The Union of Students in Ireland has warned that Minister for Education & Skills Ruairi Quinn is creating a two-tiered education system with the introduction of a government-backed postgraduate loan scheme. The loan scheme, a partnership project between the government and Bank of Ireland, will only be available to students with a good credit history.
USI President John Logue said:
“Last year, Minister Quinn made it all but impossible for thousands of Irish students to attain a postgraduate qualification when he removed the postgraduate maintenance grant. Now, the Minister announces this scheme as if it were an adequate substitute for government grants, but this is patently a scheme that will only help students who are already in a comfortable financial state. Any students with a poor credit history, those who have the most acute need for a maintenance grant, will be denied a loan and thus denied the opoortunity to study at a postgraduate level.
The Minister and his party, once ideologically aligned with those who see higher level education as a societal and economic good that should be accessible to all, are inviting private banks with profit-driven motives into our higher education system, where they will promote increasing student debt to unprecedented levels.
USI calls on the Minister and the Labour Party to remember their roots, their founding principles and the vision they once had for education.”
This development is particularly worrying as the government scrapped financial assistance for postgraduate students late last year.
According to Bank of Ireland, the loan scheme will cover the full cost of course fees, less any grant received towards fees. It will be paid directly to the College and allows for reduced payments while studying. The loan will be in the student’s own name. Repayments will be interest-only for the period of study and an additional 3 months thereafter, at which point repayments will be capital and interest at 10.8% APR variable. The repayment period can be up to 5 years. A maintenance loan of up to €2,000 is available to those students who have previously received a maintenance grant as an undergraduate. The maintenance loan will be paid directly to the student.
A key point to note in this scheme is that the credit history of parents has no bearing on the success of the application, it is decided entirely on the credit history of the student. USI believes that this stipulation will lead to applications being refused in their thousands, as students frequently make use of overdraft facilities or are still struggling with loans that saw them through their undergraduate degree.