Assets to be means-tested in reform of college grant system

THE next government faces a political timebomb over a controversial report which paves the way for an 'asset test' to help decide who should get higher education grants.

The move would hit farmers, the self-employed and professionals whose children currently get grants in large numbers.

The report was ordered by former Education Minister Batt O'Keeffe and was prepared by an expert team headed by stockbroker and economist Dr Colin Hunt.

It was presented to the Cabinet recently and will be formally launched by current Education Minister Mary Coughlan next week.

The long-awaited national strategy admits that the present system of allocating grants solely on the basis of declared income "does not command public confidence".

"The absence of any consideration of assets and wealth in the existing means test model has limited the scope of the State to target scarce resources towards those most in need of support," says the report, seen by the Irish Independent.

Large numbers of lower middle-income households cannot afford to send their children to college because of the current system, it suggests.

As the Irish Independent disclosed last week, almost 13pc of all new grants awarded in 2008/09 went to the children of professionals, employers and managers. And one in 11 grants went to sons or daughters of farmers who are often asset rich but cash poor.

A further 8.12pc of new grants went to children of what are termed 'own account workers', a category which includes a wide range of occupations from purchasing managers to plasterers, butchers, hairdressers and chefs.

"The means assessment model must be reformed," says the report, which recommends that this be linked to the re-introduction of up-front fees and a new system of loans which students would repay when they graduate -- the amount would depend on how much they earn.

But graduates should not be left with unmanageable debts, it says.

The report suggests that the 50pc expansion planned for higher education will not happen unless the free fees regime ends.

"We need more graduates at every level," says the report, which stresses that the educational level of the Irish population has to be raised.

The Department of Education and Skills envisages rapid expansion in student numbers from an annual intake of just under 43,000 at present to a peak of 68,000 in 2027.

A quarter of those enrolling in 2027 will be mature students (up from 13pc) with 13.7pc from overseas (up from 8pc).

Annual funding from the State would have to increase from €1.3bn at present to €1.8bn in 2020 and to €2.25bn by 2030 just to maintain current levels of resource per student.

But this would be unsustainable, suggests the report, which argues that students have to make a greater contribution to their education.

Students would have the option of paying part or all of their fees up-front or taking out a loan.

It recommends a stronger Higher Education Authority which would monitor performance by colleges and keep back some funding until they improved their performance.

- John Walshe Education Editor

Irish Independent