Education vouchers would be better than the inequality of ‘free fees’

There is wide consensus that Ireland’s system of higher education is under-resourced – and that its funding model requires a radical overhaul. There is less discussion about the current model’s inherent inequity, which can be illustrated with a simple example.

John and Mary obtain identical points in the Leaving Certificate: he chooses arts, she chooses medicine. There are, technically, no university fees, although both have to pay a “student registration charge” of €3,000 per annum.

At one level it appears they are being treated equally. However, let’s assume the full economic cost of John’s course over three years is €24,000; and the full economic cost of Mary’s five-year course is €92,000.

If you deduct the annual student registration charge, it means that the State has gifted €15,000 to arts student John and €77,000 to medical student Mary. That’s a difference of €62,000.

Yet the inequity goes further. Each university distributes the student registration charge to its constituent colleges using an internal resource-allocation mechanism. This is typically based on the Higher Education Authority’s weightings, which are biased towards medicine.

For instance, the HEA weighting for clinical medicine is 2.3, compared with 1.0 for arts and commerce. This means medicine receives €4,182 of the €6,000 that the university obtained from John and Mary when they paid their student registration fees. Arts, by contrast, gets just €1,818.

An equitable system would abandon the notion of “free fees”, which only work to hide inequality. Instead, the State could agree to gift each of its citizens, on leaving second-level education, an equal amount of money. A strict condition should be attached: the gift can only be used to fund the individual’s post-second-level education in an accredited course.

Natural inheritance

It might sound radical. Yet, in 1795 Thomas Paine argued that the system of landed property cut everyone off from their natural inheritance, since no original right to property can be discerned in history.

To resolve this injustice, Paine argued that the state should pay every person, at the age of 21, the sum of £15 (or an income of about €30,000 today). It never came to pass, of course. But there are plenty of examples of the state gifting its citizens, via grants or mechanisms such as the bike-to-work scheme.

So how would such a system operate at third level? The State could gift what might be called higher-education vouchers to each citizen.

Let’s say that the gift maximum is set at €60,000. How would this affect John and Mary?

If John’s arts degree is €8,000 per annum, he would have €36,000 remaining after college. He could use this for accredited postgraduate or continuing education at any time in his life.

In Mary’s case, her medicine degree costs €18,000 per annum or €90,000 in total, requiring her to supplement her education with €6,000 per annum. This could be done via a student loan scheme. Student grants for poorer students would also continue to be available.

More equitable

This is the model in outline; of course, in practice, it would be more complicated. But such a system has a number of advantages. It would be much more equitable than our current model. It would not discriminate against poorer students, as student grants would continue to be available. It would encourage and support lifelong learning.

It would help to reduce the gap that exists between high- and low-points courses. It should mean that students would take more responsibility for their own education, as they would see the need to manage their lifetime store of education vouchers.

Students would also become more attuned to the value of a course relative to its cost; education providers would become more aware of the revenue associated with each course, which should reduce unnecessary expenditure. Such a system would also help to address some of the dysfunctionalities of the CAO points system, where points have become a form of currency driving exceedingly high points for courses such as medicine, which are disproportionately subsidised.

Of course, much work would need to be done before such a system could be implemented. But it is worth debating. Higher education will always be funded through a combination of individuals and the State drawing on some mix of past, present and future earnings.

Obviously, no system is perfect, but our current model is seriously flawed. New approaches should, at the very least, be investigated.

• Donncha Kavanagh is professor of information and organisation at University College Dublin