to think a graduate tax is a very bad idea

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Just read that a graduate tax is now Government's preferred option for funding universities. Lord Browne is reporting later in year on his findings, so the idea may stay on the drawing board - but still, I need to rant.

1. How will this grad tax be ring-fenced so the universities get the money? What is to stop Gov just treating this grad tax as an extra income stream to pay for new pet projects or pre-election sweeteners?

2)It will encourage a brain drain as graduates go abroad to avoid paying the tax.

3. The idea that graduates earn on average over a lifetime £100,000 more than non-grads presumably is based on figures pre-dating the huge rise in the 90s of graduates (because graduates of the 90s haven't completed their careers and won't for several decades so their earnings are unknown.)

So, perhaps the graduate earnings premium has been diluted to the point that for many, a degree is not longer a guarantee of far better earnings. Doesn't that make the grad tax very unfair?

4. Once you put a tax in place, it usually stays there. And goes up. Will students know before they enrol at uni what their extra tax rate will be? Or are they signing a blank cheque for the Gov to dip into their earnings whenever it feels a bit short?

Anyone agree with me? Or is this actually fairer than, say, allowing unis to charge more for tuition fees in return for providing burseries for poorer students.

Shorter uni courses get my vote.

So shall I be the first to say that I think it's not a totally bad idea?

There won't be a funding shortfall: at the moment, students don't pay up front for their fees, they are paid by the Govt (via Student loans co) and then repaid by the student once they earn £15K. And I think there is also something to be said for not having a scary amount up front which would put off people from less well-off backgrounds. The current system is broken, so something needs to be done.

And Vince Cable as a Communist? Don't make me laugh! He's an old-fashioned economic liberal, and one of authors of the Orange Book. Hardly a Marxist.

OK - communist is a bit hyperbolic, I admit - but he is basically an old Labour dinosaur.

He contributed to the Orange Book, sure, but he is definitely not an "Orange Booker" in the mould of Laws or Clegg. No, he is a socially liberal socialist.

Just to clarify, would that mean that ds pays more tax despite the fact that he won't be taking out any loans & we'll fund him for everything?

If so, then that can't be fair!

my earning potential is entirely related to the two SELF-FUNDED post graduate qualifications i did and not my undergraduate degree.

if graudate tax was a % rather than a fixed sum (which it would have to be i think) then why should i pay more for my first degree because i have increased my earning potential at my own risk (career development loan first time) and from my own money (savings second time).

if university leads to better pay then income tax is effectively a 'graduate tax'.

the course has to cost what it costs whether you then go on to use it or not - do people who don't graduate not pay for their studies at all under the 'graduate tax?'

Rainbow - I agree that graduates leave University owing a scary amount. But it's a quantifiable, known, scary amount, which a graduate can monitor and repay and be in control of. It's not some vague, from now until the point you retire scary amount which you will never be rid of. I'd rather the former - and I have a DS1 who has just graduated.

All future tax burdens are vague and unquantifiable though aren't they? What income tax or VAT will be paying in 5,10,15 years time?

I'm still not so sure it's a non-starter.

If you're thinking of uni but you're scared of debt, and worried what kind of salary you might earn, then a graduate tax might not be so scary. If you don't earn so much, you don't pay so much. I don't see what's wrong with that.

And Vince Cable is so not a socialist. Will be fun to see how they hold the coalition together on this one though.

But with the current system, graduates don't pay back their loan unless their earnings are over a certain amount anyway.

So rationally the loan system is much less scary than a graduate tax; a fixed amount, relatively small by contrast with average career earnings, which you only pay once your earnings become moderate.

If people are scared off by the total loan amount for irrational reasons, given that a graduate tax would probably sting them for at least as much over a similar timeframe, then it's their own fault.

That depends how much the tax is and when you start to pay it, surely? At the moment, you start to pay back loans when you earn £15k, and at 9% until you have paid it off. Fees are £3k a year but if they keep the present systemm, they will soon be much higher, almost certainly. If you didn't have to start paying back until you earned more than this, and it was a lower rate, because it was over a longer period then maybe it wouldn't seem so scary and could be completely rational.

All depends on the maths.

Yes, I agree that obviously it depends on the specific figures. However, you should also note that it is very hard to be specific about the level of the graduate tax.

Whereas the repayments for the loan are obvious from the start, those for the graduate tax are completely unknown. So comparing the two requires an assessment of likely future earnings.

There are people who go to university knowing that they will be happy with a low-pay career afterwards - people who want to work in charities maybe most prominently.

However, most people want a good job and well-paying career afterwards. After all, that is the point of the much vaunted "graduate premium" (if it still exists), is it not?

Most graduates will hopefully go into the system thinking that they will earn much more than £15k a year on the other side!

Sorry, when I said "good job" in my fourth paragraph I didn't mean to imply that working for charities wasn't a good job!

Hopefully my meaning is clear even if my words aren't.

This is a dreadful, dreadful idea.

If graduate tax were brought in, I would certainly emigrate (there are tons of attractive jobs in Australia).

Further, how will this be implemented? Will Universities have to wait for funding till their graduates are earning over the required amount to get their money, or will they be forced into taking more international students (as is the case at present?).

I've been Lib Dem through and through since I had the vote, but I'd never vote for them again after Vince Cable. The more i hear from him, the more I dislike him.

I'd also like to add that whilst some posters might think a history degree can be condensed to 2 years, a science degree, with 30-40 hours per week of lectures/tutorials/labs plus the same time expected as independent study can not be converted into 2 years without downgrading to what used to be known as a HND.

The thing I dislike about the current system is it's regressive. Those who earn least but just over the threshold pay most back over their lifetime. By my calculations I'll pay my loan off two years before I retire, assuming I get a 2% payrise year on year, having paid back four times as much as I originally borrowed. (although I do think the current system has changed and loans are written off earlier now so may not be so bad)

As to whoever said you can't condense a science degree, my first year counted for nothing, only had to get 40% to pass, you could do away with that completely.

At the moment students can graduate without debt and no extra taxes if they choose. They ought to retain that freedom including freedom frmo the graduate tax in the new scheme or else some children will just go to university abroad.

"At the moment students can graduate without debt and no extra taxes if they choose"
Not really. Only if you either have very supportive (financially) parents, or work in a paid job throughout, going fulltime during the holidays. This is difficult as most universities limit the number of hours you work (or don't allow you to work at all, in the case of Oxbridge). So how do you do it? I was working nearly double the allowed hours, working two, sometimes three jobs during the holidays, and still graduated with tons of debt. I would love to have "chosen" not to.

tyler80, if passing the first year of a science degree is so easy, why do a significant percentage fail their first year, or only get through on resits?

The first year is there because not everyone will come in with the same entry qualifications and we have to ensure everyone has the knowledge they will require for more detailed modules.

Baring in mind the amount of students who fail their first year, to start the course immediately at the second year would be extremely detrimental to the quality of the course. (In particular as the first year has to more and more make up for deficiencies in the A'level system).

I feel sorry for graduates. The generation making the decision to screw them is the generation who benefited from free university education and jobs for life and the early days of the welfare state. And they are pulling the ladder up behind them.

Maybe all the ministers should volunteer to pay a higher rate of tax in return for their free tertiary education, just to show willing?

People I've worked with who have to pay back tuition fees have a really hard time. They have to pay expensive rents in order to live somewhere that has lots of graduate jobs (or move further out and spend thousands on commuting). Then they have to pay tuition fees. Then they don't actually earn a lot of money because they are young and haven't yet climbed the career ladder very far. It's not ruddy easy.

Can't see how any of them are going to be able to buy a house before they are 45.

I don't know anyone on my course who failed their first year, but then I was on a course that required AAB at A-level. The first year didn't 'weed' anyone out, if it was free I could accept the waste of time, as it's not I think it's a waste of money.

I teach on a course that requires AAA at A-level and sit on the exam board for the course (and have done so for a fair number of years now, so I've seen a good number of cohorts through the course). I know a significant number of students who have failed their first year and a good deal more who only progress by resitting exams.

Who in their right mind will want to do a degree if it means an extra-tax-for-life?
I would encourage my kids to get a skilled trade instead (plumber etc).

As a county, we can not afford to fund every 18 year old through university. We either have to ration the places or have the students themselves pay.

I can't see the electorate being overjoyed at the prospect of funding thousands of average students through average course. And I would certainly think twice about spending 3 years studying for a qualification that wouldn't improve my employment/earning prospects.

A graduate tax may make students think more deeply about why they are going to university and the value of what they intend to study. Similarly, universities may re-evaluated the courses they offer and the quality of students they attract.

Perhaps Edam is right, we should go back to the old system, where tuition fees are paid by the tax payer, but far fewer students attend university.

UnseenAcademicalMum, you make a good point about the (im)possibility of condensing certain degrees into a two year course.

However, there are still many degrees which could be condensed (e.g. English, which I did). I barely spent 6 months of each year at uni and worked 20+ hours per week throughout. Why not allow these to be condensed, if they could be, which could then be reflected in the lower cost of taking such a degree.

After all, it's pretty obvious that the average arts degree costs far less than the average science degree. I'm certain that the 4 hours of lectures and 15-student tutorials I had in my final year were costing nobody the £3225 a year I was paying for them.

I agree. Not everyone is destined to do academic study. There needs to be more encouragement (and more prestige) for trade-based courses. What about encouraging apprenticeships? The UK does not need thousands of people with media studies degrees, but it does need skilled tradesman. A big problem is that trades seem to be considered "lesser" and until that stigma is gotten rid of, then people will be less likely to make it a career choice.

Within my own family, I am super academic, read all the time and what not, and fortunately got to go to university and read as much as I liked. My brother, on the other hand, is totally practical - would hate to have to sit in a library and have to study. However, he was fortunate enough to be able to go to a high school where he could be trained to be an electrician, which was perfect for him, and he came out at 18 qualified. One of his friends, who is severely dyslexic, did the same course and then went on to study to be an electrical engineer. University isn't for everyone.