The forthcoming OECD review of higher education will report that Irish colleges face a "funding crisis", unless new sources of revenue are found.
In a recommendation which is set to re-open the debate on the third-level fees and student loans, the review is expected to highlight the full scale of the budget crisis facing Irish colleges.
Education sources say that the report will also herald major changes in the workings of the Higher Education Authority (HEA) which manages the seven universities. The Paris-based OECD review team, led by its head of education, Mr Abrar Hasan, is now completing its report.
A final draft will be considered by the OECD review team and the Minister for Education, Mr Dempsey, and his senior officials at a meeting in Dublin on September 15th next. It is understood that college heads and other interested parties will be briefed the following day.
The OECD report, commissioned by Mr Dempsey, is the most comprehensive review of the third-level sector in a generation. The report is expected to propose:
Much greater freedom for the institutes of technology sector, (IOTs) currently managed by the Department of Education.
The retention of the current two-tier higher education system with universities and IOTs.
New structures to ensure a more "policy driven" approach by the Department of Education in the third-level sector.
The need for a clear mission statement for the IOTs.
New moves to make the third-level sector less dependent on the Exchequer, including closer links with business and industry.
On fees, one source said: "The review will re-open the whole issue of fees and how the colleges are funded. It will be saying that better-off students will have to contribute in some way."
Mr Dempsey has said that the return of fees is off the agenda for the "foreseeable future".
However, the Government is under intense pressure to provide some alternative source of funding for the colleges, which are struggling to cope with an effective 10 per cent cut in funding this year.
The report will recommend that the Department of Education should lose day-to-day control of the IOTs. Under the new proposed structure, the Department would focus solely on overall policy issues in the third-level sector.
The report is set to propose that day-to-day control of the IOTs should come under the ambit of the HEA, or even a new executive agency for the third-level sector.
It is understood that the Department of Education and Science has given the Paris-based OECD group an assurance that the report will not be amended or changed before publication.
The OECD report was commissioned by Mr Dempsey last year. The Minister had been forced to abandon his plan to reintroduce fees of up to €6,000 per year.
However, in an economic review published last year, the OECD pointed to the general international trend where students are asked to pay fees. Ireland is "exceptional", it said, in having eliminated fees for undergraduates.
The OECD economic review also made a strong case for Australian-style "study now, pay later" student loans. In its review, the OECD said the current "subsidisation of third-level is questionable on both equity and efficiency grounds."
