Thursday, November 24, 2005

Third Level Fees

A new report has called for a reintroduction of collage fees.

One of the many arguments against free fees is that the students should pay as they will gain from it and earn more money because of this. This operates in many countries through a low interest loan scheme and many believe that this should occur in this country as well. This already happens in this country believe it or not. Let me explain with a crude and probably wrong tax rates example.

Johnny Johnson leaves school and has 2 options. 1 go to work or 2 get a third level education.

If he takes option 1. and gets a job which earns him an average salary of €22000 over 15 years. He pays his tax at about 20%. This means he contributes €60000 to the government.

If he takes option 2 and goes to collage for 4 years and then works 11 years with an average salary of €38000. So the government contributes to his collage education to the tune of lets say €20,000. He then pays tax at about 42%. So after the 11 years of work he has paided €175,560. So for initial investment of €20,000 the government has made an additional €115,560 which is in fact quiet a high interest loan. Or the government has €95,000 extra for educating Johnny then if they did not. Now that does not include the extra VAT and stamp duty that the option 2 Johnny Johnson will pay. It is not true to say that the work Johnny 2 does will always contribute more to the GNP then un-collage educated Johnny but it in most cases it probably will. That means more money for the government and the country. So to say the government does not benefit from free fees is totally wrong.

Also do people really think that all teenagers will see the benefit in the long run of going to collage if they have to take out a long term loan?. I doubt it. It will hit the collage numbers and the less well off.

Collages do need extra money. It is in the interest of both industry and government. Industry expects the quality of graduate but are unwilling to participate in the education. Not only in funding but also in giving work experience. Many of the collages don’t have work experience components in their courses. The government needs to but is money where its mouth is and invest in education. The existing measures are insufficient.

The idea behind free education was to encourage people from less well off backgrounds to go to collage. Since free education came in, less well off admissions to collage have not increased. This is not a fault of free education. The problems occur prior to leaving Cert level even prior to secondary school. That issue needs to be solved prior to leaving cert once it is then it will be shown that free third level education will benefit less well of students. Also people who say that the free third level fees benefit the middle class are right. But non-free fees will benefit them even more as they will not have to compete with more talented less well off.

1 comment:

Anonymous said...

I completely agree with that post. Only the children of the very well off could do the necessary six years of medicine if fees came back in. Who in their right mind would do a postgrad? Besides, if fees came back in it wouldnt be the colleges that would benefit. The EUR750 that was introduced a couple of years ago goes straight to the government.