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| The NUS Graduate tax: replacing a good idea with a bad one |
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| Written by Giles Wilkes |
| Thursday, 11 June 2009 15:34 |
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The NUS seems to have accepted the principle that the beneficiaries of an education - high earning graduates - should pay for it. To this end they propose a graduate tax. This is a step forward compared to their previous insistence (alongside the Liberal Democrats) that the general tax payer should fund it, whether or not they benefited from an expensive university education. But it has a long way to go before it looks like an ideal system. Professor Nick Barr, who played a big role in designing the current system, has eloquently criticised the graduate tax before. The NUS seems to have tried to address some of his concerns by putting a 20-year time limit on the tax, and starting it at about £15k. It looks like it will result in richer graduates subsidizing poorer ones to a large degree:
Whether or not you think this is fair depends on your political views. The existing system manages this problem far more elegantly, by asking everyone to repay the fee they incurred but wiping the slate clean after a number of years. The difference seems to be that the £40k graduate keeps on paying long after his debt is repaid. What cannot be doubted is that it constitutes a much larger disincentive to getting a high paying job. Again, it may be a controversial question whether you think the chances of a high paying (and therefore probably productive) job should be part of the student's thinking when choosing a course. For the thousands of people who take their own time and money to pay for evening courses in order to get ahead, it might seem like a nonsensical question: people who take a risk to retrain naturally wonder whether the cost will be repaid with a better job. Where we definitely part from the NUS 'vision' is encapsulated by this statement that their President makes: Our proposals would end the very notion of a course fee or price, and shut the door on a market in feesUniversities would be funded by a trust built up from the graduate taxes. The trust would be independent of government and would distribute the money to universities through the Higher Education Funding Council for England (Hefce). So instead of a beautifully decentralised system, in which universities couild choose differently priced courses with presumeably very different costs, and where, crucially, the successful universities could expand and receive more money directly from the enrolment numbers rising, we would have a quango making the decision from the centre. By what means could students exercise influence over the universities? Under an uncapped tuition fee system, by the most potent means known: by choosing not to go to universities that offer a bad deal, by applying the same pressure that ensures that some firms exist and some don't. There is no reason for 'market' to be a dirty word. It is in fact the best way for the members of the NUS to get a better deal: much better than marching, or hoping that behind the scenes politial lobbying at the HEFCE will somehow magically provide the higher education they want. The NUS has done its members no favours here. Most of the people polled by the Guardian like it. But I suspect that quite a few of the silent majority that don't get a university education feel like this. |
| Last Updated ( Friday, 12 June 2009 10:21 ) |



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