BANK OF Ireland’s new postgraduate loan scheme will increase educational inequities in the Republic by making it more difficult for disadvantaged students to cover the cost of their studies, it has been warned.
The bank’s loan scheme, which has been developed in conjunction with the Department of Education and Skills and the National Treasury Management Agency, was welcomed by Minister for Education Ruairí Quinn, but the Union of Students in Ireland (USI) has warned that it will make it harder for many people to access postgraduate studies.
“We are creating a two-tiered system whereby those with a decent credit history or with decent financial means can access postgrad education but if you do not have that decent credit history, goodbye,” USI president John Logue warned.
He said the Government was trying to use the loans as a replacement for a postgraduate grant system which was largely scrapped in the last budget.
The new loan initiative is the latest in a series of moves by Bank of Ireland aimed at targeting the student loans market at both undergraduate and postgraduate level.
Last month, the bank agreed deals with more than 15 institutions for a loan scheme covering registration fees for undergraduates, which will see loans taken out by the parents of students and paid directly to universities.
The postgraduate loans scheme will also be paid directly to the universities but will be taken out by the students.
The loans will cover the full cost of course fees, and an additional maintenance loan. They may also be available to those who received a maintenance grant as an undergraduate. The maintenance loan will be up to €2,000.
Repayments will be interest-only for the period of study and 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.
The latest figures, for September 2011, show that over 22,000 students were registered for postgraduate courses in that year.
“I warmly welcome this initiative from Bank of Ireland to help postgraduate students access the finance they need to pursue their further studies,” Mr Quinn said “Officials in my department have worked closely with the bank and the NTMA on this loan scheme which I hope will mean that students who were concerned about meeting the costs of postgraduate studies will now be able to access these loans.”
Bank of Ireland’s chief executive Richie Boucher said the bank had “an absolute focus on deploying its capital, funding and resources to ensure that it is the leading bank in Ireland. A critical part of this is anticipating our customers’ needs and coming up with solutions to meet those needs which work for our customers and work for us.”
He claimed the loan would “provide vital funding to the current and future generations of Ireland’s postgraduate students”.
