Call for an ‘all-age’ graduate tax to help ease cost of fees

GRADUATES who attended university for free should start paying towards their cost of their degree, a research paper suggests.

A new study calls for the introduction of a new “all-age graduate tax” which is paid by everyone who has a degree, regardless of when they studied or how much it cost them.

The proposal would help to cut the amount that today’s students pay to go to university and increase funds raised for the public purse, according to the authors.

Researchers at Centre for Research on Learning and Life Chances (LLAKES) at the UCL Institute of Education set out proposals for a graduate tax, which they suggest are a mid-point between the current fees and loans system and a general election pledge by the Labour Party to scrap tuition fees altogether.

Under the current system, students can get governmentbacked loans to cover their tuition and living costs, when they they begin paying back once they are earning over £21,000.

Any money not paid back after 30 years is written off.

The new paper proposes two forms of graduate tax.

It makes calculations based on the tax being paid by English and EU graduates, working in England, aged 20 to 64, who had their degree subsidised by the government, as well as tax allowances for the 2016/17 financial year.

Under the first scheme, graduates earning at least £25,000 would pay 2.5% of their taxable income less personal allowance, while under the second, graduates would pay 2 per cent of their taxable income in the basic tax rate band, and 3 per cent on anything over this.

There would be a tapered increase up to these percentages starting once graduates were earning over £21,000.