterate that the only way to think through such matters is to refer them back to the strategy group, which includes bright and articulate people who have been through the system, who work in it and who understand what is going on. While that is the only way to deal with this issue, it does not appear to be the mood of the Minister at present.
I thank Mr. Kelly and Mr. Mannion for a highly comprehensive and thoughtful contribution. I wish to make a recommendation because I believe this will be the joint committee's only opportunity before the Minister makes an announcement. Because so few members are present, rather than passing a motion, I suggest the joint committee should write to the Minister for Education and Science to ask him to refer this matter to the higher education strategy group before making any decision on the level of fees to ensure the issue can be evaluated and researched thoroughly with independent recommendations made in full consultation with all the stakeholders involved, especially students and parents.
From my point of view, I would qualify the request in order that the issue of the funding of the third level sector would be referred to the strategy group rather than the issue of fees.
We will write to the Minister on the issue of funding.
Were the joint committee's message to include the phrase, "the issue of fees", it would be conceding in principle that fees should be paid.
Okay. The message should refer to the issue of funding.
Yes. Members should leave it open to funding.
Is that agreed? Agreed. This message will be sent to the Minister for his consideration.
The joint committee adjourned at 1.05 p.m. until 10 a.m. on Thursday, 26 March 2009.