Mixed reactions to new student schemes

Bank of Ireland announced two schemes this week to help combat financial problems in undergraduate and postgraduate studies.

However, the bank’s postgraduate loan scheme has come in for criticism for the method it is judging loan approvals, with the Union of Students in Ireland heralding it as the introduction of “two-tiered education".

Under the new scheme, the loan will cover the full cost of course fees, less any grant received towards fees. It will be paid directly to the college or institute, and allows reduced payments while studying, and is in the student’s own name.

Repayments will be interest-only for the period of study and an additional three months thereafter, at which point repayments will be capital and interest at 10.8 per cent APR variable. The repayment period can be up to five years, depending on what best suits the student. 

In addition, 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.

The scheme was described by Cork Sinn Féin Councillor Mick Nugent as “alarming”.

“The scheme represent a serious and alarming step backwards for high level education in this country,” said Cllr Nugent.

“The Government are using the economic crisis to enforce a right-wing perspective on the funding of education and social infrastructure. Since the coalition came to power it has systemically attempted to remove the idea of education as a right from the Irish psyche.”

“The initiative lacks any real vision and will only really benefit students who are already on a sound financial footing. It penalises those who are less well off and as such will go some way to creating an inequitable, elitist dynamic at the higher tier of education and research by restricting opportunity of access for those with limited financial capacity. I can't see how this is conducive to building the knowledge-economy is so widely talked about in government circles.” 

However a scheme announced by University College Cork and Bank of Ireland on new low rate loans for undergraduates, was welcomed as a means to cover the cost of the Student Contribution Charge.

The loan is available to parents or guardians of undergraduate students over a period of up to eight years. 

“The university recognises the payment of the Student Contribution Charge can be a challenge for many families and is delighted that with the support of Bank of Ireland, this scheme will help ease the financial burden,” said Professor Caroline Fennell, Deputy President, UCC.

“This new low-rate loan aims to ease the burden of payment of the student contribution charge by allowing parents or guardians to spread the cost of the charge with payments of just €100 per month for the duration of study at a rate of 5.1 per cent APR.”

The loan is available to cover the full cost of the Student Contribution Charge for the undergraduate course, with approval for the full cost of the study period delivered up-front. Payments are made annually to the University directly from Bank of Ireland. Currently the charge is €2,250 per annum, therefore for a four-year undergraduate course the parent or guardian can apply to borrow up to a maximum of €9,000.

Dave Carey, Welfare Officer, Vice-President, Students Union welcomed the initiative saying, “any new scheme that helps parents support their child's university education is to be welcomed and we will work closely with the University and Bank of Ireland on campus to promote this scheme as an option.”