Graduate tax to replace tuition fees for university students

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From the Guardian in the UK: Graduate tax to replace tuition fees for university students . So instead of paying tuition now, graduates would pay a higher tax later to pay back the loan for their education. So they would pay based on economic benefit received (higher income) rather than on the input (cost). Government, rather than students, assumes the risk that education is economically worthwhile. An interesting idea worth following.

5 Comments

Would this make the education more affordable?

This would seem to provide an additional incentive for the most financially successful graduates to take themselves, their skills, and their tax revenue elsewhere.

This seems like a terrible idea. It creates the perverse incentive for students to never quite finish their education, akin to what goes on today in Germany. The Brits will have a lot of PSB-like characters turning grey as perpetual university students.

(That's unfair to the legendary PSB, who actually has had a real job at the university for years)

Perhaps graduation would be automatic after some number of credits. The incentive for students is presumably that employers want students who actually finished degrees. Alternatively you tax based on number of credits taken. So if the premium is 10%, if you finish 90% of a degree, you pay 9%. I think the drifting problem is solvable (I don't know if the UK solves it). Emigration is trickier, but that again is a problem for the super-wealthy in any high-tax state. If taxes are only a small premium, may not be worth leaving the country for.

One problem is that this will encourage people to prefer less-useful degrees more, because the more valuable their degrees are, the more they'll get paid, the more they'll get taxed.

OTOH, in the US, we will soon be facing a serious scientist shortfall, because becoming a scientist is as difficult as becoming a doctor or a lawyer, yet pays much less. This tax would encourage people to become scientists instead of doctors or lawyers.

David Levinson

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This page contains a single entry by David Levinson published on July 14, 2010 8:49 PM.

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