University Funding

It’s a thorny question: how should universities be funded?

Another way of asking the question is: who should pay?

In order to answer this we might ask: who benefits? (cui bono) The argument is that whoever benefits should pay.

Following this line of thought, some would argue, it follows that the students should pay. Because, studies show that the average salary of a university graduate is higher than the average salary of a non-graduate.  So it seems that yes, the students do benefit (in purely monetary terms anyway). This means that students should pay, and that’s why we have fees.

But doesn’t society as a whole benefit as well? One could argue that, for example, health care has improved and everyone in our society is living longer because of medical schools in universities. So it also seems that society as a whole benefits. This means that society should pay, and that’s why the government gives money collected in taxes to the universities.

Developing this point, the DCU students will vote on five different ways to fund universities. These are

– means tested tuition fees,

– a graduate tax,

– a student loan scheme,

– a student contribution fee of 3,000 euro,

– a fully free system funded by conventional taxation.

In the first option, the student pays if they come from a family with ‘high’ income, and they don’t pay if they come from a family with ‘low’ income. In the second option graduates pay after they graduate. This option was supported today by the ESRI. They propose that if the income of a graduate reaches a certain level, they pay an extra tax for a number of years. This is called the Income Contingent Loan scheme. (Another variation is to pay this graduate tax for their lifetime.) The third option, a student loan, usually goes along with fairly high tuition fees, and students need a loan to pay them. They get the loan from the government, at a good interest rate, and repay it after graduation. The fourth option is where all students pay something, while they are students. The last option is where all of society pays. Well, those who pay taxes anyway.

I am ignoring the issue of precisely how much money is paid in each of these. These details need to be worked out, and I haven’t done it.

In some countries there is a combination of the state paying and the students paying. Here is the government contribution to UCD for the last five years:

2008   186,406,034 euro

2009   175,580,384 euro

2010   152,618,765 euro

2011   140,918,644 euro

2012   121,731,537 euro

[Added: over the same period, full-time student numbers increased nationally by 17%.]

This shows that the government/taxpayers contribution is decreasing every year. The rate of decrease is quite alarming. Normally this decrease would be compensated for by an increase in fees. In other words, we trade society paying for the students paying. In Ireland the universities cannot do this because the universities are not allowed by law to charge tuition fees to undergraduates. There is a fee, called the student contribution charge, whose rate is set by the universities subject to a legal maximum. Currently the maximum fee allowed is 2,250 euro. Some or all of this fee can be covered by a grant if the student comes from a family with low income.

To give a full answer, one also has to answer the following question: what is the purpose of a university? A question for another day.

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One thought on “University Funding

  1. Pingback: Ninth Level Ireland » Blog Archive » University Funding

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