One of the slogans of October 19th’s Union of Students in Ireland (USI) protest against the introduction of an income-contingent loan scheme was “Buy College? Bye College!”. It is estimated that approximately 10,000 students, parents and interest groups turned out for the march. Therefore, it is fair to say that the opposition has a vast core support base. Most are in favour of increased government funding to keep the student contribution down and the maintenance of the means-assessed Student Universal Support Ireland (Susi) grant system.
However, there is a large contingent of students who are unheard of, forgotten about and ultimately ignored. These are the students who fall through Susi’s net. Refuting the slogans of the protest march, they are already “buying” their university degrees. These students, who find themselves just outside the limits of the Susi income cut-off point and therefore ineligible for grant assistance, are ultimately left to fend for themselves financially throughout college. Indeed, Susi found these students’ parents’ earnings to be just too much to qualify for the student grant, but these same parents’ earnings aren’t quite enough to cover the ever increasing costs of sending their child to university. Coming in at €500 over the cut-off point is not enough to cover your accommodation costs, living expenses and fees. Finding yourself struggling from paycheck to paycheck and think a micro loan could help you? Research into small loan lenders such as sms lån.
The fact that any grant system that is based on means-assessment must have cut-off points for it to function is acknowledged. However, when the system is not working, change is necessary. The current situation sees a growing number of students applying for loans from various banks and institutions, with some even juggling several loans. And as most of the students are still in young adulthood, they often have a poor or nonexistent credit rating. This means they can only apply for loans with high interest and APR rates. Some have found a credit card for people with no credit which is proving helpful. While the student loans on offer today are adequate, they are still bank loans. In other words, students are at risk of the pitfalls of rising interest rates, immediate repayments and debt, just like anyone else who takes out a loan. The introduction of an income-contingent loan scheme for students would better promote the best interests of the student insofar as repayment is delayed until the student is earning above a certain threshold, therefore ultimately easing the pressure.
The proposed system is not one to be feared, contrary to what those in opposition to the loan scheme would have you think
It cannot be denied that Ireland is in the depths of a third-level funding crisis, evident from the drop in rankings of our universities in recent years. It has been the job of the expert group, the Working Group on Higher Education Funding, to come up with solutions to the funding problem. It was the emerging Cassells report that suggested the introduction of income-contingent loan schemes based on the success of such schemes in other countries such as Australia and the Netherlands. One section of the Cassells report puts forward a model of what an income-contingent loan scheme might look like, and points to the systems in place elsewhere in the world. A loan could cover fees, but it might also cover living expenses. The loan would be in the name of the student, and would not be due for repayment until the individual is earning above a certain threshold. The model given by Cassells places this at €26,000, though such a figure would ultimately be the government’s to decide. At this rate, repayment could be manageable at €100 a month over 15 years. It is also important to note that real interest rates are not charged on these loans – instead the debt is indexed each year to reflect changes to the consumer price index in order to maintain its real value.
The proposed system is not one to be feared, contrary to what those in opposition to the loan scheme would have you think. Trinity College Dublin Students’ Union (TCDSU) adopted the mandate to oppose an increase in fees and their campaign during the recent protest march focused on debt. There is a lot of negativity associated with the debt arising from a student loan. But instead, the proposed scheme should be thought of as an alternative to fund third-level education. It alleviates the immediate pressure to fund their study and allows the student to repay at a point in the future when they are better equipped to do so.
Last year, former TCDSU President Lynn Ruane stated that the debt associated with loans would serve as a deterrent to students entering college on grant assistance. However, in other countries, particularly in the UK, loan schemes have had little to no impact on access to universities and some data points to increases in the number of low-income students entering higher education. Again, when discussing this issue it is important not to forget those students who are, at present, forgotten about. An income-contingent loan scheme would make funding their third-level education manageable.
we should not oppose the introduction of income-contingent loan schemes. It may be the most inclusive way forward
Another argument against the introduction of income-contingent loans is that their presence alone will result in an increase in student contribution. The proposed scheme laid out in the Cassells report accepts that while fees might rise under an income-contingent loan scheme, loans would be made accessible to all students. This system is more inclusive to those students who stand on the outer boundaries of Susi grant assistance. Looking forward, it would appear that, unfortunately, an increase in student fees is inevitable regardless of the introduction of income-contingent loans. At least with the option of such student-friendly loans, we would be better equipped to deal with these increases. For those students that avail of the SUSI service, a new system, if properly defined, could still provide grant assistance.
Most importantly, the income-contingent loan will not be forced upon any student. It is the student’s choice whether they want to make use of this service or not. If you don’t like the idea of having debt at the end of your undergraduate degree, if you’d prefer to pay upfront or if you’d prefer to fund your third-level education alternatively that is totally up to the individual. However, the present situation has created an underfunded and inadequate third-level education sector and also fails to meet the needs of those students who fall between the gaps of Susi and being wholly financially competent to fund their undergraduate degrees. We cannot ignore them any longer. Indeed, there are still a lot of questions to be discussed concerning the proposed loan scheme and the government will have an extensive role to play with regards to funding. Nevertheless, we should not oppose the introduction of income-contingent loan schemes. It may be the most inclusive way forward.
