"We already have a graduate tax - just a better version" blog discussion 15 July 2010 at 5:55PM edited 16 July 2010 at 11:15AM in Martin's blogs & appearances & MoneySavingExpert in the news 71 replies 7.7K views

MSE_Jenny

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.

Read Martin's "We already have a graduate tax - just a better version" blog

Please click reply to discuss below.

trippy

That's what I thought. I just treat the student loan repayments like a form of tax. Though I can't see anywhere that it says when the graduate would revert to a normal tax code, surely they can't be on the graduate tax rate forever!

oldie21

and what if they don't last the three years or don't "graduate"??????

only high-earnering successful graduates will be supporting them?


(whereas now all tax-payers presumably support those that don't earn over £15k to repay their loans.....)

marky52_2

How will this affect Scottish students?

DarkConvict

What gets me though, is that instead of going to university one could instead for say software engineering/computer programming, just do self learning and get the individual qualifications, then move into a low/similar job to get experience before moving to a graduate position without the graduate tax. A student loan is the way to go as those that take them out pay for it.

I understand the government does subsidise the costs, but then maybe this is where it can change, the government subsides less and the students pay a little more. As it stands there are more people coming out of university than jobs available. You already need to aim for the 2:1 or above, and soon enough need a master qualification to go with it due to fierce competition. Whilst this competition does mean the clever students make it into industry to many continue there part time jobs in supermarkets and retail chains (my friends have). The government would be wiser to reduce university funding and re-invest in apprenticeships, getting them out of education and into work. If they wish to seek a change in there job then they can save money and invest in university education after.

I may have some bias in this argument as I graduated only yesterday, top of year for computing students. So upping prices now would have less after on me.
There is some value to the american system, however there prices are simply to high.

al223

Apparently somewhere around 20% of university students flunk their courses, I'm guessing some of these would have been better off going straight into work or engaging in some other form of learning, so therefore surely the first thing to do to reduce the cost of higher education is to make sure the right people are going and that the right people are going to do the right courses. This also means there would be less people with large student debts despite not having graduated.

I dropped out of university in 2002 after 4 years doing 2 different courses. I haven't worked through choice for the last year but prior to that I never earnt more than the £15,000 limit to repay my student loan. After dropping out, I felt like I was in a worse position than if I'd never gone to university, as I was older than school leavers but had nothing to show for it other than failing at university.

On the other hand, assuming the graduate tax is only paying for universities, then surely the average student should end up paying at a much lower rate than they pay back their student loan, as they'll be carried by the highest earning graduates? Does it also mean that thousands of people can go to university, drop out and then never have to worry about paying for it?

jd87

marky52 wrote: »

How will this affect Scottish students?

Don't worry I'm sure those of us south of the border will continue to pay for your free studies.

DarkConvict

I think another issue is that courses are made to suit what students want to study, one problem of this is some courses are just not useful for gaining employeemnet.

If courses were made to match the demand in the industry it may work out better.

ahannah

Does anyone know if there are any plans to apply this in a retrospective way? more to the point how will this affect those of us who are already stuck paying off our student loans untill the age of 65? could it be that we'll end up paying 18% of our wages above 15K......PANIC!

Oldernotwiser

I've always encouraged my clients to look on loan repayments as a graduate tax so I have a lot of sympathy for Martin's viewpoint. However, the fact he misses is the way in which debts of thousands of ponds put off many students from lower income families from going to university. For that reason, I think that a move to a graduate tax might well be a good thing,

jd87

ahannah wrote: »

Does anyone know if there are any plans to apply this in a retrospective way? more to the point how will this affect those of us who are already stuck paying off our student loans untill the age of 65? could it be that we'll end up paying 18% of our wages above 15K......PANIC!

There's no way they could apply it retrospectively. Who is paying until 65? At the moment you only pay for 25 years then the rest gets written off.