Fine Gael will pledge to introduce a student loan scheme for third-level education if the party is returned to government. A draft of its education manifesto states that a scheme would ensure college is free at the point of access and that graduates would begin to pay back tuition fees once their income reaches a certain level.

The Government would remain the main funder of third-level education, as is the case in Australia, which first introduced an income-contingent loan scheme 20 years ago.

Despite the introduction of “free fees” two decades ago, a student registration fee has climbed to €3,000 a year. The party’s pledge to introduce a student loan scheme comes as an expert group finalises its report on the future funding of higher education. The group is expected to submit its report immediately after the election and ahead of the drawing-up of a programme for government.

A leaked draft of the expert group report late last year laid out a number of options, but leaned most heavily on an income-contingent loan system. It said this approach, together with higher contributions from the State and employers, would raise an additional €1 billion a year. By keeping tuition fees at affordable levels, it said graduates could face payments of about €25 a week over a 10- to 15-year period.

After seven years of spending cuts, increases in student fees and rising student numbers, senior figures in higher education say the sector is under acute pressure and needs urgent additional funding.

Fine Gael’s plan for a student loan marks a subtle shift away from plans for a “graduate tax” it advocated in the run-up to the 2011 election. This proposal involved students contributing about a third of the cost of their course after entering employment and reaching a defined income threshold. Labour at the time was opposed to a graduate tax for students in the same election and, in effect, put the issue on hold by setting up the expert group.

The leaked draft of the expert group report explored three main options – a free model of higher education, similar to systems in Denmark, Scotland and Norway, maintaining the current system and a hybrid model of income-contingent loans for students, along with contributions from the State and employers.

Under a free Scandinavian model, the report noted that these countries had some of the highest levels of investment per student in the world. If adapted to Ireland, it would require additional State investment of about €1.5 billion a year by 2030.

The draft report states that this would require significant changes to the level and share of total tax revenue. “The expert group believes that, as such, this funding strategy is unlikely to be implementable in an Irish context,” it stated.

Under the second option – keeping the current system in place – the report says the State would have to pay an additional €1.1 billion by 2030. This would be due mainly to projected increases in student numbers.

The manifesto will also pledge to:

Ensure new schools are multidenominational in ethos to help widen the choice available to children;

Protect the status of existing denominational schools;

Reduce the pupil-teacher ratio at both primary and post-primary;

Introduce a greater focus on entrepreneurial skills within the education system;

Allow for greater autonomy of school boards of management