The introduction of a student loan scheme is now very likely in the wake of the OECD review on the third-level sector, according to senior education sources.
Yesterday, the Paris-based OECD confirmed an Irish Times report that it has backed the return of colleges fees.
But the Minister for Education and Science, Mr Dempsey has said that fees are off the political agenda for the foreseeable future.
The OECD report, due to be issued next week, highlights the funding crisis in third-level colleges which it says undermines the Government's ambition of creating a leading knowledge-based economy. With fees opposed by both government and opposition, education sources say attention will focus on an Australian-style student loan scheme. Under the scheme students repay the cost of their college education with the payment linked to their income after graduation.
It is understood the OECD report, the most comprehensive review of third-level education in a generation, says the abolition of fees has failed to widen access to college. It points out that one-fifth of those in third-level come from homes where the main income exceeds €70,000 per year.
Yesterday, Mr Abrar Hasan, the head of the OECD review team, told The Irish Times that the review laid out the various options which would help the Irish third-level system widen access and generate more funds.
He said the third-level sector needed to generate more funds if the ambitions set for it were to be realised. These included systems such as a loan scheme and a system of deferred payments.
One senior education source said yesterday that a new student loan system or some other system was now "inevitable" in the context of the OECD review. In recent years several OECD states, including Britain, Australia, New Zealand and Germany, have all introduced fees or other systems to generate funding for third-level.
The introduction of a loan scheme was actively considered by Mr Dempsey as part of his plan to bring back fees last year. But this was abandoned when the fee initiative failed to muster support from his Cabinet colleagues.
The Australian government claims that its loan system has helped to widen access for poorer students by up to 40 per cent.
The OECD said yesterday its report "will also recommend a significantly reformed, means-tested student support scheme and a student grant scheme to assist low-income and other special-needs students".
In a statement, the OECD said the Irish third-level system was "now at a crossroads. . . the report says that Ireland cannot develop a globally-competitive tertiary education system and research capability without high levels of investment in tertiary education, but concludes that this investment will not be possible without some private contribution from students, through fees or other means."
The statement continues: "The report stresses the importance of maintaining high levels of investment in third-level education. . . but the education budget is under severe pressure. . . the economic and fiscal realities facing Ireland mean that relying on state funding alone will be insufficient."
