Dr Martin Mansergh
“Much of politics is about trying to shift financial burdens on to other shoulders”, writes Martin Mansergh
A core mission of family life is to bring up children to the stage where they can go out into the world and make an independent living, and form a family of their own. The State, i.e. the community as a whole, has an obligation to support families in reaching this goal, much of it through education.
Education continues for well over half of the 18+ cohort of young people to third-level courses. The great expansion in third-level education, once open to only a small minority, has been driven by the modernisation of the Irish economy, but it has also led to accumulated financial strains. The problem is not just one of identifying additional sources of funding, but of making them politically acceptable. For some time past, there has been an official preference for moving to a student loan system. Since this is not palatable to a large voting student population, it has yet to move much beyond kite-flying.
Until now, most graduates enter the world of job-seeking and work unencumbered by debt. It would represent a big social change if, in future, most graduates entered the work force carrying a substantial debt that would take some years to work off. It is small comfort that if they fail to earn enough they would not have to repay the loan.
Traditions
When importing models from abroad which appear to work elsewhere, we must also take into account the situation and traditions in our own country, and ask ourselves how they would work here.
In wealthy countries of large population and plenty of opportunities, most graduates will want to remain. In small developed countries that each use their own distinct language, difficult for others to acquire, the advantages of remaining may still be quite strong. Ireland on the other hand has a strong tradition of emigration, which may fluctuate with the strength or weakness of the economy, but which continues alongside inward migration.
Young Irish people have a large choice of English-speaking as well as EU countries to work in. According to the recent report of the Peter Cassells-chaired expert group, in Australia ‘approximately 15-20% of loans are not repaid, as a result of graduates failing to earn enough and because of emigration’.
While various means of uncertain effectiveness are outlined to counteract this and to collect debts from those who have moved abroad, it would be terrible if the adoption of a student loan system were to create an extra incentive for our graduates to emigrate for good, a possibility alluded to in passing in the report.
There is also the effect on those who stay and repay their loan that the debt overhang will lead them to delay further entering into family commitments, accentuating the trend towards later marriage and child-bearing.
Much of politics is about trying to shift financial burdens on to other shoulders. A student loan system is about trying to push more of the cost of third-level education on to the shoulders of its immediate beneficiaries, instead of accepting its benefit to Irish people and society as a whole.
One of the most disingenuous mantras put about with little critical examination is the notion that it is unfair to ask taxpayers to fund the increasing financial needs of third-level education, since many of them will never have benefited from it.
First of all, although many citizens are below the income tax threshold, everyone, bar small children, is a taxpayer, even if only paying indirect taxes when they shop. The vast majority of taxes go into central or local government coffers, and help to fund all expenditures, irrespective of whom or how many each individual spending programme directly benefits. But, and this is the point, in a progressive tax system – and by international standards our income tax system in particular is highly progressive – the bulk of taxation is paid by the better off. The cost of improved public services falls primarily on them. It is not low income families that would have to shoulder the main burden of a better State-funded system of third-level education. The notion that this would somehow be socially unjust is the sort of sophisticated argument that those whose overriding priority is lowering the tax burden on high earners love.
As in the main higher earners, graduates make lifelong repayments for their education through the tax system that in turn will help fund students that come after them, which is much better than taking on at a young age a concentrated debt and mortgaging their first earnings.
Pressure
Experience should teach us to be very wary about commitments, however sincere, of strict additionality. In a few years, one could well find third-level education no better funded than before, but with higher student fees underpinned by loans substituting for Exchequer funding diverted to other purposes.
The next pressure would, as in Britain, be to abolish maintenance grants for those who need them, while fees jump in most cases to the maximum permitted level, double or treble the registration fee of €3,000, reducing financial discipline in colleges in the short term. After a four-year course, a typical repayable student loan could amount to €30,000 or more. Is this fair?
Irish society is unlikely to move any time soon to Nordic-style comprehensive free public services with associated high taxation. Unless we enter an extraordinary period of sustained prosperity, scope to reduce or eliminate the registration tax seems unlikely.
Skimping on public funding of higher education is a false economy. Colleges need to be able to recruit good staff, with a proper balance between teaching and research, and offering reasonable security as opposed to demoralising short-term and often part-time rollover contracts. We cannot go on relying on American philanthropy to build or renew capital plant. Improved educational access with less social welfare penalisation and more support for adult education also needs more attention. In short, giving third level the better support it deserves is not something we need be apologetic or hesitant about.
