We should scrap tuition loans and have a graduate tax

With the recent furore over tuition loans, I've spent almost 5 minutes thinking about this and the answer: some form of progressive graduate tax.

The current system is better than no fees, the evidence coming out of Scotland makes that obvious, but there are still major problems.

1. Over the long term it's still going to cost the government about the same as having no fees, they've just shifted the costs to future governments

2. Those who do an (economically) highly valued degree at a very highly reputable institution get well above their loan value while other do not get anywhere near. Those who do well pay the loan of fast and end up paying much less than those who only do ok.

3. It's creating a system where student do not feel uni is worth it. They look at the cost (average now 45k) vs the prospective jobs and this makes them unhappy.

I think some form of graduate tax starting around 18k and being circa 1% so everyone pays something and building to 3-4% for high earners. This could also finish after so many years.

A graduate tax will encourage wealthy and successful graduates to go abroad.

Good plan.

So basically to make the 'ok' degrees have a better loan value you thought up of a system which will force people in plan 2 loans to start paying at lower incomes and not only that but pay a much larger amount (compulsory) per year at these very low incomes.

Would this affect all graduates or only those from now on?

Can't we enforce laws that mean rich people need to pay tax?! I don't understand why this hasn't been done yet unless it isn't possible

Also, I personally feel like the government want to make university less affordable so less people go, as degrees are becoming less of something that stands out on a CV, and more something that's required - so the actual educational standard isn't affected by the fee change?

Doesnt this then become a tax on success? How do you know the degree was responsible, when it may be down to someones hard work?

It's not fully relevant, but I was thinking about it in terms of this - I personally want to take a gap year to work full time so I don't have to take out a maintenance loan, and if tuition fees were lower, I don't think I'd feel the same way, because so many people are alrrady calculating how much interest they'll be charged - so it does add to the extra stress

And yeah it's so ****, my parents can afford it, but my sister will be at university at the same time as me (which the government haven't considered) and then my twin siblings will go as soon as she leaves, so it's still going to have a considerable effect even though someone's income may SEEM high - also, when you live in a major city everything is so much more expensive, especially mortgages, and I feel like the government don't take enough factors into consideration when it comes to loan entitlements

I'm of the view that success is largely down to luck - ie where you're born, your parents, genes etc. Having said that we don't disincentivize people earning more so there would have to be a careful planning around how the tax works.

I think the problem is that a good number of students come from abroad, and take their skills with them when they leave. This is the reason against free degrees. Not to mention uk university education is generally speaking, among the best in the world.

You are absolutely mistaken and have no idea what you're on about. There are plenty of grads who came from poor backgrounds and made it to the top, not by luck but by working hard. It's absolutely ridiculous to disregard people's success, because you feel somewhat jealous of them, by coming up with an unsubstantiated claim like the above.

It is not just luck, luck is a small part of the equation.

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You could say they take their skills, or you could say that education is one of the UK's main exports. People are prepared to pay for education, so if you encourage people to come from abroad, pay fees to be educated, and then go home (or whatever) you're working to improve the country's economy.

Luck is a small part? Look at the figures of those who go to private school. Only about 7% of UK yet they make up almost 50% of top jobs in the UK. Is that all down to hard work? The rest of us just too feckless and incompetent to become lawyers, judges, doctors...
http://www.theguardian.com/education/2016/feb/24/privately-educated-elite-continues-to-take-top-jobs-finds-survey

Some other reading if you're interested - the book itself is worth a read.
http://www.ibtimes.co.uk/myth-meritocracy-review-james-bloodworths-polemic-shows-britains-level-playing-field-lie-1561771

Hard work is no doubt vital to success but people work hard because they believe it will get them somewhere. For many - and we're seeing this in a drop of social mobility since 2008 - hard work is becoming less important.

Would you pay road tax on a car that didn't work? Would you pay council tax at an address where you didn't live? Would you pay for a faulty £30K product without complaining?

Since most people will have useless degrees, why should they pay a tax on them? The current system works well since grads with non-grad jobs (and there are a lot of them) don't pay a penny back (until they earn above the threshold) and grads with grad jobs are paying back at a minuscule rate which allows them to get their foot on the ladder and become financially independent. You should only have to pay back once your degree has actually shown to be useful (which will be evident by your wages) - otherwise you're buying a very expensive faulty product (most people DO go to university on the premise that they believe it will improve their job prospects).

Here's a radical idea if you're into money saving for the country (and would like to prevent the higher education system from destroying young people's lives) : stop encouraging everyone at age 17 to make university applications because:

1) Very few 17 years old have any idea whatsoever about the reality of working life and what they want to spend the next 50+ years doing - you cannot make that kind of decision when all you've ever known is classrooms.Very few people know what they really want to do for the rest of their entire lives at 17 years old.

2) Not everyone actually needs a degree for the career that they've chosen - there are apprenticeships and NVQs which offer far better employment prospects than your average BA Hons Fine Art or Eng Lit degree etc. Did you know that there is actually a 'Retail Management' degree now? Sorry but no - if you want to be a retail manager then get out of your classroom and get a job as Sales Assistant and get hands on experience and work your way up. In the 3 years that it would take to get the degree and rack up a stupid amount of debt you could work your way to that position the traditional way - by working. Employers are more interested in real life experience, not certificates.

3) If you're in team 'send them all to uni' then realize that once they've got a useless degree they'll be pushing up the welfare figures and you won't be able to retrain them due to government rules which don't allow graduates to get funded for NVQs of apprenticeships. So now you have a generation of over-educated burger flippers at best and degree-educated benefits claimants at worst.

But you can't reason with a system that is fundamentally idiotic - I've stopped trying.

PS. I'm a graduate.

Statistics tell you absolutely nothing either.

Ok on the one hand we have decades of social research on the other we have your anecdotal experience. I'm happy to leave it there.

x

Any statistics or evidence to back up the bit in bold?

I strongly disagree with we need more people at universities. The graduate market is already exceptionally saturated.

Can't we enforce laws that mean rich people need to pay tax?! I don't understand why this hasn't been done yet unless it isn't possible

Also, I personally feel like the government want to make university less affordable so less people go, as degrees are becoming less of something that stands out on a CV, and more something that's required - so the actual educational standard isn't affected by the fee change?

Well you two kinda echo each other, you have the same concerns it seems? But as eliza said, a degree is something required, hezzlington. So I believe everyone should be getting educated, or at least have the chance to whether they take it or not, otherwise if they aren't, they have less chances of getting employed. In countries with free or cheaper education, many of those countries actually do quite well in education and "take all our jobs" when they come over, as well as in the US and other EU countries. They get a degree like it's nothing, and having a degree might increase employability because many employers do make it a requirement, as far as entering the workforce (even though I know there are some people who haven't stepped a toe in a university and are doing quite well for someone uneducated. But as they're a minority we can't really take them as a good example).

But as I said to JordanL, keeping the fees high and the loans low keeps certain people out of uni, thus locking them into the lower class more often than not. Unless they have some miraculous connections to someone in the workforce or at a business.

So yes I agree with elizahughes and said before in the thread anyway that making Uni less affordable means less people go, and that's obviously horrible, isn't it? But eliza, what do you mean by the last question: "so the actual educational standard isn't affected by the fee change?" Is that rhetorical or?

Required for what though? Not all degrees are equal in terms of job prospects/general usefulness. Although this is particularly hard to measure.

What do you mean required for what? Required for a job...It's expensive to train for the job, ask any employer/owner. They prefer someone who went to college/Uni/has been working already and trying to climb the ladder, because they already come with the required skills to do the job... As opposed to someone who's not worked/not been to college or uni. They provide no benefits, although it doesn't mean they are stupid and can't learn overtime but no one wants to deal with that, sadly, so that means you have to have a degree and even better with a filled up CV to start work, especially if you don't know anyone/have no connections.