If you have been following the news, you will have heard that Business Secretary, Vince Cable, proposed a variable graduate tax to alleviate the current ills of funding in higher education.
The basic idea is that instead of paying University fees upfront, you pay nothing but then have to fork up repayment through a ‘graduate tax’ when you start working. This would go on for a finite period. Furthermore, the more you earn, the more tax you end up paying. As the Guardian put it:
This would mean those that go into highly-paid finance jobs and attended Oxford or Cambridge would prop up those that went into nursing at lesser-known universities.
While the graduate tax rate and the duration it is paid over is yet to be determined, the NUS— who are quite keen on the idea—suggested some figures. A 5% rate could be charged for all income over £15,000 such that a teacher earning £23,000 would pay £400 a year while a trainee lawyer earning £45,000 would pay £1,500 a year. This would continue over a period of 25 years and assuming that the income does not change in the example given, a teacher would pay a total of £10,000 while the trainee lawyer would pay £37,500!
Is this fair and will it work? Leave us your comments below.