Quality | 2009.06.10
Student leaders call for graduate tax
Graduates would contribute to a national trust out of their monthly salary over 20-year period
Student leaders will today call on ministers to replace university fees with a graduate tax, in a radical departure from decades of opposition to any form of payment for tuition.
Under plans published this morning by the National Union of Students (NUS), tuition fees – currently up to £3,225 a year in England – would be abolished.
Instead, graduates would contribute to a national trust between 0.3% and 2.5% of their salaries each month, over 20 years.
The contributions would depend on a graduate\'s salary. A graduate on £40,000 would pay £125 a month, while someone on £16,000 would pay £5.
The trust would be independent of government and would distribute the money to universities through the Higher Education Funding Council for England (Hefce).
Universities are lobbying the government to lift the current cap on tuition fees and allow them to set their fees individually, so that they can meet the rising costs of providing higher education.
Vice-chancellors have suggested annual fees of £5,000 or more.
But the NUS believes this would lead to only the richest students being able to choose where to study, and the most prestigious universities becoming too expensive for the poor.
Until now, research suggests the majority of students have not been deterred from applying to university by tuition fees, but the NUS warns that future rises would discourage young people from entering higher education.
The NUS proposals come ahead of a government review of university finances later this year, and are an attempt to stave off an open market in fees.
Under the plans, the contribution a student made to the trust would be determined not just by how much they earned, but by how many credits of university study they had completed.
This would, the NUS says, enable students to move in and out of study and between full- and part-time courses. Employers could make voluntary payments into the trust.
At present, most students borrow the money for their fees from the government through the Student Loans Company (SLC). This sum is added to the debt they must pay off. Graduates pay around 9% of their salaries towards their debt once they are earning over £15,000.
Universities would be better off in the long term with the NUS\'s system, the union argues.
After 20 years, graduates would be giving the trust £6.4bn a year. The revenue from fees, if universities were to charge £5,000 a year, would be £6bn.
In the 20 years until the trust fund grows, NUS suggests the government puts into the trust the £4.5bn a year it would have lent students through the SLC.
Wes Streeting, the NUS president , said "the easiest thing" for students to do was to continue saying they should not have to pay for tuition at all.
"But both of the main parties are wedded to the notion of students making a contribution to higher education," he said.
"There\'s absolutely no prospect of them going back on that, and universities need more money to provide a good quality experience. Our proposals would end the very notion of a course fee or price, and shut the door on a market in fees."
At least 30,000 students have signed an NUS petition against the current fee system.
The NUS report covers tuition fees. It will publish another report later this year suggesting changes to the way students pay for their living costs.
For more information, please visit
http://www.guardian.co.uk/education/2009[...]/nus-tuition-fees-graduate-tax
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