When a good friend, who is a PhD student at TCD researching higher education in Ireland, sent me a message on Whatsapp on 30th September, I just landed at Geneva Airport, on my way to visiting a friend. In the short message, he said that the conference he was attending – the Higher Education Funding Conference at Maynooth University – was pretty good and would be of interest to me. I replied immediately, saying that ‘unfortunately’ I was on a short holiday to Switzerland, but I would like to find out more about what has been presented during the conference after returning.
So I did.
The one-day conference had a total of six presentations given by five academics, with Prof. Bruce Chapman from the Australian National University giving two presentations, one in the morning and the other in the afternoon. All the slides have been put up on the conference website. My friend was right: the conference was pretty good.
In general, the conference was able to provide extensive empirical evidence of higher education funding in a number of countries.
The presentation given by Rory O’Donnell, Director of the National Economic and Social Council of Ireland (NESC), qualitatively outlined the approach adopted by the Expert Group on the Future Funding for Higher Education, which was established by the Minister for Education in 2014 in response to serious concerns about the adequacy of current funding model. After explaining the key components of each of the three phases undertaken by the Expert Group, O’Donnell concluded with a set of guiding principles under discussion about exploring a new approach to funding. As indicated by Peter Cassells – the chair of the Expert Group – when speaking at the Royal Irish Academy on 23rd September that the group will not report until the end of this year, it remains unclear what exactly the approach will look like.
The rest five presentations were more focused on empirical analysis of different countries: two on Ireland, one on England, one on the U.S., and one on Australia.
Delma Byrne, presenting the case of Ireland, paid much attention to access to higher education and argued that two key policy instruments which seek to facilitate access are compromised. Bruce Chapman, in his afternoon presentation, illustrated an ‘Irish Hypothetical Loan Scheme’. In particular, he used data from the EU Survey of Income and Living Conditions for the calculation of earning profiles and repayment burdens (RB). Although the results were preliminary, they seemed to suggest that ‘an Irish mortgage-loan system will have very low RBs for low income graduates’ but RBs may go upwards to more than 60% for many graduates. (Note: RB in period t is loan repayment in period t as a share of income in period t).
The rest three presentations focused on international evidence on the topic.
Claire Crawford, a Research Fellow of the Institute for Fiscal Studies and Assistant Professor of Economics at the University of Warwick, explained the case of England, with a special focus on the impacts of the higher education funding reform in England in 2012. The reform, of which the core is the change of tuition fees per annum from £3,375 to a maximum of £9,000, includes changes to the level of maintenance grants and maintenance loans, as well as the mechanism of loan repayment. For universities, as Crawford argued, it would mean more funding, while for students the reform means high debt at graduation. As a result of the introduction of the new loan repayment mechanism, there will be lower annual repayments for graduates, but repayments will be made for a longer period of time. Finally, while ‘these reforms increased upfront spending on HE’, they ‘reduced government borrowing and BIS’s departmental spending’. Reflecting on these issues, Crawford reminded the audience that the potential downsides for another government to consider implementing a similar system include: the system is complicated; extent of government subsidy uncertain; there is no incentive for universities to charge less than the fee cap; and may potentially damage (part-time) participation.
Titled ‘Making College Both Affordable & Accessible: Lessons from the U.S.’, the presentation by Sara Goldrick-Rab examined the performance of a number of types of financial aid to students in the U.S. In particular, the key questions to be answered include: Does aid induce people to choose college? Does aid increase full participation in college life? Does aid improve completion rates? Does aid level inequality? and Can aid be sustained? All these questions are important to bear in mind when determining whether any system would be effective.
In his morning presentation, Bruce Chapman firstly outlined some conceptual issues such as the need for government intervention in university financing, and secondly introduced the history and experience of the Australian income contingent loans (ICL) system. In the end of his presentation, he showed a slide of the international experience of ICL, which is adapted and presented below.
Figure 1: The international experience of ICL
Source: Chapman (2015).
While there have been many debates about the possible approaches to reforming the current funding model, the decision will nevertheless be made by the government in the end and any changes made to the system would probably have different influences on different stakeholders (e.g. universities, students, graduates, and government). The conference is useful in providing international evidence on the consequences of alternative higher education funding schemes, even so as it’s held a few months before the release of the final report by the Expert Group.