Income-contingent student loans, which is the amount a student earns determines how much they pay back may be popular in the U.S. and the U.K., but for residents of Donegal, a town in the Republic of Ireland, it may not become a reality if Donegal Deputy Thomas Pringle has his way.
According to the Donegal Democrat newspaper, Pringle recently raised concerns about recommendations in a recent report investigating ways to increase investments in the third level education sector. One of those recommendations is income-contingent student loans.
Pringle said he was worried about the idea of income-contingent student loans because ultimately they don’t end up getting paid back. The lawmaker pointed to studies that show the programs in the U.S. and U.K. have resulted in increased rates of non-payment among borrowers. He explained that income contingent student loans have led to non-payments of £86 billion pounds in the U.K., £12 billion of which accumulated in 2016 alone.
“Clearly, this model is unsustainable,” he was quoted as saying in the report.
Pringle didn’t dispute that investment is needed in higher education in Ireland, but noted that he is also against funding coming from fees. In fact, the deputy said fees should be removed altogether and that increased investment should be derived from taxes. Pringle noted that existing fees already prevent many students from attending college, particularly ones living in rural areas. After all rural residents not only have to contend with the fees but they often have to move closer to the college or universities and pay rent as well.
Deputy Pringle noted that Donegal should make education accessible to all of its citizens and that it should be a right for everyone. “This is the only way we can help reduce social inequalities in our society,” he explained, according to the report.
While Pringle may be against income-driven repayment plans, in the U.S. it is very popular among borrowers. According to the Department of Education, since 2013 enrollment in the government’s income-driven repayment plans has increased 140 percent with Direct Loan borrowers. What’s more, the Department of Education thinks it’s actually resulting in less late payments and defaults – not increasing these rates as Pringle predicted for his own country.
Author: Dave Rathmanner
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