Both major political parties are committed to maintaining the stipend system, despite warnings from experts over sustainability. Christian Peregin puts questions to some protagonists to see whether a sensible discussion is possible.

Malta will this year spend more than €23 million on giving post-secondary students an €80 monthly stipend. By 2020, the figure is likely to exceed €30 million as the student population rises in line with EU targets.

Between 2000 and 2010 Malta registered the largest drop in early school leavers in the EU

This is not an enormous figure considering Malta will this year also spend €64 million on “medicines and surgical materials” – just a fraction of the total spend on healthcare.

Yet those who question the sustainability of free healthcare also raise questions about stipends.

Some, like Rector Juanito Camilleri, argue that the money can be put to better use rather than spreading it so thinly among all students, many of whom can already afford cars and other luxuries.

Stipends make up a fifth of the total government spend on post-secondary education, which means investing the money in resources and infrastructure could see a much-needed upgrade of 20 per cent.

However, discussing the subject remains taboo, especially among politicians who witnessed the student uproar in 1997 when a Labour government turned stipends into optional loans, except for social cases.

The Nationalist Party gained student support at the time, giving subsequent governments the clout to restructure stipends in 2005 without ruffling students’ feathers.

The government says stipends are an “important incentive” for students to further their studies.

The evidence, according to the Finance Ministry, is that 1998 was the only scholastic year which registered a drop in the growth rate of tertiary student population. On the other hand, the population increased steadily after 1999, with a 30 per cent increase in 17-year-olds choosing to further their studies.

The Finance Ministry said that between 2000 and 2010 Malta registered the largest drop in early school leavers in the EU.

But does this necessarily mean Malta is doing better than other countries? The island still has the highest percentage of early school leavers at 37 per cent compared with the EU average of 14 per cent.

The stipend system is one of the ways the government plans to cut this figure to 29 per cent by 2020, while increasing the share of 30 to 34 year olds having completed tertiary education to 33 per cent.

According to European Student Union representative Karl Agius, there are six other countries which give the majority of their students financial support: Denmark, Finland, Sweden, Scotland, Liechtenstein and Norway.

“This has been called a Northern European Model or a Nordic Model which shows the understanding of the importance and value of higher education and willingness to invest heavily in student support,” he said.

When asked whether stipends were sustainable, the Finance Ministry would only say that they should be seen as “a positive sign that more students are opting to enrol in post-secondary education.

“Access to education should be universal and stipends help to ensure that students pursue their studies.  Where students have financial difficulties, they are provided with a supplementary allowance to encourage them to continue with their studies in spite of their financial background.”

Meanwhile, the Labour Party is making it clear its stand on stipends has changed since 1997. Leader Joseph Muscat says he is a product of the system and truly believes in its benefits. He also promised to “strengthen” stipends once in power, without saying how.

Newly recruited Labour candidate Deborah Schembri was involved in the ‘hands off our education’ campaign. Her target at the time was former Education Minister Evarist Bartolo, who partnered with her in the pro-divorce campaign last year. Mr Bartolo remains an integral part of the party, but is also keen to live down his past as Education Minister.

His response to a series of questions by The Sunday Times was curt.

“The PN is making education a political football. This is a non-issue as the Labour Party has no plans to change the present stipends system or reduce the stipends given to students in Malta and Gozo,” he said.

Dr Schembri, on the other hand, recalled the protest when students walked from University to the President’s palace.

“We timed it so we would block traffic at the worst time to get everybody talking. We wanted to drive the point home we weren’t going to let anyone mess with our education. It was a huge success and we got what we wanted.”

Turning stipends into loans was not a good idea then and is not a good idea now, she said, because the money covers the “bare necessities” of student life.

Even if stipends do not attract students to education, they serve to not discourage them, Dr Schembri argued, adding that she may not have been able to conclude her studies without the grant.

So how does she reconcile joining a party with such a history related to stipends?

“The Labour Party now has a clear policy in favour of the stipend system, of which Dr Muscat, like me, was a product.”

What about all the experts insisting the system is unsustainable?

“Sustainability has to be seen in light of the bigger picture,” she argues, saying observers sometimes err by seeing stipends in isolation, instead of as part of a wider strategy of wealth creation and minimising poverty. Ensuring sustainability is not easy, she conceded, but neither is it impossible.

But in a government headed by Dr Muscat, the person most likely to be placed in charge of the country’s finances is economist and MEP Edward Scicluna.

He said Labour had made a public and solemn commitment not to reduce stipends from their current level. Education had enormous economic beneficial externalities on society and should be maintained even after EU targets were reached, he argued.

But what about sustainability?

“Sustainability may mean different things to different people,” he said, pointing out that various government appointees like the Rector and the former Central Bank Governor had seen stipends as public expenditure which can be used more productively.

“The reality is that despite our stipends system, our participation rate in tertiary education is still half the median rate (40 per cent) in the EU... If we are losing 37 per cent of secondary students on their way to their getting a proper school-leaving certificate, and many others are not getting past their first year in tertiary education, we should realise there are problems elsewhere.”

Prof. Scicluna said the Education Minister recently pointed out that some changes could be made to the system this year and Labour was interested in seeing the proposals.

“A society that wants to be transparent and informed should encourage and not shun a healthy debate on any aspect of public policy,” he added.

But Emanuel Delia, who was at the forefront of the pro-stipends protests in 1998 and intends to stand as a PN candidate, does not believe Labour’s claims.

“They had made exactly the same promise in 1996, only to break it in 1997,” he said.

He pointed out that the Labour government ignored the students until a pro-education government led by the Nationalists abolished the “hare-brained” scheme.

“(Labour) choked education in the 1970s and 1980s and did it again in the 1990s... Given another chance Labour will not only vote against higher education – which it does from the opposition benches – it will move to throttle it,” he said.

Fifteen years after Labour’s daringly unpopular move, it seems the scars are still visible.

But while radical changes to the system will always provoke anger from students, politicians may eventually be forced to engage in alevel-headed debate. When that time comes is anyone’s guess.

Rector Juanito Camilleri tells Christian Peregin it is a mistake to view the expenditure on stipends as part of the investment in education

Labour leader Joseph Muscat recently said having a Rector who disagrees with the government on whether stipends are sustainable shows a lack of strategic direction. How do you respond?

To date, we have somehow strived to strike a balance of sorts, but the funds required to sustain the required growth and leap in quality are staggering

It is the government’s prerogative to determine the policy on stipends. One hopes the Rector is entitled to a personal opinion like everyone else, even if that opinion may not be in total conformity with government policy.

My position on stipends is simple. Higher education should be accessible to all local students with the necessary qualifications, so a student should not be denied access because he cannot afford it. I am a strong advocate of stipends or other financial assistance, but only for those who deserve it and would otherwise not be able to afford higher education.

So who should determine who needs financial assistance?

I think means testing is not a practical option, so I would place the onus on students to choose to take the stipends upfront or if they feel they do not really need it, to donate it to the University Trust Fund to be invested directly in their education.

Those who are in a position to donate their stipend should have the right to get the value of their stipend as tax rebates once they find a job.

That sounds idealistic.

Yes, but every change in culture must start somewhere. I subscribe to the ‘only take it if you really need it’ philosophy and this should not only apply to stipends. I am against a culture of granting stipends by default, without making the beneficiaries seriously consider whether they genuinely need such a benefit.

Are stipends unsustainable?

It is not up to me to decide whether stipends are sustainable in their current form or not. This depends on the resources in hand and the social and economic priorities of the government of the day.

But one needs to keep in mind that the cost of building and maintaining world-class higher and tertiary education institutions will continue to grow.

To achieve both counts the investment must not only be sustained, it must continue to be significantly increased. I feel that all options on how best to strike the balance between accessibility and quality should be studied seriously – and not just brought up as a controversy in an election frenzy.

The political class seems to be extremely reluctant to engage in a critical discussion on the sustainability of stipends. How do you feel about this?

I feel politicians can easily paint themselves and each other into undesirable corners when discussing such topics so close to an election. My fear is that unless a serious critical discussion takes place, ideally driven by the student community itself, the country will overlook certain options or embark on important initiatives too late.

Are stipends achieving their purpose of attracting students into post-secondary education? Is there any evidence to support this?

There is no doubt in my mind that the stipend system has made it possible for some students, who would have otherwise been unable to afford it, to access higher or tertiary education. The stipend system helped stimulate the growth of student numbers, particularly in the years following its introduction.

But the economic value of the stipend in real terms is gradually being eroded and in time the value of the individual stipend may fall short of what is required by students who are really in need.

So, for as long as stipends are distributed to one and all, irrespective of need, we run the risk of betraying the very principle we are striving to preserve: access to higher and tertiary education irrespective of financial means.

By spreading the investment thinly and treating those in need like those who can do without, we may find ourselves investing millions without achieving the equity we value.

Do you think the government spends a disproportionate amount of money on stipends compared with what it spends on non-stipend-related post-secondary education?

It is a mistake to view the expenditure on stipends as part of the investment in education. The stipend may help bring more students to lecture rooms, but not contribute to the quality of education they receive. If we deduct the increasing amount of stipend money from what should be invested in education, in the long-term we are merely creating a recipe for dishing out mediocrity for free. How does free mediocre education help us achieve our social and economic aspirations?

Can the country afford to retain a stipend system on the lines we have today over and above the level of investment we are meant to be spending on quality education?

To date, we have somehow strived to strike a balance of sorts, but the funds required to sustain the required growth and leap in quality are staggering. If we want to measure up with the best then we should not do this simplistically. We must take a balanced view of what resources we invest on one hand and what results we obtain on the other.

That is why this is a time for sober consideration of all options that sustain the right balance between equitable access on one hand, and excellence on the other.