It's interesting to note the NUS's support for the idea; they're proposing a 5% tax on gross income above a certain threshold (GBP15,000 is the figure quoted in today's Guardian) for a twenty-five year period after graduation.
Their justification for this is that repayments under the current system come to about 9% of income for graduates; by spreading this over a longer period at a lower rate, it hurts new graduates less and raises more from graduates later in their working lives when they're earning more.
Exactly. If you're paying back loans anyway then it's much easier for most people to pay them back through the tax system, rather than the current, blunter, instrument.
Aaaah. I was in the first wave of student loans, and I had to set up a direct debit to pay mine off, and get postponements when I was unemployed. It was a right pain.
Nah, you're fine, you're on the tax based loan, it was changed for academic year starting 1998 or 1999 (as in, I can't remember if I was 1st or 2nd year to benefit from the sensible change for my currently extant loan, my earlier loan for year starting 1993 was paid off on the way Andrew describes).
And yes, the current system is not described as a graduate tax because Labour promised no new taxes. So they created a system that works exactly like a graduate tax, and called it a loan.
At least you *managed* to get postponements. I'm in a weird situation with mine - they flat-out refused to believe that I was unemployed and kept 'losing' the paperwork, so I currently have two different sets of debt collectors chasing me, as they have been for seven years now, for 'defaulted' student loans I should never have had to pay, while I'm paying some of it out of my paycheque every month *as well*... at one point I had *FOUR* sets of debt collectors after me...
I think the idea of paying back _more than_ the value of your fees via graduate tax because you end up in a job that earns more strikes me as unfair.
In any case, once the value of the fees is paid off (as per the current student loans system), income is still going to get hit with large amounts of income tax anyway.
If the tax stopped at the value of the fees, that would be fairer IMO.
No, you're not 'paying back more than the value of your fees' under a graduate tax. You're contributing in a manner that reflects the financial benefit that you personally have gained by virtue of your (presumably state-funded) higher education.
If anything, it's an attempt to create a) a progressive tax that b) recognises the contribution that the state has made (through the education system) to the earning ability of graduates.
I recognise that the tax system just taxes income whether or not a person has a degree or not and the idea of the graduate tax is to add a tax specific to graduates and, heck, the money has to come from _somewhere_ but my problem with the graduate tax is that it taxes on _income_ post graduation, not the cost of the degree fees and the two may be completely unrelated.
It's worth pointing out that, in the UK at least, the current value of tuition fees is considerably less than the cost of tuition. Finding the number instantly is hard, but off the top of my head it's something of the order of 10%-33%.
(One of the (many) things that really pisses me off about the student finance debate - since at least 1988 - is how rarely these numbers are produced, which is why they're hard to find. Surely the actual cost of tuition is a pretty relevant figure to include in any discussion of how much prospective students should pay for their tuition? But apparently not.)
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Their justification for this is that repayments under the current system come to about 9% of income for graduates; by spreading this over a longer period at a lower rate, it hurts new graduates less and raises more from graduates later in their working lives when they're earning more.
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Uh,
If I had a paycheck. Which I don't.
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I'll burn that bridge when I come to it, I guess. I'm not going to have a job for ages.
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And yes, the current system is not described as a graduate tax because Labour promised no new taxes. So they created a system that works exactly like a graduate tax, and called it a loan.
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In any case, once the value of the fees is paid off (as per the current student loans system), income is still going to get hit with large amounts of income tax anyway.
If the tax stopped at the value of the fees, that would be fairer IMO.
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(Sorry for the late response, I managed to miss this in my inbox).
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If anything, it's an attempt to create a) a progressive tax that b) recognises the contribution that the state has made (through the education system) to the earning ability of graduates.
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http://andrewducker.livejournal.com/2111045.html?thread=14590021#t14590021
I recognise that the tax system just taxes income whether or not a person has a degree or not and the idea of the graduate tax is to add a tax specific to graduates and, heck, the money has to come from _somewhere_ but my problem with the graduate tax is that it taxes on _income_ post graduation, not the cost of the degree fees and the two may be completely unrelated.
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(One of the (many) things that really pisses me off about the student finance debate - since at least 1988 - is how rarely these numbers are produced, which is why they're hard to find. Surely the actual cost of tuition is a pretty relevant figure to include in any discussion of how much prospective students should pay for their tuition? But apparently not.)