Universities face cash crisis over cuts and youth boom

Ireland’s next Minister for Education and Skills will face a major political challenge in ensuring the sustainability of the country’s higher education system that is both under-funded and under pressure to take in more and more students.

Unlike the situation in most other European Union member states, Ireland’s youth population is booming with record enrolments in primary and secondary schools at present.

The country will have to increase the number of places in higher education substantially – by at least 25% – just to retain the present participation rates.

The problem is how to fund that expansion, especially after almost a decade of cuts in state aid.

The previous Fine Gael-Labour Party coalition government effectively kicked that political can down the road by setting up an expert group to examine the sustainability of the system. Its report has not been officially released but has been widely leaked and it makes for grim reading.

It says that the status quo is not sustainable and that the system needs a 50% increase in annual funding – around €1 billion (US$1.1 billion) – to restore the cuts and cater for the increased number of school leavers.

That’s apart from a multi-billion investment needed in capital projects.

Higher education barely got a mention in the run up to the recent general election in Ireland but the next government will be under pressure to take decisions on the future funding of the system, not least because of the growing demographic demand for places.

At present about 56% of young people who sit the Leaving Certificate exam transfer to higher education in the same year (more do so later on) but to keep that rate will require an increase in places, of the order of 25% to 29%.

Tuition fees in Irish universities and other higher education institutions were abolished two decades ago.

A 'services' charge was introduced and this has been increasing steadily to reach €3,000 a year. The charge is paid by only half the students as the state picks up the tab for the other half on a means tested basis.

The leaked report favoured an income contingent loans scheme under which the charge would be repaid once graduates reached a certain income level.

A hot potato

It's a hot potato which few politicians want to handle, especially in the aftermath of an inconclusive general election on 26 February which saw the coalition partners losing dozens of seats, despite taking the country out of an EU-International Monetary Fund bail-out, slashing public spending and unemployment levels.

Talks on a new government are still trundling along and in the meantime Fine Gael, still the biggest party, is proposing kicking the financial can down the road once again.

In a discussion document on a possible coalition arrangement, Fine Gael suggested referring the still unpublished report on the sustainability of the system to a cross party Oireachtas (parliamentary) committee for further consideration.

Higher education institutions fear that, once again, the politicians are ducking the issue of funding the system adequately.