AIBU to think that it would have been fairer to introduce a graduate tax than increase tuition fees

[Tryingtryingandtrying]

As it stands most graduates effectively pay a graduate tax for most of their working lives. Exceptions to this are those who do not earn enough, those who pay themselves minimum wage out of their own businesses and those whose parents are wealthy enough to pay fees up front as well as all living costs. A graduate tax would mean everyone who benefits from university education contributes, instead of those on middle incomes paying the most of all.

Yabu - it was better to increase tuition fees
Yanbu - a graduate tax would be a fairer way to fund university study

We have had a tight labour market & skills shortage for a few yrs, has that changed the number of employers looking for degrees?

Yet we have more graduates than ever before and employers are still struggling to recruit skilled British people.

Sending more young people away to study psychology or fashion styling isn’t getting us any more engineers or semi conductor scientists.

Could not agree more OP. People who say it's already a tax - I don't know any other tax where having rich parents (who can therefore pay your fees at 18) opts you out of paying thousands upon thousands in 'tax' later in life. That's our student loans system.

If it was a tax, it'd be evident that graduates are taxed an extortionate rate when all the different types of tax are combined for that cohort. But it isn't actually a tax so the ultimate cumulative impact goes unnoticed. Not to mention the continual changing of the goal posts. When fees went up to £9k a year prospective students were told they wouldn't be charged interest, not long ago it was at 6% for those same students who are charged hundreds of pounds a month to quite literally not even pay off that month's interest. The whole system shows utter contempt for young people.

Haha yeah, I paid off my student loan (3 years UG, no loan for MRes as I had full scholarship, another 4 years accumulating interest through my PhD) and paid enough tax on my bonus (i.e. not my base salary, just my bonus) to repay what the state paid for me to do my PhD (approx 18k tax free stipend a year plus fees) in 3 years of corporate working. They also got 3 publications out of me and two new disease mechanisms. A PhD was a requirement for my job. Glad I don’t have to pay another tax on top of the 45% additional rate I do pay just because I was motivated and hard working enough to get those degrees and leverage them into a high paying job.

What is not right is that my sibling will pay more for their healthcare degree over their lifetime because they’ll never earn enough to clear the interest, which is punitive.

The answer is to get more foreign students in to subsidise home students and reduce the fees and the interest rates. The investment pays for itself. The UK is a knowledge economy and we need more people who are highly educated, not fewer.

Yeah, sure it’s a good thing. So good that you should pay for it yourself. That way you will appreciate the value of it and universities won’t be a conveyor belt of mediocre graduates with pointless degrees. And we’ll actually have people with academic aptitude studying things which are actually valuable to the economy. The same economy which is required to thrive if the public want to keep having freebies.

Which degrees do you consider to be pointless?

But i paid my fees. I worked bloody long shifts every summer to pay them.

I chose to go to uni having budgeted & saved. Its not fair to impose a tax later on on people who a) already paid their fees/loans back and b) can't turn back time and choose not to go

Yet we have more graduates than ever before and employers are still struggling to recruit skilled British people.
Sending more young people away to study psychology or fashion styling isn’t getting us any more engineers or semi conductor scientists.

This - we fund too many people to study in universities, many of whom there's no demand from the job market for. Meanwhile we need more construction workers.

How does a graduate tax work for people who go to uni but don’t graduate? People who drop out after a year or two, either because they fail, change their minds, have family issues, ill health etc. It’s something I’ve always wondered!

all university education is beneficial on a societal level, although not all university education leads to quick and guaranteed employment.
the term "mickey mouse" degree is not helpful to an honest discussion on post secondary education.

No. Because somebody folk will deliberately make sure they don't earn enough to repay.

Or better still make it free again.

If you mean a retrospective tax, the costs of administering it would be astronomical; unless you relied on self-declaration.

Universities having to supply lists of everyone who graduated in, say, the last 50 years. Then HMRC having to trace them all - without any up to date address details to go on, and when many will have changed their names.

Even if you overcome that hurdle, it's still not going to be 'fair' because someone who graduated in 2022 will end up having paid much more tax by the time they die/stop working/whenever it ceases than someone who graduated in 1982.

The issue is that wealthy families are able to pay the least for university education by paying the fees straight up and avoiding the repayments and interest for their children. Some people pay many many thousands more than others and not because they earn the most money

I think what the OP really wants is for U.K. students to have to take the loan and pay it for its full term.

I’m not sure how I feel about it really.

I agree it’s not fair that the wealthier students and graduates effectively pay less than those that can’t afford to repay the loan quickly.

But then plenty of graduates will never repay their loan. And their degree still cost the same amount of money as someone who went on to be hugely successful. I’m not sure why it’s fair they pay less than someone that paid it off in full quickly?

That is how loans work. If you can afford to pay upfront or pay it off quickly then it will be cheaper than paying it over the full term. House, car, business, credit card. Loans are everywhere. Only most loans don’t allow those with low incomes to just not pay!

A graduate tax would be another costly program to administer, and those high earners already pay a lot more in income tax and lots of other tax.

The system probably does need looking at - I’m just not sure what exactly the solution is. Reducing university places, reducing fees and funding universities more through the tax system maybe?

And lowering the outrageous pay of the top teams in universities.

I'm surprised they need such a large estate, given the amount of online work carried out these days, including on the most unlikely courses .

9% charge on anything above £25k. With a lot of interest accruing. And now you want to increase that? To what? 12%? Would you like it if you had a 12% increase on your income tax?
If the current tuition amount is not sustainable then an increase has to happen either at the 'point of sale' or, as you suggest, they pay retrospectively over much longer time period. The government still has to pay the universities up front for it though. So how does increasing the repayment amount help that? Give people the option of paying it up front or off earlier if they can. Sure some will be able to do this more readily than others. That's how life is though. Adding extra burden to all graduates without giving them the option to get out of that debt is just wrong.

And most of these loans will eventually be written off at the taxpayer's expense.

Why a graduate tax and not just general tax? Why is it that people who don't have degrees think they shouldn't have to contribute to the costs of the education of those who do? The reason I ask is because last time I checked people without degrees still have children educated by teachers, go to the doctors or might be treated by a nurse, can rely on a solicitor or barrister representing them if they are accused of a crime, have the same access to buy technology at the same price as graduates etc etc. So why shouldn't they pay their share towards living in a society like that just because they chose a different path in life?

Also, given graduates pay significantly more tax than non-graduates on average, I question why they should have to pay again with a graduate tax or tuition fees anyway?

The only way I see it working is if there is still an element of fees, otherwise students skipping from one course to another wouldn’t contribute a fair amount. Purely a graduate tax would only encourage that sort of behaviour.

Are people on student finance Wales not restricted at all from moving out costs as they all get the full loan (be it grant Vs loan)

0.3% additional tax on income over the personal allowance for each year of university education, and students receive a low level of grant whilst at university.

This removes barriers to university education (undergraduate and postgraduate).

Obviously current and previous students who have paid tuition fees don't have to pay the graduate tax relating to those years of education.

Gets on my tits too when people call the existing system a graduate tax. It's not, because a graduate tax wouldn't be something you opted out of if your parents had enough money or you were old enough to have gone before a certain time.

Parents often forget that they’re supposed to be supporting a child through uni as much as possible if they start fulltime at 18, not encourage them to take student debt they spend their lives repaying. If it’s not affordable at 18 then the advice should be for them to work and do it a bit later or work and do p/t / online study to cut costs. There are so many options now.

Sounds like u don’t actually understand the way the payments for loan are calculated or u wouldn’t have done the post.