A graduate tax rather than tuition fees?

Tuition fees have been a major bug bear for the National Union of Students since they came into existence in 1997. It's latest proposal is for university graduates to pay a set amount of money that would go into a trust that would be used to help fund universities. But is this idea a much needed alternative for students going into debt or yet another misguided attempt to resurrect a dead and impossible dream.

A graduate tax rather than tuition fees?

Yes because... No because...

Would give universities possibly more than they get from funding and being more sustainable

A graduate tax would potentially give universities more than they get from funding, as a contribution would depend directly on a persons salary rather than just being a flat rate fare for services rendered over a short time. For example a person earning £40,000 would pay £125 per month. That over 20 years could amount to £30,000 more than enough to pay for. [[Shepard Jessica "Student leaders call for graduate tax to replace tuition fees:Graduates would contribute to a national tax out of their monthly salary over a twenty year period" Guardian Unlimited http://www.guardian.co.uk/education/2009/jun/10/nus-tuition-fees-graduate-tax Accessed 10.06.09]]. Admittedly that sum is based on a person rising like a rocket but it still hints at the possibilities of the tax and how it could bring in more money instead of universities rising their fares. Secondly it would change as a persons salary's rises or falls over a twenty year period being more sustainable and increasing the chance of the costs being recovered. Thirdly rather than giving a person a required fee to pay it would be giving a person a chance to pay over a set time period

Firstly that sum is wrong as it assumes a person's going to automatically earn £40,000 in their first job. Dream on! The average starting salary for graduate in 2008 is "24,408" but in 2009 the economy's gotten worse so it will probably be lower ,maybe pushing 20,000 if we're lucky. [[ Prospects"What is the average graduate starting salary" http://www.prospects.ac.uk/cms/ShowPage/Home_page/How_much_could_I_earn_/Salary_and_vacancy_FAQs__2_/What_is_the_average_graduate_starting_salary_/p!eaLXbeX

A person will have to do a fair bit of a climbing in terms of getting salary rises to attain that level

Secondly Over the long term a graduate tax may just work out but as the NUS admits in its own higher education blueprint it would not work out in the first fifteen years. During that time the government would have to step in with loans something this cash strapped government can ill afford to take a giant leap with at the moment.

A graduate tax rather than tuition fees?

Yes because... No because...

Takes from the rich to give to the poor and reduce inequality

This policy unlike tuition fees is redistributive as it means rich people pay more while poor people pay less given the range between lower earners at 0.3% of earnings and high earners at 2.5% of earnings[[Shepard Jessica "Student leaders call for graduate tax to replace tuition fees:Graduates would contribute to a national tax out of their monthly salary over a twenty year period" Guardian Unlimited http://www.guardian.co.uk/education/2009/jun/10/nus-tuition-fees-graduate-tax Accessed 10.06.09]]

Someone in the top 20% by NUS's own figures would expect to pay back £30,000 for a 3 years course. That is quite close to overseas tuition fees[1]. As a result of this it is economical for some people to opt out of the government funding system and go completely private by paying overseas fees rather than home fees. Even in cases where it is not strictly economic, distrust of the government on taxes may cause some rich people to go private anyway - it is still a lot cheaper than typical public school fees[2].

With the rich outside of the system, there is no redistribution; hence there is no reduction in equality.

In addition, tuition fees are paid back on a sliding scale as income increases. They're wiped clean after a set period of time. This means graduates will pay more if they become rich following their education, while graduates who remain poor will pay less (possibly even paying nothing if they earn less than the threshold for their entire career). Both systems require the rich to pay more, and the poor to pay less.

Examples:
[1] http://www.coventry.ac.uk/international-students/fees,-bursaries-and-scholarships#overseas
[2] http://www.cliftoncollegeuk.com/upper/admissions/fees/

A graduate tax rather than tuition fees?

Yes because... No because...

Level playing field for students as a result of no variable fees

Currently universities can charge varying amounts for certain courses to UK students whether in undergraduate or postgraduate study up to a certain limit. However in a survey done by the BBC a lot of university vice chancellors have called for the cap to be lifted or at least increased to between £5,000- £7,000, with some calling for fees to rise as high as £20,000 (although this is a minority) [[Coughlan Sean "Universities Push for higher fees" BBC Online News Accessed 15.06.09. http://news.bbc.co.uk/1/hi/education/7946912.stm. This is something that would drag students in to further debt and deter prospective students from going to study at uni. A graduate tax would make for a level playing field for all students regardless of degree course as it would mean all of the students would be paying a similar amount for all courses at all universities. [[NUS "Funding Our Future Blueprint Full Report" downloaded from http://www.nus.org.uk/en/Campaigns/Funding-Our-Future-/NUS-funding-Blueprint-welcomed/

A graduation tax might make for a level playing field in terms of future students paying an equal amount but it wouldn't make for a level playing field in terms of past graduates who would STILL have to deal with the debt they had so why shouldn't future graduates[[Martin Land "Lib Dems to drop tuition fees pledge?"]] Liberal Democrat Voice http://www.libdemvoice.org/tuitionfees-4190.html . Further more the current system does give a level playing field in that people who are studying in England have to go through the same system and pay off through the same process. Finally as the NUS admits "every student wouldn't be funded to the same level" given that the funding generated to the trust would be merely "added" on to the HEFCE grant. That might mean that students could potentially suffer more inequality in terms of teaching [[ NUS " Frequently Asked Questions:External Stakeholders"http://www.libdemvoice.org/tuitionfees-4190.html ]]

A graduate tax rather than tuition fees?

Yes because... No because...

"Funding our failures as well as our successes "

This however means that those people who are paying more have gained more out of their time at university so should pay more even though they may have worked harder to achieve that end result. Just because some people who went to university gain larger salaries later in life does not mean that they were the hardest working, graduates may well have worked harder to become an academic themselves, or a nurse. These people should not have to pay as much for their education when they are not payed as much for what they ultimatly used the education for. This does not make them any less worthy of that education.

The NUS blueprint and any other blue print would have to take account that a graduate tax system could well punish scholars who've worked hard by saying that they have to pay a higher amount then "graduates" who to put it politely have not got the most out of their three or who knows how many years they spent at uni wasting their time[[ Nick Taylor " http://nick-taylor.blogspot.com/2009/06/nus-funding-our-failures.html.

A graduate tax rather than tuition fees?

Yes because... No because...

We already have a "graduate tax" system in place with the current system

The current system is still a tuition fees system as it puts a person in a form of debt that while it may not drown the person immediately acts as a sort of albatross around the persons neck i.e it is still debt that people are going to have to factor in when they get their first job above the threshold. It may not be much now (although a lot of students who in the current climate are struggling to make ends meet would disagree with that but what happens when new generations of students who have to deal with with fees of around £7000 per year. That's a maximum of £21,000 spread out debt that could cause problems for a person in later life even if their income is at the threshold.

Some people argue that the current system is surrounded by misunderstanding. This is because the debt as we know it isn't "a massive cheque" but rather a repayment of a debt as part of a persons salary over time. In effect this is something vary similar to the system the NUS is proposing despite the government's lack of ability in clearing up misunderstandings about the current one.[[Barr Nicholas "Nicholas Barr on why loans are better than a graduate tax.http://www.guardian.co.uk/education/2009/mar/24/nicholas-barr-graduate-tax Accessed 15.06.09]]

A graduate tax rather than tuition fees?

Yes because... No because...

Graduation Tax would reduce university autonomy.

A graduate tax put into an independent trust fund could help universities gain more academic freedom than they have now. [[NUS external stakeholder FAQ's Accessed 17.08.09 http://www.nus.org.uk/en/Campaigns/Funding-Our-Future-/Funding-Blueprint-launch-/ ]] . Firstly they would be more free from market constraints then they are. Secondly they would have some degree of freedom from the government as the trust fund would be independent from government and controlled by the stakeholders including universities meaning that they could worry a bit less about funding from government and exercise more independence on academic issues and other matters such as whether to help monitor all students at university, something that could increase government control.

If a graduate tax were introduced the money would go to the treasury resorting for universities competing for the same money as colleges. At the moment the money generated from tuition fees goes straight to where it should go, universities bank accounts, Under the NUS proposals it would go to a centralised higher education fund which could be exploited by the government through various means or give some higher education institution more funding than others [[Barr Nicholas "Nicholas Barr on why loans are better than a graduate tax.http://www.guardian.co.uk/education/2009/mar/24/nicholas-barr-graduate-tax Accessed 15.06.09]]

A graduate tax rather than tuition fees?

Yes because... No because...

College degrees are non taxable

You can't tax some one for the rest of their lives because they have a college degree. Tuition is out of this world high, but it always was. Even if all the college tuition and fees are funded by a loan backed by the government, then the interests is what needs capped. For example, my college debt was $30,000 at 8% average loan interests rate. So, sensibly, since it is a government backed loan, 8% of $30,000 is $2,400, so reasonably for a government backed loan, my total debt should be $32,400. A formula like that would allow students to graduate, have time to find a job and allow them to pay it off over time without running to credit bureaus and smashing their opportunities for other loans and jobs. Government backed college loans nan wait and should be exempt from credit bureaus since they cannot be discharged and written off. So, for me, now, I have had to run to China, hide from a now $100,000 debt, and give up life in America. But, not all is lost, I make good money here, I have a car and home, I eat good and get to screw lots of beautiful young Chinese college girls and the weed is free, you just pick it along the roadside and never pay or see any one to get it. The whole college loan scam has really blown up in America's face and now the result is that all the educated people are leaving America along with all the good jobs and all that will be left of it all is NWO chaos and FEMA camps like the Amtrak facility in full power ahead gassing and burning dissidents who refuse Islamic sharia law. All I can say is good bye USA and good bye USA Loans Corp.

Debates > A graduate tax rather than tuition fees?