Funding Crisis in Higher Education - CAVE seminar at Trinity

Posted on May 24, 2016

ivana at CAVE seminar

Financing Higher Education – a public or private good?

Ivana Bacik

CAVE Seminar, Trinity College Dublin

Mon 23rd May 2016



It has always been my firm and passionate belief that education should be free from cradle to grave – free at point of access, paid for indirectly through taxation. This is a core principle, a key tenet of social democracy and socialism – it’s about redistribution of wealth, and universality of access. It is the same principle that should underlie our health system. The core principle on which public education and health services should be based is that of need, not income. When introducing the NHS in the political and economic upheaval that immediately followed the ending of World War II, in Britain in 1948, Labour Health Minister Anuerin Bevin wrote that “The collective principle asserts that... no society can legitimately call itself civilised if a sick person is denied medical aid because of lack of means.” —(In Place of Fear).

 That same principle that should underlie the funding of education services at primary, secondary and third level. However, in Ireland, due to the historical development of the state, this principle of universality is only accepted in a very limited area of social provision – in primary and secondary schooling.

 Primary and Secondary Education

Universality is not accepted – yet – at pre-school level, although there is growing recognition that inequalities are already entrenched by the time children start primary school if there is not more provision by the State at an earlier stage. At pre-school level, we see the great popularity of the free ‘ECCE’ scheme year with 95% take-up by parents; and increasing demand for a second free pre-school year, with a lively debate on how best to fund that – it would cost an additional 175 million per year, but research shows the highest return on investment in education is between 0-5 years of age.

Of course universality was only accepted at secondary level in Ireland belatedly in 1966 – indeed reportedly then Minister Donogh O’Malley caused consternation in government when he announced his free education scheme in September 1966 without having brought the matter to Cabinet. 

So universality is now accepted at both primary and secondary level - albeit that at secondary level, there is still serious inequality of access – indeed, under the 2011-16 government we saw intense debates taking place about the future of secondary fee-paying schools – although we should bear in mind that out of 735 second-level schools, only 54 are fee-paying, and 20 of the 54 are of a Protestant ethos. There are two broad categories, often brushed over in the debate: ‘South Dublin’ and ‘rural Ireland’. There are strong differences over how to deal with these schools – given that teachers’ salaries in those schools are all paid by the State and amount to approx 100 million euro per annum. In 2011 under the previous government, then Education Minister Ruairi Quinn’s approach was to increase the Parent Teacher Ratio in those schools, and to publish an analysis of the additional income available to those schools. As a result, a number of fee paying schools entered discussion with the Department to enter the free scheme, and this is ongoing.

Third Level Funding 

Turning to third level, there is much to be proud of in our system. Ireland is the highest ranking EU country in terms of higher education attainment, with 48% of all 25-34 year olds having a third level qualification. The EU target is that by 2020, 40% would go on to third level, so we have already exceeded that. However, funding of third level remains a deeply contentious issue- something has to change. At the moment the quality of students’ education is being critically compromised for the sake of increasing the quantity of students attending. We now have a staff-student ratio of 20.5:1 in 2016; compared with the OECD average of 14:1. The 2016 RIA Advice Paper on third-level funding notes that core funding per student fell by 15% in the six years up to 2014. 

The RIA paper also quotes data from the European Universities Association showing that between 2008-2013, Ireland had an 18% increase in student numbers but a 29% decrease in public funding allocation at third level – compared to a 29% increase in student numbers in Germany, but a 33% increase in public funding.

The effect the funding issue has had on Trinity College has become very apparent in recent years; and of course declines in international rankings are also being attributed to funding shortages.

How to address this gap? A brief reminder; back in 1996, Labour in government abolished third level fees. This Free Fees scheme was replaced with a £150 fee to cover student services; however, between 1996 and 2015 this fee, now known as the Student Contribution Charge, rose from 190 euro to €3,000 – an increase of 1,480%.

The RIA Advice Paper points out that the overall cost of attending college has to be factored into the debate. The average cost of attending college away from home has been estimated by the League of Credit Unions to be €11,000 pa. The maximum grant is only €5,915 and the average grant just over €3,000 – so the current fee and support structure is no longer adequate.

In 2011, after categorically ruling out a state-supported student loan facility, the then-Minister for Education, Ruairí Quinn, commissioned the HEA to report on the funding situation, and subsequently Peter Cassells was appointed as the chair of a government higher education working group on funding of third-level; his report is due imminently for publication.

Speaking at the Royal Irish Academy in September 2015, as part of a session entitled “A Dialogue on the Future Funding of Higher Education in Ireland”, Cassells said that the group had already concluded that the “current situation is unsustainable”, and said that the “status quo is not an option”, referring to how universities and institutes of technology are funded, which is primarily through government funding and a €3000 student contribution charge.

Tom Boland, the CEO of the Higher Education Authority (HEA), and a member of the Cassells working group, also spoke during that discussion, and described the current funding situation as “managed decline”. While the sector is “coping” he said, “in effect everything is gradually being paired back to a bare minimum”. Noting the relative quiet of higher education institutions with regards to the funding problem, he said that “Ireland could not risk the [reputational] damage” of institutions “shouting from the rooftops” about the issue and how much it was affecting them.

Boland said that the answer to the problem “will not lie in increased public investment alone”, and said that the question was primarily “where and how much students should contribute to their education.”

It is anticipated that Cassells will consider a number of options involving student contribution; either the return of upfront fees; or some sort of ‘deferred’ scheme, either a graduate tax or income-contingent loan model.

In fact, as the RIA Paper notes, there is a spectrum of funding options available, ranging from Norway, where higher education is entirely publicly funded with no student contribution; to the US at other end of the spectrum, where education is almost entirely privately-funded through student fees, loans and philanthropic contributions.

The RIA Paper also presents a helpful review of the advantages and disadvantages of both of the ‘deferred’ options referred to above, noting that there are also a number of ways in which the income-contingent loan model may be implemented; ranging from the model used in England (high student fee, low state investment, high levels of default at 45%); to the model applied in the Netherlands (low student fee of €2,000; high levels of state investment).  The Dutch approach is much closer to the Norwegian model of funding than the English model; there is also an Australian loan model that falls between England and the Netherlands on this spectrum. But all loan systems have disadvantages; notably the fact that they may restrict access to disadvantaged students, who are traditionally more debt-averse; the fact that they may incentivise graduate emigration so as to avoid having to make repayments; and of course the fact that they will leave graduates saddled with heavy debts into the future.

A graduate tax may have fewer of these disadvantages, and indeed the NUS in Britain have proposed a version of graduate tax to replace the highly criticised loan system in operation in England; but it is not in place in any jurisdiction currently, and again could potentially incentivise graduate emigration.


While the current funding crisis must be addressed, I would oppose any re-introduction of fees or of requirements to make upfront payment for third-level education.  Any future model of funding proposed must acknowledge the need for an increase in public investment for our universities and colleges. Education must be seen as a right and not a privilege – at all levels.

Posted in: Education