Paying the price for free education

Below is my Sunday Business Post column from this week, reposted with permission.


Today, I’m writing as an academic and as the Acting Chair of the Higher Education Authority, because I think it’s really important to respond to the recent publication of the Cassells Report on the funding of higher education.

You might not know much about the HEA. It has three main jobs. It disburses about €1 billion in funding to the higher education institutions of this State, it regulates the higher education sector, and it provides policy advice to the Minister for Education and Skills.

The government, the HEA, and all the higher education institutions work within a national strategy around higher education, which takes us out to 2030.

The strategy we as a society have adopted for higher education until 2030 is to push for further and higher education for everyone who wants to go, regardless of their ability to pay at the moment they are admitted. Education should be freely available to those that want to avail of it.

But education is not free. Education has never been free to provide. As I said, the HEA spends over €1 billion of your money on it, and this is nowhere near enough to provide the kind of system envisaged in the strategy to 2030.

Since 2008, the need for the state to reduce its spending has hit higher education institutions very hard. The state payment to universities has fallen to about 64 per cent of the total, while direct contributions by households have increased dramatically.

Of those who are going to college, about 50 per cent pay the €3,000 contribution. Obviously, about 50 per cent don’t, meaning the middle classes, who pay for much in Irish society, are subsidizing those on lower incomes. It also means there are inequities around the income thresholds used to distinguish between someone getting a fee waiver, and someone not.

Over the past six years, as the funds from the state have shrunk, and the numbers of students have climbed, higher education institutions have coped by hiring fewer new staff, giving more work to existing staff while cutting their pay, searching for non-state funding, and digging into their reserves, which was exactly what every other business in the country was doing: more with less. Like anything else, the higher education sector can only do more with less for a short space of time. Eventually, it’s just less.

Higher education is a deeply rooted ambition for much of our society. In 1980, 20 per cent of those aged 18-20 went to third level. Today it is nearly 60 per cent. In 1980, around 15,000 people were going through colleges. In 2015, that’s closer to 44,000. This is expected to rise as the number of school leavers increases in the next 15 years.

The Cassells report is clear. On page 10 of the report we read: “The current arrangements are simply not fit for purpose. Significant investment and reform is required. The challenge cannot be addressed by minor tweaks or easy fixes.”

Like any business under pressure, during the crisis higher education institutions managed their finances as best they could, and delivered on the outcomes the state and the HEA set them. Student and employer surveys and the HEA’s system performance framework show us that, despite all of the cuts, the system as a whole did its job well.

Here’s just one measure to give you a sense of how well the system performed. In 2012, the latest year we have comparable data for, Ireland had the second highest level of maths, science and computing graduates per 1,000 of the population aged 20-29 in the EU, and this was nearly double that of the US. Ireland had the highest percentage of students studying science, maths and computing in the EU at 16.4 per cent, compared to the EU-28 average of 10.4 per cent.

But now we have institutes of technology which have no reserves and which are financially vulnerable, which haven’t upgraded their computers or laboratory equipment for seven or eight years, with rotting buildings and staff looking forward to an increasing workload due to increasing demographic pressures,

Nor am I just talking about small colleges and institutes of technology. I’m talking about universities too. Several of our flagship educational institutions are running large deficits, and they are really struggling to make ends meet.

It is now only a matter of time before a funding crisis causes one of three things to happen. Either the higher education institutions stop admitting more students; or they simply run up ever-greater deficits back-filled by the taxpayer while starving services for students and reducing the quality of the educational experiences for these students; or some of them shut down.

In the long term, you can’t have demand rising constantly with a degradation of the ability to supply quality outcomes and expect everything to remain as is. The result is a poorly-resourced, poorly-performing system which doesn’t meet the needs of society.

The Cassells report makes the case for three options. One: increase state funding and abolish the student contribution. Two: increase state funding, keep the student contribution. Three: increase state funding, delay the student contribution by building in a loan structure, which you pay back later when you can afford to.

Option 2 increases state funding by less than Option 1, and Option 3 increases state funding but by less than the other two.

Many groups have jumped to discredit option 3, the income contingent loans option. This option makes education free at the point of entry and enables burden sharing by taking on the default risk of those that do not repay fully. The income repayment threshold reflects the fact that only those benefitting from third level education should be responsible for some of the cost. The devil is in the detail of this proposal, and those details have not yet been worked out.

Option 3 may or may not be the best option, but it’s not the worst, either. The worst option is doing nothing, or next to nothing. The higher education sector has shown it can deliver efficiency gains under challenging circumstances. But that can’t last forever, nor is that delivery free of charge.

So who should pay, and how should they do it?

It cost just over €1.8 billion to fund the system from all sources in 2015. To meet the future demand for higher education we know will be there, either students and/or their families, or the state, or employers have to pay. All we’re really talking about is the proportion of the contribution amongst the groups.

The standard response from those reacting negatively to the Cassells report has been: pay for the necessary increase in third-level funding by taking it from general taxation while reducing the €3,000 fee.

This is a cop-out, and also very cynical, as many of those arguing the point know higher education will join the queue of government priorities. Cassells argues against “minor tweaks and easy fixes”, and this is what those who oppose thinking about Cassells’ recommendations are advocating.

The ‘general taxation’ argument is also one option mooted by the report. Guess what? It’ll cost you, the taxpayer, a fortune. It’s also inequitable and regressive. Those who don’t go to third level subsidise those who do, and those who do are overwhelmingly from the middle and upper classes, as HEA research shows.

Cassells estimates the additional cost to the state of supporting higher education will be around €600 million per year to meet the current demographic and quality challenges, rising to €1.3 billion per year by 2030 under the ‘general taxation’ structure.

To give you a sense of scale, the entire quantum of increase for every kind of spending in Budget 2017 will be around €1 billion. The chances of higher education receiving a €600 million increase are, to put it mildly, vanishingly slim when housing, homelessness, and water are the key problems to be solved.

I believe deeply that higher education is the means to a better society.

Underfunding the system, or ignoring its problems as the system stagnates is, frankly, a dereliction of our duty. The education committee of the Dáil, now tasked with delivering on Cassells, needs to engage with the substance of the report and bring it forward, and the HEA will assist and advise as necessary.

By Stephen Kinsella

Senior Lecturer in Economics at the University of Limerick.

32 replies on “Paying the price for free education”

In so far as there’s a public good embedded in the product mix then general taxation is not a bad way to go.
Add in the other goods not easily amenable to any form of individual market oriented pricing and it becomes more the way
See here , an expanded version of my Irish Examiner column

I believe the problem ultimately lies in the monopoly ‘higher education’ has on accreditation. Let them educate; and let them live or die by the results they produce. At present, 3rd level education institutes seem to be dinosaurs, demanding to be fed simply for existing. Having experienced the system recently I honestly was shocked by the profligate waste and mismanagement of resources. University education is not a blessing from the gods for success nor should it be a right of passage for the middle class to perpetuate their standard of living. Let those that want a middle class income learn a trade/craft/skill and let universities produce thinking people capable of original thought. I am grateful to the state for funding my education (my student contribution was waived). If I paid for it myself I would be demanding my money back.

A recent student suggests that there is serious waste in the system and you are not able to spot any of it? Really? How about thinking about a few possibilities.

Waste/ Some possibilities.
1. Same modules/courses in multiple colleges.
2. Same modules in the same college.
3. Poor delivery of content in lectures (research shows that research activity is negatively correlated with teaching quality)
4. Too much time in labs (research show mixing in simulations produces better results)
5. Too much time in lectures (research shows blended learning with less contact time works better)
6. Irrelevant content.
7. Manual methods for providing feedback on student work.
8. Managerialism?
9. Enforcing the same learning experience on all students irrespective of their ability or previous learning.
10. Lack of efficient student management systems.
11. Over-provision of resources/facilities to students (e.g. funding of the Jazz Appreciation Society)


To which report are you referring? Have you seen any of these possibilities yourself? Some of the possibilities you raise as inefficient are actually features of a robust system. One example of your issues 1 and 2: at UL we teach introductory economics in about 6 different courses across about 10 modules. This might look like inefficiency, but it’s delivering on what we know the students need–a standardised presentation in classes smaller than 50 or so students.

Can you point me to the research you cite for (3, 4, 5), please?

Stephen, wrt point 3 – there are dozens of scholarly texts and hundreds of journal articles. Keep you reading for a very long time indeed. Wrt point 4 – as an academc biochemist I can personally vouch as to the uselessness of much practical (lab-based) teaching. I’d classify much of it a ‘busy-work. Not sure about point 5 – but there is a lot of published work on the matter.


if I get some time I might dig up the research for 3,4 and 5 but you asking for this concerns me. I was an invited participant to one of the consultation meetings for this report and was shocked to find out that the member of the core group who was at our table disputed the assertion of a negative correlation between research activity and teaching quality and was totally unaware of its existence. (actually nobody at the table was aware of it) While i accept that the regular academic who does research should not necessarily be aware of this type of research I would think it is important for those who take on responsibility for setting the direction of higher education in Ireland.

As for the “feature” of teaching the same content to multiple groups, I would suggest that this would be great if we could afford it. If we could achieve 80% of the learning impact with 20% of the resources, this might be considered to be a good “value proposition”. It is easy to create good quality learning experiences with plenty of money but requires more skill (and a willingness to change) to create adequate learning experiences with less money. And remember if you ask students what they think of the quality of what they are getting they are generally dis-satisfied (and have been since I was there 40 years ago).

Lastly, I’d like to suggest that to improve credibility, those who defend the existing system (in terms of efficiency and quality) might start by admitting that there are problems with both, identify what they see as the problems and suggest how they might be solved with better systems as well as just more money.

Good luck with the work.


On point 3 – research activity / teaching quality

Hi Brian, it may be that we’ve read the same stuff. It may not. I think it’s well worth sharing findings like these. I’ve done a fair bit of reading on these topics as you’d imagine, but I’d never claim to have read it all, and always want to know more. Given that you haven’t had time to dig them out, I can’t be sure we’re talking about the same things, and I’d welcome a positive engagement in this respect.

One thing I can say for sure is that the system could not operate on 20% of what it’s costing now and deliver 80% of the outcomes society expects of it.

The student surveys conducted nationally say the opposite–students are, generally, fairly happy with their programmes, as are employers. The QQI has said, and I have said, that quality of outcome is beginning to suffer as a result of funding cuts. Nobody assumes the system is perfect. But you don’t solve a problem of underfunding with less funding.

Hi Stephen.

The 80/20 comment was somewhat hypothetical but the argument that with a willingness to change and some ingenuity we can achieve more with less is still valid. You are correct in stating that you can’t solve an underfunding problem with less funding but I am suggesting that underfunding may not be the real problem (I believe the real problem is vested interests and a lack of imagination within the current system). Having said that, change is hard and we still need to fund the system right now and this needs money. However, this might lead me to the conclusion that the money should be provided to those institutions who are willing to change and become more efficient. (one might suggest some Darwinian competition here but for that to happen institutions have to be allowed to fail – I can’t see that happening)

In regards to positive feedback from students I would suggest that they have low expectations from teaching but I do accept that it has improved slowly since I started 40 years ago – lots more to do. (Most lecturers don’t even record their lectures).

(I’m a bit puzzled by that employers are happy with higher education. They seem to always be asking for us to turn out 22-year-olds that are experienced 30-year-olds.)


Hi Brian, the survey instrument is pretty detailed in terms of teaching, details here. Lots of lecturers, myself included, want to record our lectures, and it is a commitment of most HEIs, but we can’t. The computer/microphone costs are beyond the IT departments of our universities, who are starved of cash. As I said in the piece, many HEIs are using computers from 7 or 8 years ago. Lecturers like myself who cobble together the gear ourselves do record our stuff (mine are usually here: are usually just adding to the already large workload of research, teaching, and admin.

Ok Stephen – I might adjust my position somewhat. Yes, teaching has improved and a significant minority of lecturers are willing to change their teaching methods. And yes, we do need more funding to both solve the immediate crisis and to invest in more efficient systems (and my preference is for higher fees and student loans). And though it could be argued that this is not the discussion you are having on this blog post, I would still contend that the existing system is extremely inefficient and separately we need to address this. There are many problems including; too many specialised courses, “less than optimal” teaching methods, conflict of interest between teaching and research and another one that I firmly believe – too many people going into full-time higher education (vocational may be more appropriate for many and work-based HE can be both cheaper and more effective).

So, I’m OK to park this discussion for another day.


Good article Stephen, the money has to come from somewhere.

Have the 3rd level institutes really looked for funding outside General Taxation & Students?

– I.T. courses sponsored by Google/FaceBook/Oracle etc (provide these guys with capital allowances for investment),
– Communications infrastructure sponsored by Vodafone/3Ireland etc (can be used for testing, new product roll-out etc).
– Revision of course delivery developed, planned and implemented by IBM – in return give IBM access to all the data
– European Law classes funded by the EU?

I’m not sure how much commercialization is practiced in Higher Education but from my experience (across 3 Dublin universities in the 2000’s) it was quite limited.


Hi Andy,

Thanks for your comment. I guess more generally HEIs have looked at corporate or philanthropic routes to supplant and supplement the State’s block grant. Smurfit Business School would be an excellent example–they have almost no State funding and are almost wholly funded from private sources. Other HEIs are much, much more dependent on state funds. The commercialisation elements are coming along as well, in fact I think there may be some success stories there, but of course much more needs to be done.

Well written article and to the point. The system will run out of money very soon.
As both graduates and employers benefit from spending on third level education, has any consideration been given to a PRSI levy on both employee and employer for all graduates hired. The levy could follow the graduate prsi number, for all employments.
What should be a matter of concern is the lack of employer contribution in terms of prsi (lowest in Europe?), lack of pension provision, low corporate taxes, and zero contribution to the education of staff employed.
A specific levy might begin to redress the imbalance and introduce the principle of much touted user pays principle.

There is little sense in treating all undergraduate programmes in the same way, or in differentiating so radically between undergraduate and postgraduate programmes..

(a) Some degrees are much more expensive to provide than others (medicine and many science and engineering programmes), yet they are all subject to the same flat “fee” regime of €3,000, which implies really big differences in the subsidy coming from the taxpayer.

(b) Some undergraduate degrees are pathways to fairly lucrative professional earnings (medicine, law, finance) and others provide little direct access to really attractive earnings.

Personally, I would agree that Income-contingent loans (ICL) are a good idea: the horror stories in the media and from some politicians on crippling debt problems are based on a total and probably willful misunderstanding of ICL.

Focussing on expected earnings of future graduates is catered for by ICL, and the public good aspect is catered for at least in part, by having a decent minimum earnings threshold before repayments are due. However parental circumstances matter as well: consider two prospective students, one from a high-income and one from a low-income family. The present arrangements give a much greater degree of support to the latter, which is fine. What about taking parental means into account when designing a loans scheme?

A quick suggestion. First set a standard support level for all undergraduate students: say €10,000. Second make the percentage of this which is in the form of a grant depend on parental income, so that someone with a long-term unemployed parent who has several other dependents gets 100% as a grant, and someone from a household with €150,000 gets only loan finance, with a suitable sliding scale in between these extremes. You could go further and taper access to loan finance in the case of very high incomes (say over €150,000).

The general idea would be to (a) relate fees to course costs, (b) relate subsidies to family income and (c ) relate repayment to future graduate income. I think this might solve some of the intergenerational and other equity issues.

However I’m not so optimistic given the abysmal level of public debate so far. Like the Major in Fawlty Towers “sometimes I wonder why we bother, Fawlty”.

John, I see the switch away from the size of the subsidy being conditional on parental income as one of the important advantages of a student loan system for a couple of reasons. First, our students are almost all over 18, and hence adults. I personally know several people who were not allowed by their parents to do their degree of choice because their parents held the purse strings. In addition, moving away from assessment based on parental income allows us to get away from the clear unfairness of grant allocations at present, particularly for the self-employed and for families who have several children in HE at once.

The rationale usually given for subsidizing students whose parents have low income is that they are more likely to be debt averse. However, in practice this doesn’t seem to materialize in countries where ICLs have been implemented, probably because the debt involved is not standard debt: it doesn’t have to be repaid if you don’t earn enough, so the taxpayer takes on the risk.

The only other argument I can see for taking parental income into account is that supporting children’s living expenses is a greater issue. But this would point to a greater maintenance grant rather than greater fees subsidies, and I think the Cassells report comes out in favour of this, if I recall correctly.

I agree with your point about relating fees to course costs. But I think that’s probably a detail that could be worked out later if and when the principle of ICLs is accepted.

I accept much of what Stephen and Brian say, but Stephen’s list of three things that might happen is, I suggest, both too conservative and too passive. It seems to accept that the business will trundle along as it has been doing, whereas the impending crisis might instead be addressed by major changes in business organisation, knowledge production and service delivery methods, which don’t seem to have changed very much for some time, despite some tinkering around the edges. So:

– devise a single primary degree course in each major discipline, to be produced and delivered centrally through open/blended/online/whatever learning. Yes, I know that developing good materials is very expensive, but there will be many folk, still on the public payroll, able to work on it

– devise sub-degree options using as much of the same material as possible

– shut down most small institutions but allow them to tender to provide local support services for students

– divorce research from primary-degree-level teaching: concentrate it in a small number of institutions (which might be called “universities”) offering only masters and higher degrees; these “universities” would be much smaller than they are at present.

Pace Stephen and Brian, we do not have to accept that the present product (or goods) lineup is the best possible or that the production methods are beyond improvement. The current proposals are concerned with paying for what is currently on offer; I suggest instead changing that offering.

I do, however, accept that there is little chance of anything sensible ever happening in Irish politics.


I’m not defending or condemning the product mix. I’m saying it is. Also note it’s entirely divorced from what people think of as the products (degrees in this and that).

Anyone who’s even halfway wired into Leinster House gossip knows that the previous government did not favour publication of the Cassells Report before the General Election in February. That was understandable. From a politically partisan perspective, adding the issue of third level fees to the election agenda would have exposed an already beleaguered Labour Party to even further abuse from its opponents and competitors. The Chair of the Oireachtas Education Committee, the Labour Party deputy, Joanna Tuffy , always a strong advocate of the ‘free fees’ approach, and similarly the then labour Minister for Education, Jan O’Sullivan, were unlikely to be enthusiastic about the prospects of a debate on funding higher education into the future morphing into an election issue. Particularly so since (a) the much-vaunted launch of ‘free fees’ in the 1990s, and its subsequent modification to a student ‘charge’, is exposed as a failed policy, and (b) the current funding model for higher education in Ireland is already in crisis, and unsustainable into the future if the numbers expected to seek access to third level continue to increase as projected.

The problem is that already the guts of a year has passed before any public debate has become possible on what most acknowledge as an ‘urgent’ issue. On its publication earlier this month, both the Minister for Education, Richard Bruton, and the Tanaiste, Frances FitzGerald, have stated that the first port of call for the Cassells report will be the Oireachtas Committee on Education and Skills.

To date, only Dail members have been appointed to the Committee so its final composition, and political balance, remains unknown. (See: Likely, it’ll be well into the Autumn before the Committee, chaired by Fianna Fail TD, Fiona O’Loughlin, has an opportunity to sink its teeth into the meat of the report. How long it takes in its deliberations, and hearing witnesses etc., and to produce its own report, is an open question. The Tanaiste told the Dail on 12 July that the next stage after that will involve a decision by the Minister on the best way forward.

There are many uncertainties about this process. For one the government may not remain in office long enough for the Committee to complete its examination, and deliberation, of all the issues and report back. Should that happen, the whole exercise becomes futile. The absence of possibilities for a broader public debate is also worrying. For sure, the AAA-PBP TD, Paul Murphy, will seek to mobilise students around vocal opposition to any ‘fees’ based solution – he has already called for that. There has to be a risk that, left solely to the politicians, the opportunity to at least try and get it right this time, in the long term interests of students, their families, the research and teaching academic community, and our society, may yet again be reduced to the playing-out of agenda politics.

Apart from the value of the Cassells report itself, there’s a growing body of impressive research around issues in higher education – I’ve recently had personal cause to pore over some excellent papers and articles in pursuit of insight into a particular aspect of government research policy – which could provide the basis for a more broadly-based discussion involving the public. Does the HEA have a role here?

Maybe the HEA might consider some form of public engagement project? A bottom up approach encouraging local public engagement with the issues throughout the regions? It’s not as if there’s a shortage of HE venues around the country to host a series of public meetings, both to explain what the options are and to hear what people want and what their concerns are? Perhaps not the world’s greatest idea; but it might stimulate some thoughts about a better one! As things stand, the process that’s been laid out for policy-making on third level funding hardly induces much confidence.

Veronica, thanks for this. The HEA will be reviewing the funding situation and more public engagement is planned. Could you give me a bit more insight into what you’re researching?

Of course. If I may, I’ll email you a brief outline of a paper I’m currently writing up, (or, more accurately. attempting to write up!) on Irish govt. science policy.I’d be interested in any critical feedback you might offer. Too embarrassed to say any more about it on a public forum.

That’s interesting. they need to update their webpage then as its still listing Senate members as “to be appointed”.While stating that it’s all in the hands of the Education Committee, in the same breath the Minister lays claim to a much more fundamental reform of the HE sector, stating that his Department is now carrying out a piece of work to nail down priority goals and targets for the higher education sector for the next period and to develop new funding mechanisms to ensure we deliver on these”.

According to the Department Press Release, “Minister Bruton indicated his belief that additional funding for the higher education sector must be accompanied by new performance-based funding mechanisms and new targets for improved outcomes for the users and funders of the service. Examples of targets that Minister Bruton believes should be adopted include:

Provide for 50,000 upskilling and reskilling places over the next 5 years to meet identified skills gaps in the economy and to support an increase in Lifelong Learning

Increase participation in higher education by the most disadvantaged socio economic groups by over 7 percentage points

Increasethe numbers of entrants studying on a flexible basis (online, part-time) by 25%

Increase the number of students undertaking a work placement or work based project as part of their course by 25%

Increase new research enrolments by 30%

( )

All very worthy, no doubt; but brings to mind, what Tom Garvin had to say about increased managerialism in higher education policy in an Irish Times piece a few years back:

“Third-level education in Ireland went, in half a century, from the belief that higher education had nothing to do with economic development to the equally absurd assumption that higher education was about nothing except economic development: from one rather foolish barbarism to another.”

There are two issues left largely unaddressed in this report:

1) Drop-out rate, particularly at ITs, is very high in Ireland. Thousands of students (disproportionately male) are channelled into a academic-type courses for which they neither have the aptitude for nor interest in. There is a non-trivial private and public costs to this. They would be far better off in apprenticeships but unfortunately the educational establishment in Ireland has never prioritised this (not has business to be fair). Fixing this problem

2) Different third-level courses provide quite radically different earnings potential (on a spectrum from arts to actuarial) but students are all charged the same. The pre-95 system which set fees roughly in line with the economic cost of the course was arguably more equitable than ‘free’ fees that lasted for 15 years or so or the current €3k fee situation. Re-calibrating this would pull in tens of millions extra every year.

I am far from convinced that there is a growing cost pressure at third level. Obviously demographic pressures will increase until 2030 or so but if you simply leave places unchanged in the face of rising demand you will simply push up the median ability level of entrants. Yes, this is exclusionary, but you would only be returning to the situation that pertained 15 years ago. Many academics privately admit that average standards have fallen in the last ten years and the bottom decile probably aren’t academically suited in the first place.

A large number of third level courses are of marginal utility to the individuals attending, and to society at large. Imposing a greater direct cost to the student – either immediate or deferred – should result in a more critical assessment by prospective students of the value (in the broadest sense) of pursuing such courses.

I have no problem with the ‘pursuit of knowledge’ for its own ends, but what is the benefit of a student of average ability studying, say, English literature for four years in Trinity and emerging at the end with a 2.2 degree? Have they really learned anything? Is society better off? Who should shoulder the €40,000 or €50,000 cost of providing such a degree?

I was amused to read the following in Houellebecq’s Submission:

“The academic study of literature leads basically nowhere, as we all know, unless you happen to be an especially gifted student, in which case it prepares you for a career teaching the academic study of literature – it is in other words a rather farcical system that exists solely to replicate itself and yet manages to fail more than 95% of the time.”

Higher education is in many ways just subsidised leisure for the youth (it was great btw!). In some countries males have to complete military service first, which seems a reasonable bargain.

Over time something will have to give in the Irish system. It can be (largely) free or universal, but not both. This report is imperfect but at least implicitly acknowledged this.

But those papers don’t say that there’s a negative correlation; they say it’s zero. And they exclude postgraduate education from consideration, where research activity clearly has the greatest potential for benefit.

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