"We already have a graduate tax - just a better version" blog discussion

Premier_2

Oldernotwiser wrote: »

It won't be a debt anymore so the question of repayment won't apply.

Correct, and as it's not a debt, it shouldn't advesrely affect peoples ability to get a mortgage etc. when they have graduated

DCodd

Premier wrote: »

Correct, and as it's not a debt, it shouldn't advesrely affect peoples ability to get a mortgage etc. when they have graduated

The student loan has no effect on your credit score either.

Premier_2

tylerdurden wrote: »

If graduates earn more over their lifetimes dont they/we end up paying a lot more tax (in the form of income tax and national insurance) anyway?

Yes they will if they earn more.

But there are some out there without degrees who earn high incomes, probably higher than most graduates ever will. They'll be paying more tax than those lower earning graduates. How will the extra education be paid for by those who benefit from it without a graduate tax (or the current loan system)?

Premier_2

DCodd wrote: »

The student loan has no effect on your credit score either.

Not the credit score, but I thought it was taken into account as existing borrowings when deciding how much to lend.

JohalaReewi

What about those graduates who paid their own way? Would they still be taxed?

DCodd

Premier wrote: »

Not the credit score, but I thought it was taken into account as existing borrowings when deciding how much to lend.

The only way it is taken into account is when a lender asks for your post tax earnings (take home pay). Your income and outgoings will have an effect on the amount you can borrow, as they do for everyone.

Premier_2

DCodd wrote: »

The only way it is taken into account is when a lender asks for your post tax earnings (take home pay). Your income and outgoings will have an effect on the amount you can borrow, as they do for everyone.

They've never asked me for my net earnings, only my gross. It's gross earnings that they use for income multiples.

They then consider existing borrowings, and I thought student loans were included as that is a borrowing. Existing borrowings, if any, are then deducted from the amount they are prepared to lend based on income multiples.

buglawton

The Graduate Tax is one of those headline ideas like Labour used to have and which all disappeared without trace.

E.g. if a foreign relative visits you, you have to deposit £2000 with the govt till they are seen to return to their country. Remember that one?

Or the Poll Tax, a loopy idea that did get through - for a while.

Govt will quietly drop this Grad Tax one.

Oldernotwiser

DCodd wrote: »

Ok that is what I feared. At the moment a student on a degree course can opt to only take a proportion of the loan available to them if they so wish, this helps students who's career choice is a traditionally lower paid one as they can control the amount they will ultimately owe, the new tax system negates the benefit of such prudency and will encourage students to take the full loan amount regardless of whether they need it or not, they will pay the same amount back either way.

So what do students live on if they are "prudent" and only take a lower loan? This is an option only for those from better off homes and would, therefore be quite discriminatory. A graduate tax would apply to everyone, regardless of their background.

Oldernotwiser

buglawton wrote: »

The Graduate Tax is one of those headline ideas like Labour used to have and which all disappeared without trace.

E.g. if a foreign relative visits you, you have to deposit £2000 with the govt till they are seen to return to their country. Remember that one?

Or the Poll Tax, a loopy idea that did get through - for a while.

Govt will quietly drop this Grad Tax one.

I think you'll find that the Poll Tax was a Tory brainwave!