The Creative Society is an arts employment charity that helps young people into jobs in the creative and cultural industries.
National Union of Students calls for graduate tax to replace tuition fees
As new figures suggest that up to 40,000 of this summer’s new graduates will be without work in six months’ time, the National Union of Students has called for ministers to abolish university top-up fees in favour of a graduate tax. It’s a good idea, but it will take time before the effects are felt.
The graduating class of 2009 are the first group of students to have paid £3,225 per year top-up fees and will enter the workplace as the most indebted university leavers in history. To compound matters, they will soon enter an employment drought that may, according to current predictions, push under-25 unemployment past the million mark before the year is out.
Against this rather bleak backdrop the NUS is lobbying government to scrap tuition fees altogether. Under their plan, students would pay for their education after graduation by contributing to a national trust- between 0.3% and 2.5% of their salaries each month- for the next 20 years.
The contributions would vary depending on a graduate’s salary. A graduate on £40,000 would pay £125 a month, while someone on £16,000 would pay £5. The trust would remain independent of government and would be administered by the Higher Education Funding Council for England (Hefce). The NUS argues their plan would provide not only a fairer system for all but would raise larger sums of money.
At the same time however, universities are pressuring government to lift the current cap on tuition fees, allowing them to set (and largely increase) their fees individually, in an attempt to mitigate the rising costs of providing higher education.
The NUS argue that under their plans, graduates would be giving the trust £6.4bn a year within 20 years. Conversely, the revenue from fees, if universities were to charge their proposed £5,000 a year, would be £6bn.
But what of the deficit until then? It will of course take twenty years of graduate payments for the trust fund pot to swell sufficiently for it to fund the nation’s universities. To cover the shortfall, the NUS calls on the government to contribute to the trust the £4.5bn a year it would have lent students through the Students Loan Company.
The argument is persuasive and the economics seem sound. It will be interesting to see how Peter Mandelson, the newly appointed Secretary of State for the newly created Department of Business, Innovation and Skills reacts to the proposals. He today described investing in universities and colleges as being “as fundamental as electricity to a modern globalised economy like Britain”. A Higher Education policy review is expected soon.