Bolivia Newton-John's Blog

Graduate Tax: The worst of both worlds | July 16, 2010

As far as I can tell a Graduate Tax would take all of the problems of the current system and compound them.

Students worried about debt racked up over uni, albeit paid back PAYE? GT effectively places them in permanent and unlimited debt in the form of higher tax. Cashflow shortfall in terms of people starting paying off their loans some time after they graduate? GT may never recoup the costs of higher educating those people, and unfairly burdens higher earners for services rendered, while not making the cashflow problem any easier.

I have not seen any hard evidence that poor people are put off because of the high fees, precisely because those fees are in the form of income-contingent loans, and people expect to benefit financially from going to university. I even read somewhere that the proportion of poor people with good grades going on to university was almost identical to the proportion of middle and high income students with good grades going to university, the huge gulf in real terms obviously being due to the fact that students from low income families so consistently leave school with poorer grades. Surely it should be clear that this is the real issue to be tackled; how can we make schools in poorer areas perform as well as others, regardless of the socio-economic background of their students? Maybe it’s systemic, maybe it’s funding, maybe free schools are the answer, maybe better teachers, I don’t know. But I do know that that is the only way we will get more poor people to uni, by focussing on 3-18 education.

As for free university education, give me a break. Given the student demographics, fully taxpayer-funded higher education represents a huge redistribution of wealth from the everyday taxpayer, most of whom did not go to uni and many of whom are low income, to middle-class children, who have already been at a natural advantage from their birth. Saying “society needs more graduates” is at the moment a middle-class wheeze. Society needs greater social mobility, better universities, and a much better pre-uni education system, but none of those goals are aided by the thirst for more graduates.

Which leaves the initial problem of cashflow shortfall. I think it should be the students who pay, and I think our current system of income-contingent loans is the only way that can happen, but this leaves a huge deficit in the universities budget. The only answer is fewer students going to university, at least with government loans. The graduate market is currently flooded with too many bodies, and not just because of the recession. It would be lovely if everyone could sail merrily on into their thirties learning more and more and becoming happier and everyone shat sunshine and flowers picked themselves, but the government must think in terms of the economy as a whole. Sending so many kids to uni raises their hopes and their sense of entitlement, only to crush them, and leave them with huge loans to pay back, which is terribly unfair on them, and it also takes hundreds of thousands of young potentially skilful wealth-creators and entrepreneurs, the very people who best understand young people and the future, and makes them economically inactive, which is bad for the country.


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1 Comment »

  1. […] Graduate Tax: The worst of both worlds on Bolivia Newton-John’s blog. ‘I think it should be the students who pay, and I think […]

    Pingback by Top of the Blogs: The Lib Dem Golden Dozen #178 — July 19, 2010 @ 7:17 pm

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About author

Bolivia Newton-John is an enthusiast from South East London. She will be mostly writing about society, anthropology, politics and entertainment, though hopefully in a less pretentious manner than here indicated. Bolivia Newton-John likes diplomacy, irony, and seeing the big picture. Bolivia Newton-John dislikes misanthropy, self-importance, and censorship.







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