The Cassells Report, which examines different ways of funding third-level education in Ireland, was published last week. In the words of Minister for Education and Skills Richard Bruton, a new funding model is needed, because “in the coming decade the demographic bulge will start to come through to higher education, with numbers expected to be nearly 30% higher by 2030.”

Three models

There are three models for funding higher education proposed in the report and there is no doubt the first one is the most popular. This sees the state significantly increase its core grant to institutions and abolishes the €3,000 undergraduate student contribution. This model also potentially incorporates extending free tuition to postgraduate programmes.

The next two options see students essentially pay for college themselves – whether that’s upfront, or later, in the form of loans.

The loans option sees the abolition of the existing upfront fees for both undergraduates and postgraduates and replaced with a system of income-contingent loans provided by the state. Repayment of loans would only begin when a graduate’s earning reaches a certain level and would be set at a defined percentage of annual income, collected through Revenue. Those whose earnings do not reach the threshold would make no repayments.

The remaining option keeps the annual €3,000 student contribution charge in place, and retains postgraduate fees, but also brings in a significant increase in state funding. Under the student grant system those who qualify will see the €3,000 charge paid for them (as is currently the case) but under this model, parameters would be set to allow more people to qualify to have this charge paid for them.

One reservation about this option, according to the report, questions “the fairness of the fee waiver system based on parental income at the point of enrolment, under which some with significant assets receive support”.

Free fees initiative

Also, in relation to this particular option, it is worth noting that the current fees paid for students by the government under the free fees initiative are sometimes cheaper than the student contribution charge, which has increased to €3,000 from €900 in 2008. If the student contribution charge was abolished and students had to pay the tuition fees themselves, in some circumstances they would be much better off.

For example, if you do arts in UCC, NUI Galway or NUI Maynooth, the tuition fees per year are €2,685. Tuition fees for commerce in NUI Galway are €2,598. A Level 6 Higher Certificate in WIT costs €250, a Level 7 ordinary degree in WIT costs €250, while tuition fees for a Level 8 Honours Degrees in WIT (with the exception of Engineering/Architecture & Music Honours degree or Nursing) is €819.

Other courses are more expensive, however. Tuition fees for a science degree in UCC and NUI Maynooth are €4,320 per year. Nursing in Trinity, UCC and NUI Galway and WIT costs the government €4,106 each year in tuition frees while fees for medicine in Trinity and UCC are around the €5,500 mark.

Part-time learners

The report is particularly concerned with giving better support to part-time and postgraduate students with the majority of supports for postgraduate education removed in 2012.

In all, 70% of part-time learners are over the age of 30 and it is recognised that there are specific barriers for these learners, including childcare and family responsibilities.

Grant support

The report has a lot to say about grant funding too.

The expert group behind the report believe the value of grant payments needs to be increased, with specific attention paid to those on lower incomes. The report says that while the special rate of grant goes a considerable way to covering college costs, only 30% of maintenance grant holders, or 11 per cent of all undergraduate students, qualify for this enhanced rate. The “full standard” grant only covers 30-35 % of the estimated costs of living.

The report says that “it is essential that there are sufficient financial supports available to attract and retain students in higher education and to allow them devote sufficient time and energy to learning.” The report also says the current system of income supports is not sufficient and that the level of grant support is forcing many students to commute long distances, rely excessively on part-time work or family contributions and that families are turning to commercial lenders.

All of the funding models proposed in the report involve an enhanced student support system which is intended to deliver an increase in the value of maintenance payments to better reflect living costs. This enhanced student support system will also broaden the coverage of the scheme to part-time and postgraduate students and will better target supports to those that need them most. Better targeting supports seems to partly be defined by the report’s authors as introducing an asset test, and this is an issue of concern for the farming community.

The asset test (which would see the value of assets such as land being taken into account when determining who should receive the third-level maintenance grant) is explicitly mentioned in the report: “There are well-discussed inadequacies in the current means testing arrangements which only consider income and take no account of capital, assets or accumulated wealth.”

Recommendation 5 of the report says the “current model of student support maintenance grant should continue and should be...better targeted by taking account of capital assets and accumulated wealth.” The asset test has been mooted intermittently in recent years following an announcement in Budget 2012 that it would be introduced, but nothing has materialised – yet. Minister Richard Bruton says he wants to increase participation of the most disadvantaged socioeconomic groups in higher education by over seven percentage points. However, if he introduces asset testing, he is going to leave one disadvantaged group behind: farmers and the self-employed on low incomes.

The average farm income in 2015 was €26,536 according to Teagasc’s National Farm Survey (which excludes the 50,000 smallest farms from its survey). This is way behind the average industrial wage of over €43,000. IFA Farm Business Chairman Martin Stapleton said the IFA remains opposed to any attempt to include productive assets, such as farmland, in the means assessment for third level grants. He said, “Productive assets are required by farm and other small businesses to generate income, and are not a measure of additional ability to pay. To develop a means test that would combine the asset value and farm income to deliver a measure of ‘ability-to-pay’ would simply be double counting, and totally unacceptable”.

A survey published by the Higher Education Authority (HEA) last November shows that of all new full-time undergraduates entering first year of higher education for the academic year 2013/14 in HEA-funded institutions, the county with the highest proportion of students on grants in Donegal with 67%. This is followed by Monaghan at 63% and Cavan and Leitrim both at 61%. Dublin at 35% had the lowest percentage of students receiving a grant while Kildare had the second lowest with 42% of its students on grants. Families living in rural Ireland incur higher costs in terms of accommodation and transport when compared to those living in cities where the colleges are located.

The most recent Equal Access Survey data on the matter is from 2011/12 and this found that of the new entrants to third-level in that year, 8.9% of those who got grants were farmers. According to the same survey, 36.1% of new entrants to third level overall got the grant. 41.8% of farmers’ children got the grant, illustrating that the percentage of farmers receiving it compared to the student population generally isn’t as disproportionate as is widely perceived. Half of the manual skilled sector got the grant in 2011 and over 60% of the unskilled sector were in receipt of it.

The income level used for determining whether the children of farmers and the self-employed are eligible for the maintenance grant is already very strictly controlled. The income figures that farmers submit for income tax purposes cannot also be submitted as the income figure when applying for the maintenance grant. The income for assessment for SUSI grants is actually higher than the taxable income because there are a number of legitimate business costs which are disallowed. These include capital expenditure, interest on capital expenditure and interest on leasing expenditure; nor is there deduction allowed for depreciation.

The Cassells report will be forwarded to the Oireachtas Committee for examination and discussion.