Could students pay their way through university with a graduate tax?
I hear that, behind the scenes, the Coalition is giving serious thought to going for a graduate tax rather than going ahead with raising tuition fees. Lord Browne reports on university funding this autumn and has been widely reported to be thinking of calling for the £3,225 per year tuition fees cap to be raised.
Lib Dem leaders had enough trouble getting their party to swallow a postponement of the abolition of tuition fees in the manifesto (it ended up put off to what some thought was a fairly meaningless distant horizon). The last thing they want to do is find themselves defending a giant hike in tuition fees.
The coalition agreement gave Lib Dem MPs an opt-out allowing them to abstain if they can’t accept the government response to Lord Browne.
So in the interests of both coalition parties, but particularly the Lib Dems, the government is looking seriously at switching to a graduate tax. Four out of the five Labour leadership candidates are talking about a similar shift, so there would be political cover of some kind. Even the National Union of Students has been sniffing round its own preferred version of a graduate tax.
The universities will worry that the proceeds won’t be ring-fenced and could end up being siphoned off for other Whitehall projects. To that end, government is looking at the possibility that a body along the lines of the existing Student Loans Company would be allowed to levy the tax. That way, the proceeds could be funnelled to the hard-pressed HE sector.
The Treasury will worry about where the money comes from while HE funding bridges from one system to another, though I’m told by a Whitehall figure that the Treasury doesn’t regard this as an “insuperable problem.”
One other point. Lord Browne himself may not necessarily go down the route of asking for a lifting of the cap. His remit was much wider than that. He’s met ministers for bi-laterals. He won’t be unaware of the new tilt in government thinking towards a graduate tax.
It’s not a giant philosophical leap between the two concepts, more, as one former education minister put it, “a question of branding.”
There are 8 comments on this post
I have twin daughters, both graduated with £12000 SLA debt including £2800 of interest, both had a postgraduate course as well (MA), both without job, from time to time doing no paid internship. No unemployment benefit , no other help at all. Without prospect of living without parents support. Do we need to get youth into bigger debts? Willets misleading information to the public od funding the Univesities is not true. 85% od students are outside EU paying minimu £9500 a year. Stop the continuity with the labour lies. Do something positive.
Years ago it was proposed that our scarce graduates who left for jobs abroad should re-pay some of their study costs. But it was not feasible to collect taxes from people who live abroad.
I suspect that a graduate tax will go the same way: how could it be levied on graduates who’re working outside the jurisdiction of HMRC? Debt doesn’t sound as neat as a tax, but it can be pursued in most countries.
Graduate tax is the best option. But EU citizens should have to pay tuition fees, otherwise they’ll conveniently disappear once they’ve graduated.
EU Students DO have to pay fees in England and Wales, and dont get much help paying for them, often having to pay up front. They don’t pay fees in Scotland, but that’s because the Scottish Govt pay them.
This is true Stiofan, but the Scottish Government shouldn’t pay them for EU students- especially as they won’t pay them for other British students!
[...] been interested this morning to see that the government is giving serious thought to introducing a Graduate Tax, rather than raising Tuition [...]
It’s about time the graduate myth was exploded. 20 years ago, only 15% of the population achieved degrees. Employers were interested in this educated elite.
Now it’s more like half, degrees are two-a-penny, and employers don’t care. Many degrees are regarded as worthless – not by the state – but by employers, which is the ONLY view that matters.
The true outcome is debt-saddled, blighted lives with little or no improvement in chances in the job market. Many people would be better off training for professional trades as carpenters, electricians, plumbers, builders and engineers.
Its sick that any note of dissent is immediately given the reply ‘don’t put the achievements of young people down’. By and large this comes from the perpetrators of this evil con who are lining their pockets by stealing from the young.
Far, far, far too much emphasis is placed on the need for ‘knowledge workers’, and nothing like enough on the engineering skills required to rebuild a ‘making’ economy.
Any graduate tax must be back dated so that all those who were lucky enough to have received a free university education contribute.
Of couse none of this would be necessary if we had a progressive income tax system with no loopeholes so that those who earned most, contributed most.