Student grants Vs Student loans

OU812

A comment in another thread inspired this (probably meandering) question.

The government give grants to students for third level, which according to the poster on the other thread, mostly goes across the bar at the local. I know this is a generalisation & doesn't happen with every recipient. Also, not everyone qualifies for the grant.

This poster mentioned he borrowed his fees & works part time to pay down the loan, which is extremely admirable & responsible.

So, considering the government give this grant, why can they not loan the money at a very low interest rate & have it paid back over the next ten years direct from the recipient's salary?

It would mean the government in literally investing in the future of the country & also earning (a very modest) interest. College would be opened up to everyone & the money it's costing right now would become cost neutral (or even positive).

alphamule

If you fail to meet the criteria it would be a good alternative!

Jawgap

I think if you get a loan, you're incentivised to pick useful courses and work on them.

There's also more potential for the state to get some payback - for example they could 'forgive' loans or reduce repayments if people go into certain jobs or professions - teaching, medicine etc - in Ireland.

It works in other countries, why not here?

OU812

Well the loan would be tied to PPS so it would be paid back apart from death or permenant emigration, but that would only be a very small percentage.

Even if someone came all through college & then never worked a day in their lives, it would still be repaid because S/W would be reduced to pay it.

alphamule

I have to work two jobs to pay my own fees so I would back this kind of a set up.

I dont begrudge people getting grants. Everybody is entitled to an opportunity but when you get school leavers picking a course just for the sake of it and leaving one or two years later. Kind of makes you question the system.

Brussels Sprout

Jawgap wrote: »

for example they could 'forgive' loans or reduce repayments if people go into certain jobs or professions - teaching, medicine etc - in Ireland.

I don't think you have to incentivise people to get into teaching at the moment. 4.5 months of holidays a year (secondary) and a decent wage.

Nody

alphamule wrote: »

I dont begrudge people getting grants. Everybody is entitled to an opportunity but when you get school leavers picking a course just for the sake of it and leaving one or two years later. Kind of makes you question the system.

There should only be loans; no grants and make it available for everyone. Fair for the people who're from a poorer background to get a chance to work their way up and for the rich kids they'll blow it in the bar anyway but at least the state get some money back (interest).

Also as noted above using it to steer people towards certain careers (engineering comes to mind for example) is generally positive but I'm hesitent if I'd like the politicans to be involved such a decision (they are not exactly shining examples of competence when it comes to the private work market after all).

alphamule

Our Government are incapable of coming up with an effective idea like this!

OU812

I've been told many times I should run for election

I wonder if it would be possible to be the first person to run for election through online media only (I don't have money for a campaign)

alphamule

OU812 wrote: »

I've been told many times I should run for election

I wonder if it would be possible to be the first person to run for election through online media only (I don't have money for a campaign)

Youd get my vote.

But if you betray us you will certainly sleep with the fishes.

jman0war

You're describing the Federal loan program in the US.
Failure to pay it back and they garnish your wages, for life if need be.

But I suspect that some people (like Joan Burton) would argue that the grant that gets spent in the local, is actually an "economic stimulus" and taking it away would "deflate the economy". If not yer bladder.

Sleepy

Far from a new idea but unfortunately it's far too sensible to be implemented.

OU812

alphamule wrote: »

Youd get my vote.

But if you betray us you will certainly sleep with the fishes.

I have so many suggestions & changes that could be made.

OU812

jman0war wrote: »

You're describing the Federal loan program in the US.
Failure to pay it back and they garnish your wages, for life if need be.

But I suspect that some people (like Joan Burton) would argue that the grant that gets spent in the local, is actually an "economic stimulus" and taking it away would "deflate the economy". If not yer bladder.

Money still goes out to the student in the same way, They can economically stimulate the local economy if they like, it's up to them how it's spent, it's just now the government get it back.

The point is its open to all, rich or poor. The applicant will not be turned down, the applicant pays it back over ten years either through salary deduction or social welfare as its attached to their pps number.

In the event of emigration the loan is left open attached to the pps & interest rate increases (can be paid off from abroad if necessary), in the event of death, the loan is cancelled.

Repayments begin after college ends to alleviate pressure for worrying when supposed to be studying.

Jawgap

Jawgap wrote: »

I think if you get a loan, you're incentivised to pick useful courses and work on them.

No thanks, getting a job shouldn't be the aim of education.

There's also more potential for the state to get some payback - for example they could 'forgive' loans or reduce repayments if people go into certain jobs or professions - teaching, medicine etc - in Ireland.

It works in other countries, why not here?

I think we have way more than enough teachers as is it. When it comes to medicine (apparently) people leave because of the career structure, we train enough people for it as it is.

What do ye think of the Back To Education Allowence? Is it right that people in their 50's and 60's can do degree courses, paid for by the State, who have little or no hope of getting a job? And if they did get lucky, only have limited number of years left in the workforce?

Jawgap

Brussels Sprout wrote: »

I don't think you have to incentivise people to get into teaching at the moment. 4.5 months of holidays a year (secondary) and a decent wage.

In general you don't but I reckon you could encourage better maths teaching by offering to forgive the loans of any computer or maths graduate who spends 3 years teaching at a state school.

Deleted User wrote: »

No thanks, getting a job shouldn't be the aim of education.



I think we have way more than enough teachers as is it. When it comes to medicine (apparently) people leave because of the career structure, we train enough people for it as it is.

You're right it shouldn't be - but if you are being grant aided then morally you are obliged to 'pay' that money back by making a tangible contribution to the society that funded you - the money had to come from somewhere.

If you want education for the sake of education, fund it yourself or find some other benefactor willing to support you.

If loans replaced grants, not only would students be more discerning in their course choices, they'd also demand higher standards from the woeful third level sector in this country.

wexandproud

loan is way to go. i have one just finished a four year course and another going into fourth of a six year course and believe me its been a struggle,and i had to borrow to pay, but thankfully passed for grant this year.
my son who is in ucd used to hate the week following grant payments as it was non stop partying on campus mainly by students on as he described it coures designed to get people into college with only a few lectures a week.. while looking for accomatation he actually came across a thread where students were praising how good some accomadation is for partying.

i would make these points

1 because of the grant system it actually prevents people from third level, loans should be available to everyone grants are not

2 third level students keep going about being young adults and i have no problem with that, having to take a loan and having to repay it would be the first important lesson they get in life and they would appreciate their opertunity far more rather than getting it handed to them

3 i have no problem with students having a jar and enjoying themselvs but not at tax payers expense ,we are paying for enough

4 there should be no forgivness for teachers . they get guaranteed job for life, good salary and good holidays and now, we want to pay for their education aswell... dont think so

mistermouse

Seems to me the country is training and subsidising that training for emigration, quite a lot of our graduates go abroad where other countries gain from the fact they are trained.
A loan scheme would help reduce that issue but there should maybe be some form of reduction for people who set up their own businesses afterwards.

Small business and self employment in this country suffer from neglect and red tape etc. There does on the other hand seem to be no problem in training lots of people for posts that do not exist here.

Many nursing graduates for example end up emigrating. If we do not have the posts here for graduates then we are possibly offering too many places on wrong courses

Its about time the whole issue was looked at and the government evaluated our future needs and funding completely

jman0war

Deleted User wrote: »

What do ye think of the Back To Education Allowence? Is it right that people in their 50's and 60's can do degree courses, paid for by the State, who have little or no hope of getting a job? And if they did get lucky, only have limited number of years left in the workforce?

Back To Education Allowance isn't really designed to get people back into the workforce. If it were, the administrators of that program would be a little more discerning of it's applicants, and what courses qualify.
Some of the Arts courses in particular, are self-indulgent pursuits and have about zero job prospects.

Anyway, the Back to Education Allowance is a way for the Deptment to be seen to be "doing something", creates some more admin posts internally, and provides a useful way to hide the numbers of long term unemployed.

It's also used by universities however to bolster the numbers in redundant courses which help some of them maintain their cushy number, and are then used by the uni to argue for extra funding.

hfallada

All Americans will tell you that student loans are not the way to go. You cripple someone with a vast amount of debt(some end up with over 100k) and they have to take a ****ty job.They dont want to take as it has doing to do with their degree. But they have to make repayments on their loan so they have no choice.

I think the Government should make college fees relate to the actual cost of providing the cost. Eg medicine course is so expensive to provide, therefore the fees should be higher. Also the Government should stop funding BS degrees in Colleges that someone will never get a job with.

Anita Blow

Would be completely against a loan system for third level. It would be akin to the US Federal Loan system which is a complete scandal & a ticking time bomb.
The free fees scheme costs the state just under €1 billion which is a drop in the ocean compared to the dead money that is the €20 billion social welfare budget, & yet it yields massive benefit in terms of attracting very high end jobs to the country with a far greater tax take than a taxpayer without a degree.

I think efficiencies could definitely be made first to help maintain the current system but reduce costs.
As has been said, there is a minority who spend their grant money on drink and a social life which is completely wrong. SUSI should not be paying the grant directly to student's bank accounts, it should go straight to the University.

Also something needs to be done about the number of students receiving the grant. Something like 60% of students are on it. Having only 40% of students paying the student contribution isn't sustainable. At the very least I think there should be different bands of student contribution up to the €3000 max so everybody is making a contribution relative to their means.

LenaClaire

hfallada wrote: »

All Americans will tell you that student loans are not the way to go. You cripple someone with a vast amount of debt(some end up with over 100k) and they have to take a ****ty job.They dont want to take as it has doing to do with their degree. But they have to make repayments on their loan so they have no choice.

I think the Government should make college fees relate to the actual cost of providing the cost. Eg medicine course is so expensive to provide, therefore the fees should be higher. Also the Government should stop funding BS degrees in Colleges that someone will never get a job with.

If the cost of school in America was in line with cost of school here, there would not really be an issue with loan re-payment. For state schools in the US the cost is about 10-15k plus room and board (another 10k) per year. For private schools you are looking at 30-50k per year. It is these high costs that drag you down rather than the loan itself.

Anita Blow

LenaClaire wrote: »

If the cost of school in America was in line with cost of school here, there would not really be an issue with loan re-payment. For state schools in the US the cost is about 10-15k plus room and board (another 10k) per year. For private schools you are looking at 30-50k per year. It is these high costs that drag you down rather than the loan itself.

It is the fact that third level institutions here are publicly funded which is why the cost is far lower. If student loans are introduced here, we will face the exact same runaway tuition costs which will leave whole generations slaves to their student debt, just as is the case in the US.
Tuition fees in the US have increased faster than the rate of inflation and are now over 1100% greater than they were 30 years ago.

In the years between 2003-2008 alone, tuition fees in public universities in the US increased 31% and now today student debt represents over 7% of the average personal income in the US. All of this while over the past 5 years incomes and employment have tumbled due to the financial crisis, while fees & interest rates showed no such fall. So these students now who were in college over the past 5-6 years will now freshly graduate with their massive student debt with little to none of the expected incomes/employment when they entered third level education.

Not to mention that just last month the US Government doubled the interest rate they charge on student loans from 3.4% to 6.8%.

A student loan system is absolutely not the way to go, as the US has demonstrated. Meanwhile nearly every EU country except the UK manages just fine with publicly funded third level education.

LenaClaire

Anita Blow wrote: »

It is the fact that third level institutions here are publicly funded which is why the cost is far lower. If student loans are introduced here, we will face the exact same runaway tuition costs which will leave whole generations slaves to their student debt, just as is the case in the US.
Tuition fees in the US have increased faster than the rate of inflation and are now over 1100% greater than they were 30 years ago.

In the years between 2003-2008 alone, tuition fees in public universities in the US increased 31% and now today student debt represents over 7% of the average personal income in the US. All of this while over the past 5 years incomes and employment have tumbled due to the financial crisis, while fees & interest rates showed no such fall. So these students now who were in college over the past 5-6 years will now freshly graduate with their massive student debt with little to none of the expected incomes/employment when they entered third level education.

Not to mention that just last month the US Government doubled the interest rate they charge on student loans from 3.4% to 6.8%.

A student loan system is absolutely not the way to go, as the US has demonstrated. Meanwhile nearly every EU country except the UK manages just fine with publicly funded third level education.

I thought that this thread was just about all of the current ancillary costs of education, not completely removing all public funding. I was just stating that loans to cover all the ancillary costs, with a reasonable locked in interest rate would probably beneficial to most students.

I agree, public funding of higher education keeps the fees manageable and out of the escalating cost spiral that the US is in. I would have loved it if the US had school costs as managed as they are here.

Unfortunately, part of the problem is that a lot of young people simply do not realize how large these loans will be when the graduate. There are a lot of grants and scholarships available in the US, if your school has a good guidance counselor it can save you a lot of money in the long run. But, that requires you to be going to a "good" high school that can afford a really good guidance team.

Anita Blow

LenaClaire wrote: »

I thought that this thread was just about all of the current ancillary costs of education, not completely removing all public funding. I was just stating that loans to cover all the ancillary costs, with a reasonable locked in interest rate would probably beneficial to most students.

I agree, public funding of higher education keeps the fees manageable and out of the escalating cost spiral that the US is in. I would have loved it if the US had school costs as managed as they are here.

Unfortunately, part of the problem is that a lot of young people simply do not realize how large these loans will be when the graduate. There are a lot of grants and scholarships available in the US, if your school has a good guidance counselor it can save you a lot of money in the long run. But, that requires you to be going to a "good" high school that can afford a really good guidance team.

Apologies if it came across as a rant against you! I just went off on a bit of a tangent

I feel if the government brings in any loan system to replace a grant system then a US-style setup is inevitable. That is why I'd be completely opposed to any of the already proposed changes in the current setup which necessarily involve lumping our children with thousands upon thousands of debt before they even get a chance to join the workforce.

Wee Ollie

jman0war wrote: »

Anyway, the Back to Education Allowance is a way for the Deptment to be seen to be "doing something", creates some more admin posts internally, and provides a useful way to hide the numbers of long term unemployed.

It's also used by universities however to bolster the numbers in redundant courses which help some of them maintain their cushy number, and are then used by the uni to argue for extra funding.

That sort off generalisation is a load of bollix.

I've just completed a degree course in Applied Computing as a mature student with BTEA; there were a number of students on the course in the same position and every one of them except myself was intent on getting a job.

I wasn't really interested in getting back into employment, mainly due to my age (62) and health problems I have but I'm now about to undertake a research Masters which could possibly lead to a very nice contribution to the Irish government's coffers.

JohnMearsheimer

I would lean towards a student loan system over a grant system. If students knew they were liable to pay back the cost of their education I think it would cut out a lot of 18/19 year olds dashing off to third level straight away just for the sake of it. Thinking back to my own college days there were loads of people that shouldn't have been there doing what they were doing (myself included if I'm being honest but I didn't know it at the time).

We had a few guys on our course that hated it, coasted for 4 years and ended up with pass degrees. They were wasting their time. The cost to the state was about €16,000 each in fees plus whatever extra per year if they were in receipt of maintenance grants. If they had to pay for their education I would hope they would have put more thought into what they wanted to do and put in the work when they eventually figured out what they wanted to do.

I did my masters in the UK. Everyone from the UK on the course had at least £20,000 student debt. I don't remember anyone complaining about it. All the UK students were very focussed and dedicated in what they were doing. The UK system seemed fairer to me in a financial sense. Financially speaking, anyone that wanted to go to college could go. From my experience a lot of people in the UK leave home to study as the government through some awarding authority will loan tuition fees and maintenance grants to students and off they go. I didn't qualify for a grant when I was in college. Even though my parents income was above the income threshold to qualify for the grant they still wouldn't have been able to afford to send me to Dublin or anywhere else for that matter. If I wanted to do a course that was only available outside Cork it was a case of tough luck.

When I studied in the UK I had no financial assistance in the form of a grant or a loan. I missed practically the whole of the second year of my masters because I was working fulltime to pay my tuition fees, rent and living expenses. A loan facility of some kind would have been much appreciated.

p1akuw47h5r3it

Nody wrote: »

There should only be loans; no grants and make it available for everyone. Fair for the people who're from a poorer background to get a chance to work their way up and for the rich kids they'll blow it in the bar anyway but at least the state get some money back (interest).

Also as noted above using it to steer people towards certain careers (engineering comes to mind for example) is generally positive but I'm hesitent if I'd like the politicans to be involved such a decision (they are not exactly shining examples of competence when it comes to the private work market after all).

I'd be against it being used to steer people into certain careers. people should go into certain careers because they want to not because the government is telling them to.

Also I don't necessarily have a problem with grants (although I would prefer a loan system also), although the system needs a complete overhaul and the threshold for obtaining a grant increased. Too many people receive grants who don't need them. We've all heard the stories. I think something like 60% of students receive grants which is ridiculous. The only problem with a loan system is that it would disadvantage people from rural areas as city folk are more likely to live near a University and thus live at home.

Universities are hemorrhaging money and need more funding. It's students who should pay for this increased funding through a loan system. I also believe it's unfair for other people to pay for somebodies degree. University is not a right, but I guess that is an argument for another day.

p1akuw47h5r3it

Anita Blow wrote: »

Would be completely against a loan system for third level. It would be akin to the US Federal Loan system which is a complete scandal & a ticking time bomb.
The free fees scheme costs the state just under €1 billion which is a drop in the ocean compared to the dead money that is the €20 billion social welfare budget, & yet it yields massive benefit in terms of attracting very high end jobs to the country with a far greater tax take than a taxpayer without a degree.

I think efficiencies could definitely be made first to help maintain the current system but reduce costs.
As has been said, there is a minority who spend their grant money on drink and a social life which is completely wrong. SUSI should not be paying the grant directly to student's bank accounts, it should go straight to the University.

It's 1.2 billion. See the last line in this article: http://www.independent.ie/lifestyle/education/70000-students-face-cut-in-college-grant-26793259.html

Also with regards the US. It is only the very very top Universities (Ivy League) that cost up to 100,000 etc. They don't all cost that much!

LenaClaire

DanDan6592 wrote: »

Also with regards the US. It is only the very very top Universities (Ivy League) that cost up to 100,000 etc. They don't all cost that much!

State Universities cost about 20-25k per year (with room and board) so over 4 years that comes to 80-100k, if you don't get any scholarships or grants.

A good amount of Private Universities run about 30-50k per year, so you can end up at 200k over four years.

Harvard and such can run up to 60 k per year but tend to offer scholarships for a fair amount of it.

Then if you talk about grad school you can be looking at another 20-40k per year for 2 years.