Graduate tax 'could replace tuition fees'

Date: 14th July 2010

University graduates in the UK could face increased taxation upon leaving education under new Treasury proposals.

Currently, the majority of university students pay their tuition fees, roughly £3,000 per year, by acquiring a loan which is paid back once they are employed.

However, the Treasury has announced plans to replace the system with taxation.

Under the proposed changes, tuition fees would be scrapped and instead graduates would pay a new tax on their earnings once they start work.

Lib Dem peer Lord Willis, who has discussed the proposals with business secretary Vince Cable, told the Sun: "In the current climate, students should pay for the huge advantage they get from their education.

"The best way would be some form of graduate tax which you start paying once you earn more than £20,000 and would last for 20 to 25 years."

The National Union of Students has recently called for changes to the system, claiming that if tuition fees rise to £5,000 per year, students will graduate with around £26,000 worth of debt.

Posted by Jacob Williams