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

gambler00

The main problem with this thinking is that it penalises those of us who had little funding from parents and had to take out the full loan. I was the 4th child, and my 3 siblings had already been to uni. 2 were close to finishing their degrees when I started, and my parents simply couldn't afford to help me out. I had to take out pretty much the full loan each term.

Students from families who could afford to support them while they were at uni, so didn't require much of a loan, now end up paying far less in loan repayments (or "graduate tax") than those of us from less wealthy families. In fact I have a lot more to pay back than my oldest sister!

Note: I have no problem in priniciple paying back what I borrowed as a student. I have earned more with my degree than I ever would have without it.

SunnySusie

People who earn more pay more income tax under the current system - even with a flat rate.

If you are earning 100k a year you are already paying more in tax than most of us earn in a year - seems "fair" to me. In fact the top earners contribute the vast majority of income tax in this country already!

Working harder and having to pay a higher % seems totally unfair. As a middle earner on the threshold of a higher rate I seem to be working harder and harder and getting less and less. How is that "fair".

The point being that higher earners more than pay back the cost of their education anyway so there is no need for an additional tax.

What exactly is unfair about the doctor who's education we paid for through tax saving our life one day? The more we invest in the education of our population the more they can contribute, the more wealth they generate, the more tax is collected, or if they don't become high earners they contribute in other massively meaningful ways from driving ambulances to meeting our artistic needs.

This is worth paying for.

It is so ludicrously simple that I just don't understand anyone who doesn't get it!!

bonzer

Why not vary tuition fees with society need for that degree? For example measure the number of people exiting degree courses into jobs or the number ending up on welfare. Increase or reduce the state subsidy for each specific course depending on number of employable people produced.

The price of the degree would feed back into people's degree choices and result in more people doing degrees beneficial to both themselves and the state.

Or do they do this already?

npw32jnw

My thoughts for what they are worth.
Society needs people to go to uni (doctors, dentists, even lawyers!!) to properly function. However it does not need 50% (or whatever current target is) of young people to go. There simply isnt 50% of all jobs which require a degree. My company advertises jobs as requiring degree, but still appoint people into those roles without a degree - it is relevant work experience which counts most.
What benefit does the country get from a media studies degree (sorry to pick on you if you have one!) that the person could not get from work experience and starting work at 18 rather than 21.

Why should I, who have a degree, pay a higher rate of tax for the rest of my working life, when I have paid off the loans I took to fund my studies (whilst living within my means, no (ahem fewer) wild parties, high spending etc). I now earn more than I would without a degree, so Mr Taxman gets his benefit.

I think that the only option is that students have to pay for the course they want to take and tuition fees are the way to go, and I say that as father of 3 knowing that mine will more than likely want to go - I know I will end up paying some of that.

I understand that promising students from lower income households will be put off, but there needs to be some focus from the universities themselves on those students and ensuring they are not lost to the system - how about more in the way of private business funding the cream of lower income students through uni?

However I temper my thoughts by saying that those brightest but low income students will always land on their feet, providing they are willing to put in a bit of effort and work.

lazer

gambler00 wrote: »

The main problem with this thinking is that it penalises those of us who had little funding from parents and had to take out the full loan. I was the 4th child, and my 3 siblings had already been to uni. 2 were close to finishing their degrees when I started, and my parents simply couldn't afford to help me out. I had to take out pretty much the full loan each term.

Students from families who could afford to support them while they were at uni, so didn't require much of a loan, now end up paying far less in loan repayments (or "graduate tax") than those of us from less wealthy families. In fact I have a lot more to pay back than my oldest sister!

Note: I have no problem in priniciple paying back what I borrowed as a student. I have earned more with my degree than I ever would have without it.

I think you have an issue therefore with your own family not with the system.

The idea at the minute is that you pay back your tution fees at 9% of earnings for x number of years and if you have taken out aloan you also pay this back at the same rate.

It is up to each individual how much of a loan thay take out, and I think this should always be the case as the loan does not fund the education but the lifestyle while gaining that education

I too had taken out the full loan each term I was university as I come form a working class family, with only one parent working and my brother was at university at the same time as I was.
I don't hold any grudges against the people from weathlier backgrounds as they didn't have to borrow the money. If parents choose to fund their childrens lifestyle that is there decision, they are using money on which tax has already been paid, if you are funding your lifestyle you are using borrowed money, on which tax hasn't been paid - therefore your repayments are the tax.

My gripe with the system was witht he way it used to be,

There was the student loan, a means tested element to the student loan, and c.£1k fees.

Due to my background I got the full loan and didn't have to pay the fees, however some of my friends, got ony the basic loan and had to pay the full fees, so they had less money to live on at university to live on then i did.

I completely disagree with means testing further education costs.
I also disagree with grants for the poorer familys

If ervyone is being given the same amount of money, why should some be given it in the form of a grant and others in the form of a loan when everyone is receiving the same benefit from it.

In my opinion the current system is best.

However - the terms of the loans should be changed so that everyone is on the same terms - ie interest set the same for all loans, and all written off after 25 years.

artha

So what's next? An A-level tax? As education is only compulsory up to a certain age surely anyone who chooses to go beyond this should pay if they are going to get a better job (implied higher income?)

There is however a disconnect in government thinking in paying people to stay on for A levels which leads them down the University route at which point they (and their parents) are made to pay for having taking "the Kings Shilling"

This country does not need a Graduate Factory it needs to go back to the older system which allowed the brightest to fully develop their talents regardless of their background. That is what made Britain Great. And by the way I'm not a Daily Mail reader

Oldernotwiser

FATBALLZ wrote: »

Unfortunately this government looks like it has the same attitude to young people as the previous one - hammering the minority of students doing sensible and ultimately useful degrees with a big tax hike once they leave to pay for the wasters and avoid tax rises on the voting mass of baby boomers who took their free education and don't want to provide it for the next lot.

I think many of us would be happy to fund free HE for the same proportion of the population as in our day. Free HE for 40/50% of the population isn't viable by anybody's standard.

exil

Speaking as someone who got free university education back in the 70s, I would be quite happy to start paying for it now via a backdated graduate tax - though I believe this isn't really on the cards.

As it happens it seems that the coalition disagree with themselves on the Graduate Tax so it's unlikely to be implemented.

Odd that media studies comes in for such stick, when it is of course a vocational qualification relating to a growth industry.

gambler00

lazer wrote: »

I think you have an issue therefore with your own family not with the system.

Not at all. I was just using my family as an example.

The student loan can be viewed as a graduate tax, but a highly regressive tax which generally raises more from students from poorer backgrounds than those from wealthier backgrounds.

melrig

I graduated a while ago and am still paying back my student loan at 9% of income.
I have 4 children and I get child tax credits.
My eldest child is about to go to university - what I earn next year will determine his grant.

Question :
How much extra does my family get for every £100 extra that I earn ?

Answer :
£2.

How do I get this ?
It's fairly simple really :

£32 goes to tax and NI as stated by Martin.
£9 goes in student loan repayment or graduate tax.
£39 goes in reduced child tax credits.
£18 is lost off my eldest child's grant.

Remainder £2.

The above person is ficticious, but not too far from our own family.

The incentive to earn more money when you are on lower income can be very little.

Hopefully this provokes some thought and comment !