'USC-style levy' to fund third-level education

Date Uploaded: 04/04/2017

A Universal Social Charge-style (USC) levy would be a better way to meet the funding needs of higher education than the proposed student loan system, according to new analysis.

The loan scheme, suggested in the Cassells Report on future funding for third-level, would not work in Ireland and would cost the Exchequer €10bn over 12 years before it stabilised, said economist Dr Charles Larkin.

Dr Larkin, of Trinity College Dublin, said it would take 15 years for such a scheme to become self-financing.

He told a conference the Irish higher education system was neither small enough nor large enough to make an income contingent loan system work.

While there is no plan at the moment to introduce such a scheme, last year's Cassells Report put it forward as an option to address the challenge of funding third-level to deliver a high quality education to growing numbers of students.

The loan scheme would mean college was free at point of entry, but graduates would pay back once their salaries hit a certain threshold.

Education Minister Richard Bruton passed the Cassells Report on to the Oireachtas Education Committee for further exploration and to test the political waters. The committee's report is awaited.

Dr Larkin, along with Dr Shaen Corbet, a finance lecturer in Dublin City University (DCU), carried out a detailed cost-benefit analysis of the proposed scheme.

Speaking at a conference yesterday, Dr Larkin said the analysis showed that it would cost the State €10bn over 12 years before it became self-financing.

This would be in addition to the cost of the State financing all grant recipients, he said.

He accepted the Cassells Report conclusion that the funding situation for higher education was unsustainable, and suggested that a tax similar to a second USC was what would be required do generate the required revenue.

He said an education levy, modelled on the USC, could allow for free education for undergraduate students.

Dr Larkin was speaking at the launch of The Technological Higher Education Association (THEA), the newly titled, representative body for the 14 institutes of technology.

THEA's chief executive, Dr Joseph Ryan, told the conference the third-level technological sector was in the midst of a funding crisis that must be addressed, but warned solutions should not limit student access.

Source: www.independent.ie

Journalist: Katherine Donnelly

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