educationet. The Grass Roots UK Education On-Line News Service

Top-Up fees via Grad Tax, what a surprise!

So the education White Paper has been leaked a week before it is published, and with the predictability of night following day -well we predicted it, the preferred option seems to be top-up fees via graduate tax, with the tiny sweetener of 'grants' which will be smaller and less accessible than they were on abolition in 1998. And as could be expected for a Government that has a record of talking big about inclusivity but delivering little, if as expected the whole system of tuition fees moves to graduate tax, it will be the poorest who get stung the most. Although the change is not billed as a 'graduate tax', what else can a repayment which is admistered through the tax system be called?

It seemed obvious to all that upfront top-up fees were a non-starter, and that students across the UK could hope for a hybrid version of the post-Cubie Scottish funding model. The only question was how much would the fees be. Well the answer seems to be around three times more than they are now. Yes, that's three grand per year, so that's a grand total, if your university is able to charge the top rate of fee of Ł9,000 for a three year course. Oh and the minor matter of your loan too. So if say you were at Imperial who obviously want to charge the maximum fee they can get away with and you got the London weighted loan you're looking at Ł21,000 worth of debt. Sorry, not debt, 'future tax'. No not 'tax', 'tax office administered repayments'

Charles Clarke reckons the 'Average Civil Servant' would pay Ł60 a month back, meaning that, without accounting for any interest charges, it would take over eight years to pay back Ł27k. With interest, well over ten. And that's if you are lucky enough to earn what the 'Average Civil Servant' takes home. Although the leak, and even the actual release of the document in it's entirety this week may make it seem like things are actually happening, legislation could be as far away as after the next election.

In terms of the actual top-up element, the limits of Gordon Brown's influence will ensure a 'regulator' or participation watchdog to make sure universities introduce packages to help students from low-income families. If this is in place, they will be allowed to introduce differential fees, based on what they think they can get away with, up to an extra Ł3k per year. It may well transpire that universities end up taking on their own version of means-testing for top-up fee payments, but whatever they do to encourage students from low-income backgrounds will have to outweigh the fact that the 40% who currently pay no fees whatsoever will now have to pay at least Ł3,500-ish worth of basic tuition fees after graduation, plus their loan. Any decision to allow Universities to set the rate of any top-up could well mean that students at the same university could be paying wildly different fees, dependent on their course.

There is only one problem with this plan facing Clarke, Blair and the boys, their own manifesto. For some reason none of the mainstream news providers have picked up on this one, but the 2001 pre-election manifesto clearly says 'We will not introduce top-up fees and have legislated to prevent them.". Not we will not introduce up-front top-up fees, we will not introduce top-up fees FULL STOP. Almost 150 Labour MPs have signed an early day motion against top-up fees and Blair is sure to get a revolt as those backbenchers know it is their marginal constituencies which will be on the line if they sell out on student funding again, after Blair had said a fortnight before the 1997 election that his Government would not introduce tuition fees.

Back in 97-98 many backbenchers simply shrugged their shoulders at the proposal to introduce fees and abolish grants, thinking it must be for the best, and slightly overwhelmed with their new found high office. However, many have now had enough. Newcastle Central MP Jim Cousins, said:
"It would discourage many families in the region from thinking about going to university and this would affect the local universities who, to an extent, rely on them. Stopping or discouraging the region's children from going to university is dreadful and I would, of course, vote against the Government if it came to it."

Currently there are a total of 253 MPs who have declared their opposition to top-up fees. If the Tories (probably next week) decide to take the opportunity which has been presented to them and instruct all their 163 MPs to vote against top-up fees, opposition will be 380 in the commons, meaning Tony Blair would be in a minority for the first time since he came to power. The Government are hoping that their rebels can be brought round, but also will know that even without top-up fees, graduate tax on it's own will net far more money to the treasury.

The way round this minor problem, is that they are planning to do in in 2006 if they get re-elected when their manifesto 'committment' expires. Surely the white paper therefore is just an instruction to every student in the country in four years time to vote for someone else?

The justification again came from Minister for HELL, Margaret Hodge, who is still touting the line "Graduates earn Ł400,000 more than non-graduates over a lifetime.". Of course this figure includes people who when they went to university less than 10% of the population did, not the 50% the government aim for. This argument is of course always self defeating when, as are now, repayment thresholds are set around 80% of national average wage. The new threshold is rumoured to be Ł15,000. Although not being specific, Clarke has indicated thresholds would rise, and would not say what the interest rate on debts would be. Now all we can do is wait and see what the damn thing actually says.

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