Graduate Tax

Discussion in 'Topical Discussion' started by Samsonite, Jul 15, 2010.

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  1. Samsonite

    Samsonite Mine's a frosty one

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    Thought I would start up a thread on this as it's in the news a lot and there are always plenty of students, graduates and students-to-be on these forums.

    Is graduate tax fairer than paying back a loan? I suppose it depends on how you define fair.

    I started uni just after the loans came in. I was gutted because the grants which I missed out on were perfect from a student's point of view - free money that you don't have to pay back. Well technically income tax paid for it and graduates earn more on average, so it got paid back - hang on... so why introduce graduate tax? So graduate tax is just a tax increase...

    I have now come to terms with the fact that I have to keep paying back my huge loan slowly for the privilege of going to university - it is a loan and you pay it back.

    The big argument is always about poorer families and alienating them from a a good education. The loans were ok in a way - poorer students had to borrow bigger loans, but in theory they should get well-paid jobs just like the wealthier students. A bit unfair due to coming from different circumstances, but the opportunities are there.

    Of course, with graduate tax, bigger earners are going to feel annoyed that they are funding students more than graduates who have low paid jobs. This gets even more contentious when you look at certain uni courses - there are plenty of courses which will not help someone get a career and they are just there for personal interest more than anything.

    Boy, this post is getting big! I personally think the loan works ok on balance because you don't have to pay anything back if you earn less than £15k. You never have to pay more than a certain percentage of what you earn (like tax), BUT, at least you are likely to pay it off before you retire, unlike a graduate tax. Also, it means that whatever background you are from, you decide whether or not you want to take a loan and if it is worth it to give you better job prospects. My parents were both doing mature degrees when I went to uni, so I was considered very poor in terms of funding so got the biggest loan properly and it is still huge! Worth it though!

    To be honest, tuition fees are possibly a bigger problem if they increase to £7k...

    And breathe.
     
  2. phil2715

    phil2715 Registered + Sale

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    Here's my highly biased, poorly researched action plan:

    1. Cut university places by 75%, mainly by abolishing mickey mouse courses (and the universities that provide them). How to decide what courses are Mickey Mouse? Simple, base it on entry requirements. If you only need a couple of Ds to get on the course, it's clearly a waste of everbody's time.

    2. Subsidise the remaining universities and courses directly from the government.

    3. Offer student loans for the top-up fees, and link the repayments to a graduate tax.

    4. Structure the graduate tax such that it is earnings linked, and more importantly, make the rate vary (as low as 0%) depending on the career the graduate goes into.

    5. Use the variable rate in (4) to drive graduates into areas that are seen to a) benefit society as a whole (e.g. medicine, research, teaching, policing etc.), or b) that are shortage skills (e.g. various engineering disciplines etc.).

    Thoughts?
     
  3. Samsonite

    Samsonite Mine's a frosty one

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    Not too bad for a start. I think that Mickey Mouse courses sprung up more while the economy was booming, so it makes sense to cut them down a lot. Experts are actually advising that. I think there will be some backlash if they create the new graduate tax without cutting down these courses.

    Some good points there, thanks Razzle.

    Cutting courses is tricky in some cases, but there are certainly plenty of useless ones. Music related ones however could be difficult because apparently music is the UK's largest export. Sports studies never seemed quite so important though...
     
  4. phil2715

    phil2715 Registered + Sale

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    I'm definitely not against the more academic course (i.e. non-vocational). I think university degrees are typified by subjects like philosophy rather than devalued because of them.

    I'm thinking more about the cynical IT style degrees that are offered which seem to be aimed at low achievers in sixth form, and provide nothing more than a vague introduction to a narrow selection of IT topics.

    When I've been interviewing for help-desk jobs in the past, I was disgusted at the number of applicants who bigged up their fancy sounding 'IT Communications' degrees, when they had a raft of Ds and Es at GCSE in what I would consider core competencies.
     
  5. Samsonite

    Samsonite Mine's a frosty one

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    Full agreed, I went through over 100 CVs for a programming job and they all had "Computing" degrees, but one of them who we hired against my own decision (2 against 1) turned out to have only done Microsoft office and a bit of VBA, but made it seem like he had a full on Computer Science degree. He had no idea how to program and quite after a few months because he was getting stressed about not having the ability!

    Anyway, so yes - I too have huge gripes about the way that IT related courses have been diluted and it seems that only 1 in 100 have a proper degree which covers good ground. The only way to be sure is to check the syllabus for each degree course.
     
  6. spikeboy4

    spikeboy4 Super Kustomer

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    I had some objections to the way the student loans were calculated in the first place.
    3 years ago i applied for uni, problem was, both parents were divorced and re-married, and all 4 of them (parents + partners) were in high paying jobs.
    my mum had her own business, which was rather high income.

    So, as far as the loan was concerned, i got the absolute minimum, not too much of a problem if you have high income parents right?

    Unless they cant support you. See, the problem was that high paying couples, tend to have a high quality lifestyle, which costs more, so high income doesnt always equal more dispensable cash.

    degrees are, in a sense, over-rated at the moment. I didnt go and i have to say, im kinda glad, i went to work in IT and turned out to be good at what i do. Both me and the missus are now doing part-time degrees with the OU and finding the study much MUCH easier than when we were in school.

    Although it is abit infuriating when i meet people who are going to do greek mythology for a degree, when asked why they reply with "i like greek mythology" what do they plan to do afterwards "dunno, not thought about it. May go into teaching greek mythology"
    (actual conversation i had with someone i went to school with).
     
  7. Samsonite

    Samsonite Mine's a frosty one

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    You will find that the more academic universities will have some basic components for most degrees, like presentation skills, project management, accounting & law. I had to do these things on my computer science degree and we were all thinking "why do we have to do all this?", but obviously these are useful skills that can be applied to many jobs which is why some companies hire people who have any degree from a good university.

    It is true that if you have the determination and the brain, you can get far without a degree. My brother turned down uni and worked his way from call centre operative to now a senior consultant at a global company. The only thing I would say from my personal experience is that in my work, there are many potential projects that get thrown up in a group meeting and questions like this come up: "Has anyone done AI programming?", "Has anyone got any experience in x, y or z?". Nearly every time I can say I studied it at uni which usually opens the door to widen my experience. Of course I pretend I haven't if it's something painfully boring!
     
  8. ArTizan

    ArTizan Member of the Month

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    I agree that courses do need overhauling, there are so many almost joke like subjects that are a complete waste of everyones time.

    But, cutting places by 75%? How will you decide who will get in and who won't? Especially due to the fact that so many people get good GCSE and A Level results.

    I'm concerned that the fact between the so called rich and poor is getting further and further apart and uni is a way to almost boost poorer background people who achieve well at school. By cutting places and making uni so 'elitist' you're taking away opportunity for even more low income families and kids who have aspirations and simply letting all the eaton boys get their degrees.

    Worded in a strange way but hopefully you get what I mean.
     
  9. phil2715

    phil2715 Registered + Sale

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    You raise some good points, so I'll try to address them in order.

    Like I said, my plan wasn't particularly well researched or informed. More of a gut reaction tbh.

    Anyway:

    1. How would I decide who gets in where? Two methods:
    a) Interviews (Oxbridge don't really stream on exam results as all applicants are going to get straight As, so they have entrance exams and / or interviews)
    and
    b) Redesign A-levels (and maybe GCSEs) such that institutions are able to differentiate between the top grades. It's not about making exams harder or easier, but just giving the system scope to separate out excellent students from merely good ones.

    2. University should be elitist. Academically elitist that is. That's not to say I disagree with programs that try to use education as a means to boost those from a poor background. I have a working class family, went to a comprehensive school, and still got into Cambridge, so I'm glad that these opportunities were available to me.
    As I outlined above though, leave the option in there for people to go to Uni out of their own pocket, but give them the option to have it funded and then repayed through PAYE once they've graduated, and are earning enough.
     
  10. six5tring

    six5tring Silent Kristian Konsumer

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    I think I'm personally for the loan... purely on the reason that if taxed I probably feel less motivated to get a good job, however the entire point of uni in my eyes is so you can get a higher paid/more specialist job in the first place rather than climbing the ladder from the bottom.

    What I do have question with is the courses that essentially in the same time period you could have achieved without university. People think that if your smart then a course at uni is the answer. I think that apprenticeships really ought to be more talked about and an acceptable route especially for the "brighter" kids.

    Ben
     
  11. TriggerHappy

    TriggerHappy Obey Him

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    I'm not sure Uni/College is good for much more than a social gathering currently. When everyone can get a "qualification", why bother. Currently we have career students who have started on the path and because everyone has done 3 years they have to do 4 to have any hope of differentiating themselves. Then 4 becomes the norm, then 5, then 6 and so on.

    As RazzleUltra says, it needs to be elitist to an extent, but not due to financial constraints or background.

    With regards to working your way up, I would suggest that there is many a graduate starting from the very bottom of the job pile anyway.
     
  12. Samsonite

    Samsonite Mine's a frosty one

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    A couple more things to throw in.

    Some jobs require degrees, so maybe we need to differentiate between those careers. You can't become a doctor without doing a 6 year course at university. My girlfriend had to do a PhD for her job, so she had to do a 3 year BSc and then a 3 year PhD. So, what I am saying is that some people actually have to have a degree to do certain jobs and often important jobs.

    From my own point of view (regarding career), I did not really need the degree, but it helped (e.g. I applied for jobs that required a ComSci degree). Adversely, I took a gap year before uni and was offered a graduate placement instead of uni which meant I would be treated as a graduate at the age of 19, but I still went to uni - I may well have done even better if I had stayed.

    Uni was worth it in my opinion not only for the social aspect and the freedom of living with mates and having fun, but from a career point of view. I learned a load of cool things relating to computers that I would never have known about and more importantly I realised that working in the games industry was not for me - I had an 80s romantic view of writing games by myself or with a couple of others and making millions like they used to, but discovered that you can lose your job if a project flops (this happens a lot) and you are a small cog in a 100 strong development team and you don't get to really see the fruits of your labour first hand like you used to. So it is the same as working on a financial application unless you are a graphic designer or something.
     
  13. ArTizan

    ArTizan Member of the Month

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    Wow Samsonite that a strange coincidence - I also went to Uni with a view to extending my career into games development but after 3 years of it and researching the industry decided it what not what I wanted to do, for many of the same reasons you mention.
     
  14. Samsonite

    Samsonite Mine's a frosty one

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    It's a shame it's that way on the one hand, but I also really like the big, well produced games, so we can't have it both ways!
     
  15. DarkEntity

    DarkEntity Im Skint, Bugger Off

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    My opinion is that everyone should pay to goto university, if they graduate you get the cash back, if you bomb out you loose your cash, that cash then goes toward covering everones time you wasted by being a loafer.

    Also get shot of the pointless courses, if as above u need 2 Ds to get in send em back to school to do it (again at a cost) to the student, if you then pass you get the cash back, if you fail....say goodbye to your money.
     
  16. Kermit98

    Kermit98 Regular Kustomer

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    I'm failing to see what is so unfair about the proposed system. Really they shouldn't call it a tuition fee, but "maximum potential we'll take back as a graduate tax".

    Say they charge £6000 per year, 3 year course = £18,000
    All this is tied up in a loan that is done automatically though the SLC. The student never actually touches the money or the bill while they are a student.

    They (hopefully) graduate, they then pay back 9% of what they earn over £21,000 (currently £15,000).

    So say they get a decent job paying a good wage of £25K, they would pay back £360 a year. Assuming they never got a pay rise (which you would expect they would) they would pay back £10,800 by the time they hit the 30 year time out window.

    So makes no odds while they are a student and unless they do really well as a graduate (so they would be able to afford it anyway) hardly any money gets taken off them afterwards.

    This is being treated in the same manner as mortgage or credit card debt where lack of income could cause a default and all those sort of things, really it isn't, its more of a potential tax.


    Anyway, my two cents....

    P.s. Maybe we should add £100 to every student's fees for every police van they wreck :D
     
  17. Fat Jez

    Fat Jez Master of the High Five!

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    Don't forget to add on whatever student loans they take out just to live over the course of the year, in terms of what they have to pay back and also the effect it can have on applying for a mortgage.
     
  18. MNA

    MNA What is a forum?

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    I have a student loan and doesnt effect me at all im just happy i have a job as a result of it. I applied for a mortgage (170k) and it didnt effect me what so ever.
     
  19. Kermit98

    Kermit98 Regular Kustomer

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    That is no different to the current situation, do what most responsible people would do and get a job. In the 3 months over the summer you can earn £2-3K working in a call centre (what I did) and gives the student some valuable work experience for when they graduate. While this doesn't cover the entirety of your costs it certainly is a big chunk of it.

    I don't know what the allowance for the living on part is now, it used to be just under £4K

    I'm not saying that University isn't a long term financial commitment for a student, but if you don't think its worth paying less than £500 a year back, don't go.

    RE: Mortgage, I was under the impression that it doesn't make a big difference to applications as it is not a credit risk (i.e. if you lost your job, they mortgage would not be competing with SLC to get their money back).

    I suppose the only thing I can say that would be considered "pro-student" is that I would be happy to the SLC to only charge interest at the rate of inflation rather than above it (I, like many other graduates were screwed on that a few years back).
     
  20. Beatdown

    Beatdown Super Kustomer

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    i think the raise in cost is a good idea. it will make new potential students and party go-ers think twice about going to uni and leave more room for the people who should actually be there.

    and what are they all doing out of class!? they should be learning, not causing riots! this is the behaviour im talking about. they are wasting peoples time.