Student loan scheme option no solution – Deputy Seán Crowe
Sinn Féin Education Spokesperson Seán Crowe, TD, believes the new government-backed loan scheme for post-graduate students that was introduced this week by Bank of Ireland will further perpetuate a two-tier college system. DescribIing the scheme as giving most students whose families who are on a low or middle income a….. swim,sink or drop out of the entire race option.
Deputy Crowe was responding to yesterday’s launch by Bank of Ireland of a post-graduate student loan scheme that has been developed in conjunction with the Department of Education and Skills (DES) and the National Treasury Management Agency (NTMA).
It will allow the bank to pay the tuition fees of participating students for the duration of their studies. Repayments under the scheme will be interest-only until three months after the student graduates, with capital repayments thereafter at a variable annual interest rate of 10.8 per cent
Last year 3,600 post-graduate students pursuing a diploma, masters or PhD qualified for a maintenance grant and free fees that were worth up to €6,000 each per year.
Deputy Seán Crowe said: “Cuts announced in this year’s budget removed the postgraduate maintenance grant making it impossible for thousands of Irish students to attain a postgraduate qualification.
“There are well founded fears that the loan scheme announced by Bank of Ireland, which has the support of Minister Quinn and the Department of Education and Skills (DES), will mostly benefit students who are already financially secure. It is extremely likely that anyone with a poor credit rating or who never had a bank account may will be prevented from securing a loan and therefore excluded from pursuing their studies particularly at postgraduate level.
“To use a sporting parlance the scheme will give most students whose families who are on a low or middle incomes…. a swim,sink or drop out of the entire race option.
“As the USI have rightly pointed out – many students are already heavily overdrawn as they struggle to pay for their undergraduate programmes so this scheme will be of limited value.
“There also can be no justification for applying a 10.8% interest rate to the loans on offer which is both punitive and unfair. It compares very unfavorably with the British government-backed scheme which charges an interest rate of 1.5% and the reality is that most students who access this loan will find themselves burdened with years of debt.
The high rate of interest will act as a disincentive for anyone wishing to pursue a post-graduate qualification and I also share the view that this scheme will become a long-term alternative that is designed to replace central government funding and allow the reintroduction of third level fees for undergraduate courses.”