Proposals to introduce income-contingent student loans, being discussed today by the Oireachtas education committee, will widen the already significant gulf between high- and low-income graduates, according to the Workers’ Party.
Cllr. Eilis Ryan (Workers’ Party) strongly refuted claims by the scheme’s proponents that income-contingent loans represented a ‘more equitable’ system, saying:
It is perfectly clear that the scheme under discussion enables high-income graduates to repay loans in a very short amount of time, while lower-income graduates might struggle to repay the loan for decades.
This means that lower-income graduates will be burdened with far greater total interest repayments, as well as having a debt burden which prevents them from borrowing for other reasons for years after they graduate.
Cllr. Ryan said that claims that the system was ‘cheaper’ only apply to the state, but that the overall cost would not decrease.
The proposed system simply transfers funding for a public service away from the overall revenue pot – which is funded through highly equitable income tax receipts – and onto the shoulders of students and graduates.
High earners pay more in income tax – as they should. This is the fairest way to ensure those who can afford to pay more for public services do so. If we are concerned that those who benefit most financially from third level education should repay the state, lets introduce a millionaire’s tax or a wealth tax, or let’s close the tax loopholes that allow the state’s highest earners to pay less tax than those on middle incomes.