College Fees

“Incoming students in the 2009/2010 academic year should now be on notice that in the event of a Government decision to introduce a new form of student contribution from a future point in time, any such arrangements are liable to apply, from that time, to students who enter higher education this year.” (Tom Boland quoted in today’s Irish Times)

The reintroduction of college fees has been a feature of the policy landscape for the last year in particular. As yet it is not clear from reading the debate what is likely to be proposed. A number of issues arise from an economics and an education point of view around firstly whether fees should be reintroduced and secondly what type of mechanism should be used if they are to be reintroduced. Proponents of the reintroduction of fees argue that it will increase available finance and perhaps autonomy to the third level system and also that it will remove a subsidy that accrues to a greater extent to the better off (particularly if scholarships based on means-tests are brought forward in parallel). Opponents point to potential discouragement of people in middle-income categories, potential financial hardship for students, and also poor timing in the sense that graduates in the next number of years will face a very depressed labour market.

There are a number of other questions about the details of any reintroduction that haven’t been debated in the media. I’m sure people will have many more issues. But to start with, we do not have a sense yet whether this is being proposed only for the universities or for the IOT’s also. The extent to which a family income threshold will be used has been floated in many articles but what is the appropriate level and does it make sense to tell an 18 year old that their entitlement to state support depends on their household income? The extent to which fees will be used as a replacement for existing college funding sources as opposed to an extension may seem somewhat obvious now but still has not been discussed much in public.

This IFS document analysing the British case is useful background reading for what I’m sure will be a purely evidence-based debate. According to the Times, a 100 page document will be circulated by the Minister for Education to his cabinet colleagues next month. He should make it publicly available also – it really wouldn’t hurt to have a debate about such a deeply important issue.

33 replies on “College Fees”

Fees will remove a major competitive advantage for the Irish universities when it comes to recruiting the best Irish students coming out of secondary school. If you’re going to have to pay for your education, why not pay Oxford, Cambridge or Imperial (or even Harvard or Yale for that matter). The American schools would probably give you a good deal because you bring them geographic diversity. The Irish universities should be getting ready to battle for the best talent, because they are about to find themselves in a much bigger marketplace.

Is it as simple as saying “less well off, high achieving students should not be hindered by finance in any way?” because they shouldn’t.

BUT…What if “Johny Tightlips” down the road wants to study basket weaving for three years at 4,000 a pop…No taxpayer wants to contribute towards this, and understandably so

Funding, grants and scholarships need to be aimed at what we need, science, innovation etc, and to the right students not just those in financial constraint both those who are academically able, if not I can see so much being wasted again. This is harsh, but needs saying.
For those in a position to pay a government loan payed back on potential earnings seems the most appropriate way forward.

I see no problem in contributing tax money to pay for a good student that can put an end result on my shelf, I do however have a problem with able students (financially) availing of free education with a lower output.

Implementing these fees over time could be one of the hardest things this government will have to do to crunch funds.

About time this debate got going!

John D – check out the state of US college funding these days. Endowments have been hammered, and scholarships are in huge demand. I doubt it would go down well for the US to bend over backwards to give Irish kids a cheap university education. Some kids in the US leave college with six figure college debt.

For me the big question is when we’re going to figure out that streaming kids into disciplines like med and vet at 17-18 is costing us in the long run.

In a university education, there are obvious private benefits, but also spillover benefits to society. So it is going to be possible to argue both sides of the case. Having a low or zero cost is going to result in ‘over-consumption’ of education. However, if there are no subsidies, that will result in a less than optimal number of graduates

As an undergrad during the last college year I had the misfortune to suffer a Students Union campaign that was a race to the bottom in terms of promising to stop fees being introduced. There was little in the way of valid argument from the students, and plenty of ‘me me me’. On the other hand, there is some student discussion today on the UCD boards.ie forum, and there were several posts in a row containing rational discussion, and even some pro-fees comments. Maybe there is hope yet for the current cohort.

From a game theory point of view, I wonder what the optimal strategy for the Student Union movement is. Say their goal is to maximise the government subsidy for college, and they can choose to either stonewall and refuse to compromise (their current strategy), or try to engage with government and work out some middle ground.

I feel like I’m not being well served at the moment by my SU representatives, but maybe their actions can be justified by game theory.

@ John Cowen
This is no game or game theory. We are dealing with a government who squandered a record breaking decade of Irish exchequer receipts but who are now broke! If students fall for this they are mad.

The idea is to make students pay for their own education probably through loans. And what about the taxes their parents pay? What are they to be used for? NAMA? So when you qualify, into a still depressed economy, in four years time you will be extremely lucky to find a job in your own country! In all probability the majority of graduates will be facing unemployment.

So what are student options then? They will be staring high levels of unemployed with a huge debt around their necks. That is one of the issues, another is, that lots of parents will just tell their children they simply cannot afford to send them to college any longer! And how do students pay off this debt to be imposed on them by those who wrecked the economy and who went through university free!

Minister O’Keeffe, is currently receiving a pension of Euro 12,000 a year after tax on top of his salary of two hundred thousand Euro 200,000. The 12,000 is a payment he receives because of a job he once held as a college lecturer 22 years ago, back in 1987. A pension that tax payers topped up while he was a T.D. O’Keeffe sees nothing wrong with receiving a pension of Euro 230.45 per week more than the average dole while at the same time earning another Euro 200,000 or 4,000 a week as minister. He is presiding over 32 different cut backs and the imposition of student fees in a government that insists it must “lead by example.” As George Orwell said, in “Animal Farm” ” Two legs good, four legs better!” or “Some animals are more equal than other!”

Registration fees have also been hiked, and will be hiked again and again relentlessly. Last year they were Euro 900 in Limerick University. Yesterday those fees were hiked up 66% in the space of a few months to Euro 1,500 and is anyone shouting STOP!

When I went to college you paid one registration fee, on year one and that was it! Now, thanks to FF and O’Keeffe you pay registration fees/induction fees every single year! This is of course separate from paying the cost of the course itself! The whole thing is a monumental rip off! Mr. Chuck Feeny philanthropist practically built Limerick University but now they want to fleece students with annual registration/induction fees. I wonder what he will have to say about this? The whole thing is turning out to be a logistical and financial quagmire for students and so, so, corrupt!

Have the universities published audited accounts to show where their fee income has gone since fees were done away with in ’96? I imagine the govt have these as they are paying so much they need to stop.

The registration fee has increased for the universities way above the rate of inflation. Surely advances in IT and efficiencies should have reduced these fees – or are there vested interests involved who don’t want this or other ulterior motives.

Lastly, why are some adult citizens judged on the basis of other adults while older adult citizens are not?

@Mark Dowling

From the Harvard financial aid website:

‘All of our financial aid is awarded on the basis of demonstrated financial need … and we meet the full need of every student, including international students, for all four years.’

These places see themselves as global institutions and are not ruled by the kind of narrow parochialism you imply. Recessions are temporary, Ivy league endowments are ludicrous and most of these schools would staff themselves entirely with adjuncts before they’d let a prospective CEO get away.

Think of stories like the battle between Charles Haughey and Garrett Fitzgerald for the same woman’s hand during their tenure at UCD. Imagine how different Irish history would have been if they had both ended up in Cambridge or Princeton and never returned. Actually, that might have been a good thing…

Point is, the talent will get plucked and once we lose these people we will get very few of them back. Irish universities have gotten more customer focused recently but they will need to get even better to plug a premature brain drain.

Universites were not founded by governments.
Governments like to reward followers with university places …. as students, lecturers etc. QANGOs. The point of universities is not lost but it is diluted by this patronage.
How about an on line university? No grants, fees or government interference. Accept contributions according to published guidelines. Independence unlike wholesale sell-out to get funding.
I’m just an old romantic!

To counter deflation which is the loss of capital, individuals realize that they are richer in time. Less to do. Why not invest in a learning period? The largest part of such an investment is time. Logically, there should be growing demand from FIRE types as they realize they will not be in their career again.
What will become of them? Actually, the IFSC is still there. But it will still impact Irelands FIRE redundant.

As scarcity subsides, due to increased productivity elsewhere, how do “we” find employment for those who are not ruthlessly exploited thus?
In Australia we employ “ab-origine” and “european” as nature guardians and tour guides. As leisure time increases, in a depression it increases unevenly until policies catch up, there will be a need for “new” occupations. And teachers thereof.

The lack of any Green Paper or definitive information on how the Government in thinking is inexcusable. We are in a huge fiscal crisis, and if there were any real sense of urgency the fees issue should have been settled in time for the academic year 2009-10.

To answer some of the points already made. (a) the registration fee seems to be quite arbitrary and I am not sure if all of it goes to the institutions or is for the stated purpose of covering registration costs or student amenities; (b) universities do not appear to publish meaningful financial accounts – I presume the HEA has information, but they seem to regard it as some sort of state secret (any director of a plc which was so secretive would probably end up in court). One course of action which students’ unions might take would be to seek a judicial review of the registration charges: are they arbitrary, unrelated to their stated purpose, etc?

Major issues which need to be teased out include: (i) flat or cost-related fees? (ii) fees to cover 100% of teaching costs, or some lesser amount – remembering that prior to abolition they only covered about 30%; (iii) redesign of student maintenance schemes (loans, grants, scholarships, etc) to minimise the social impact of tuition fees; (iv) should expected graduate earning have a specific influence? (some degrees a seem to be a licence to print money); (v) scope – include all IOT courses?

In the 1990s the RTCs (now IOTs) tended not to charge fees, because most of their programmes were certificate or diploma courses and under the EU rules governing financial support fees could not be charged. To-day the IOTs offer much more in the way of degree programmes (partly because diplomas have been re-classified as degrees – grade inflation?), so they should be included. I would argue that all fulltime higher education programmes should be included to minimise distortions.

One reason that there will be hell to pay on this issue is that the reintroduction fo fees will coincide with huge financial problems for families and prospective graduates, a mirror image of the situation in the late ‘90s when fees were abolished at a time when ability to pay them was never higher. Pro-cyclical policies once again!

As flawed as the Irish system is, the elite US universities are bastions of privilege.

The two leading candidates in the 2004 US presidential election, George W. Bush and John Kerry, were graduates of Yale University but neither of them were admitted on merit.

Academics not only escape tuition fees if they can get their children into the universities where they teach. They get huge preferences as well. Boston University accepted 91% of “faculty brats” in 2003, at a cost of about $9m. Notre Dame accepts about 70% of the children of university employees, compared with 19% of “unhooked” applicants, despite markedly lower average SAT scores.

http://www.finfacts.ie/finfactsblog/2006/09/top-us-universities-bastions-of.html

I think if the issue of competition with non-Irish universities is to be discussed meaningfully, then similar ranked universities in the UK are clearly (at least to me) the obvious source of competition over the next number of years, particularly in the context of fees. More competition with UK universities in terms of giving a good undergraduate degree would be a good thing of itself for both the UK and Ireland.

By Post Author

@ Robert B

It is plain that undertaking third level education advances ones ability to earn.
That ones family recognises this and funds it does not establish an imperative that the state should.

It is a little dissapointing that the SU is continuing its knee jerk reaction.
Would it make sense to be muscling up to advocate some kind of social partnership with the IUA/IOTI/HEA to negogiate prices similar to labour union negogiating wage rates?
Or does the SU believe it can raise such a mandate?

Also, there is the danger of oligarchist behaviour, but wouldnt the competition end up being between the Uni’s and the IOT’s.

It might make sense that research funding be based on a post grad’s application for it and they can then take it to the place of their choice!!!

Al

@ Al

If the profligate waste was cut out every person in this state, that wanted to, would be able to attend third level colleges. Over the last number of years, there has been squander mania in the country, by those in whom we have vested the power to govern us. Let’s get rid of the 900 quango’s and keep the colleges open for business to our young people.

It is because of gross failures, which include massive salary inflation across universities and IOT’s that students across he board are being asked to carry the can.

This is the lazy way out, the easy way out and the wrong way out. I for one, want my taxes to enable our young people to attend college without the worry of debt hanging over them for a decade or more when they finish college. Society gains too and I presume the higher salaries earned would mean that they pay higher taxes. It is through future earnings and future tax revenues that society recoups its investment.

What is now happening now is that middle income and even low income earners are being taxed to the hilt, their children are going to be made to take out loans to go to college. Then, if they are lucky enough, to get a job when they qualify, they too will fall under a penal tax regime as well as having to contend with significant levels of debt i.e. college loans. The whole thing stinks! And when exactly will these debt burdened individuals be able to afford a house and a family?

Various cheap media shots and propaganda efforts are being made to ham string the student unions by labeling them, and this is rich, irresponsible, selfish, immature etc. This is pure unadulterated rubbish and the students deserve our support. As do the students at primary and second level.

This is just a low blow coming from those of us that know everything about being irresponsible, selfish and profligate and whose generation had a monopoly on this sort of thing. In short, this is nonsense coming from those that brought us to the edge of an abyss.

The SU leadership should now lead by example and be as radical as they need to be in order to bring this government to its senses! I could make some suggestions but that is there own business and I am sure they will know what to do if they want to survive. One hint though do not email your T.D.

@Michael Hennigan

Funny you should mention that – I recall that a similar “free fees” scheme for children of academics operated when I was a UL student in the early 90s. One hopes that this will not be entertained if fees return. Time for the Dept of Ed to look for copies for standard contracts in our universities…

@mark dowling

Free tuition was a perk available to all Irish University staff prior to the “free fees” initiative. Note, not just academics: all staff, and there were many children of porters and technicians who benefited. Also, unlike what Michael Hennigan says about the US, there were no “preferences”, at least in selection criteria: you had to get the points first, like anyone else.

I say this just to put the record straight, and I would not argue that the perk should be restored if and when fees come back

@Robert Browne

“What is now happening now is that middle income and even low income earners are being taxed to the hilt, their children are going to be made to take out loans to go to college.”

The world of the free lunch is over for the foreseeable future.

“taxed to the hilt” compared with where?

Employees in Zurich can buy the most goods after paying taxes and social security contributions, followed by Sydney, Luxembourg, Dublin and Miami. And, once again, Jakarta, Nairobi, Manila and Mumbai rank the lowest in the triennial survey of living costs in 73 cities worldwide, published this week.

http://www.finfacts.ie/irishfinancenews/article_1017437.shtml

Costs, including pay should fall in a lot of sectors and I make that point as a person with no guaranteed income or pension.

Apparently the low fees (what is the registration charge?) have not increased access from low-income sectors.

“This is just a low blow coming from those of us that know everything about being irresponsible, selfish and profligate and whose generation had a monopoly on this sort of thing.”

True but it’s not that students didn’t partake in the era of excess.

The students today are likely as selfish as some of the parents (everybody wasn’t inside the tent).

Ditto elsewhere in the developed world! Where are today’s Dany le Rouge?

Apart from fighting for public funds, what would prompt students today to take to the streets?

Maybe another American foreign policy misadventure but apart from that, it’s hard to think of anything else.

It does seem that the fees are being reintroduced in a sort of mindless way in response to the crisis. At the least the free fees policy had a sort of long term vision about it what ever other criticisms there might be of it. It was intering to see that the era of free fees seem to at least coincide with Ireland going from a Greek level 3rd level qualifications to Swedish levels (http://tinyurl.com/qdxjt6 page 50). Not sure what was counted as third level qualification and if the figures for Ireland are really as good as they look.
While I’ve heard the UK had an increase at the same time in third level participation I don’t think it was as extensive. What will the various schemes for reintroduction of fees be likely to do the overall participation rates in Ireland and how much does this matter in relation to issues such as our innovation island plans.

Much of the above comments are akin to throwing snowballs in a blizzard. You cannot see your target. Some valid points have indeed been raised but have been submerged.

Since this is a ‘economics’ site – or so it says on the label, perhaps we should stick with this – for the moment anyway. Third-level education is essential for a developed economy such as ours. But how much of what is required? Very contentious issue. If our Permagrowth economies are transitioning to Perma-declining economies, the issue is of even greater concern.

If you go down the economic, accounting route in considering TL education you will end up in a Tar-trap. You have to consider the nature of the advanced levels of technical expertise you need. That is, who will keep the train on the rails. Good luck.

Make all undergrads pay one years fee in advance + an admin fee. If you pass your exams the fee carries forward – else you lose it! Big incentive to attend your lectures + tutorials, submit your coursework, read your texts, apply yourself and pass your exams. Sure isn’t that what’s its all about!

Brian P

@john sheehan – I mentioned academics as I had no direct knowledge of the situation for other staff – thanks for expanding on that. I was paying fees at the time because my PAYE earning parent was above the then pittance of an income threshold for even half-fees, never mind a grant. I did not say anything about entry standards for these favoured sons and daughters, although I suppose grinds are easier to pay for when you know your kid has a headstart on college expenses.

Former president, Mary Robinson expressed her hope in todays IT that;

“among our young people, who have demonstrated talent in so many fields…. visionaries will come forward who will rise to the challenge of leading Ireland to a new era of prosperity….” A bit Devonian rant, but useful, nonetheless..

Let’s all hope, these young visionaries, can afford the annual registration fees dropping in their doors (perpetual registration fees) as well as the loans for next year, so enthusiastically being conjured up for them.

Where is this 3% deflation Colm McCarthy alluded to as a justification for cutting social welfare. Student registration fees actually went up by 66% in Limerick University? Ironically, a university built substantially on philanthropic donations Lovely buildings, just you come and try and use them.

Unfortunately, unless daddy is very rich, the only specter many of them will envision is one of a figure looming in the darkness with his hand constantly out stretched bearing a piece of paper with the words “fees” prominently displayed. They will find themselves wondering out loud, about whether they will have the money to stay in college for another semester or two.

Already we have seen a significant number of students who have had to drop out in 2008 because they or their parents could not afford fees, books, food. travel, accommodation etc. this is something you will not hear anything about from the HEA or O’Keeffe.

Don’t be surprised then if Mary’s “visionaries”, “visions” do not include paying out extravagant pensions, in the future, to the very public servants and politicians who ran up national debts of 120bn (67 + NAMA) and on who’s watch students were sank into debt themselves, to the tune of tens of thousands of Euro.

There is always payback or unintended consequences. I guess, If there is no free lunch for students anymore then maybe students will decide there is no free lunch for us either.

In principle, I’m in favour of the return of fees – unlike second level education, not everyone can benefit from third level because there’s an ability threshold; third level education is expensive to provide and enhances the recipient’s earnings so it seems equitable that some of the earnings enhancement should be used to pay back some (but not all) of the costs of the education.

The loan-payback system seems attractive. But I worry about the effect on female labour supply, in particular. I can’t see such a scheme distorting male labour market behaviour, but given high female labour supply elasticities, I fear that the effect of the increased marginal tax rate could be a strong negative effect on female labour supply. But I haven’t seen any evidence on this in the countries where these schemes have been introduced…. if anyone knows of any, it would be useful.

A recent paper by Neill based on Canadian data is a relatively clean estimate of the effects of fees on participation. We could argue whether the effect would be as big in the Irish case but I think it is certainly worth thinking more about the response among families where the potential student is the first in their family to go to college.

http://www.wlu.ca/documents/17295/Enrol_Fee.pdf

Tuition Fees and the Demand for University Places

Christine Neill, Department of Economics, Wilfrid Laurier University1

Abstract

US research consistently finds that higher tuition fees reduce college enrollments. Canadian studies have not reached the same conclusion. Because higher demand for university places may drive up fees, I estimate demand using an instrumental variables strategy relying on political party in power. While OLS estimates show little effect of fees on enrollments, IV estimates suggest sizeable effects. A C$1000 increase in university tuition fees is estimated to reduce the enrollment rate by around 2 percentage
points. Youth whose parents have some post-secondary education but not a university degree appear to be most affected by fee increases.

Actually “relatively clean” might be overstating it. These are extremely complex effects to estimate. It is a plausible strategy at least.

@ Aedin Doris
“Do fees affect the Nature of Inequality in Ireland?” Suggested paper!

It amazes me when a discussion about fees in Ireland suddenly becomes a discussions about fees in Canada or the USA or some arcane paper some academic has produced to pass the time!

I have noticed among Irish “academia” a blatant disregard for common sense but there seems a startling, almost pathological need to impress other academics at all costs.

One example, if people had listened to ordinary Joe Soap’s telling them that there were far too many apartments being built, that the country was awash with credit and that the banks were putting all their eggs in the one basket we would not be in the mess we are in now!

People would rather listen to a minister ,who knows he will not be around next year and who has been millions out on his calculations. The same people would rather use arcane reports so they can “go along” with the introduction of fees, under a smoke screen of academia! Maybe they would like to state what fees they paid themselves and what loans they ended up with after finishing university?

it is always easier, to discuss some esoteric study carried out thousands of miles away, than to have to stick to reality!

How many people last year in Ireland had to drop out of college because they could not afford the myriad costs?

How many people will be unable to attend college when these disgraceful fees are implemented?

Ireland has one of the highest rates of suicide in the the developed world, how will this new fee regime impact on these rates? Any research in Ireland done on any of this?

@ Rob Browne

Interesting points, I can see and accept some of what you say.

But try this question, based on the opinion that because third level is free there are a % of students who have no interest or focus in self attainment thru third level study.

Should the tax payer be funding people who are under going third level education as part of the social ritual that all their friends are undergoing?

Someone here posted a great Idea that the 1st year involves fees, and if someone passes then there is no repeat of fees. Fail, then pay to repeat and pay the subsequent year.

Al

@ Al

I have no problem with that suggestion and it is one that I agree is a good idea. However It will not see the light of day, because fees are not about funding education or how best to provide it. The registration tax, has very little to do with registration. Computers do not forget student details and do not need to be reminded on a yearly basis of who is who, or what is what.

These fees and forced student loans do not just target students, they target the fundamental basis of the educational system itself. Which is freedom of access to education for all. Lets not forget that standards have fallen across the board, while at the same time, college fees and salaries have sky rocketed. Surely, if standards have fallen then fees should have fallen and salaries should fall too, but the inverse has happened.

I believe too many colleges are being run along industrial lines and that many students are being mistaken for widgets rather than young adolescents who are trying to make their way in life and who are often vulnerable. Soon enough, we will be depending on them, so it makes sense to treat them right.

Far to many people pay lip service to students. Ms. Robinson sees young people as our potential visionaries. After all, what Ms. Robinson is implying is, that, she for one, had given up hope of our generation providing any visionary leadership! We have failed miserably in this regard. Just watch as our debts spiral from 67bn to 130bn under NAMA. Our generation, provides leadership by reaction, or tribunal. All we get is one report after another. The McCarthy report, the Commission on Taxation, NAMA are just latest examples.

I find the debate about imposing fees hollow and cowardly coming as it does from people who mostly got free education themselves but who now expediently want to tax everybody else for their failures. BTW, it was not the free education that caused the problems it was the sacrifice of societal values for sheer monetary greed that has brought us to where we are now. Taxing education and making students get into debt is a continuation of our lack of vision and is just more of the same. Regards!

@ RB

Robert, I find it hard to debate your composite argument.

I dont think that a relationship between a drop in standards and a rise in wages can be constructed.

But, would you consider that a drop in standards could be related to “freedom of access to education for all”.

Freedom of access does not enable one to work at PHD level.

Al

Comments are closed.