Interesting idea for a Graduate tax

From the FT

Under the policies floated by the Tories, undergraduates would pledge to pay a share of their future income to the universities they attended as part of their fees

Now I haven't seen the detail of this policy suggestion but it seems to me to be a good idea.

Particularly if the money did not go to the University but to the department.

Thus it would be administered by the University, but the money would be then filtered to the specific department.

If the payback started at a higher rate than the student loan, say £25,000 pa earnings, with a 1% tarrif after that, then degrees that resulted in jobs would receive more money than those that didn't.

So most Mickey Mouse subjects would get less funding, but the trdaitional academic subjects would do well. Most Classics graduates I know have gone onto good jobs for example.

And if, for example a University has a successful Greens Management course that is respected by the Golf Clubs of the world, then they would get more funding too.

That being said you will get the whiffle of fear from the Statists,

This contract would basically involve a student pledging a slice of their future income to a university in return for their education. The advantage over a graduate tax is that the system would cut out the government as middle man — the funding would go straight to the university from the student, rather than via the Treasury.

The trouble with this is the implementation. Is it wise to give universities independent revenue raising powers? And how would they enforce the contract? Just imagine the complication with overseas students, who would have to be offered the same terms as UK students.

Yes it is wise to give Universities freedom, of course it is. They would enforce the contract exactly the same way everybody else enforces contracts. It is that hard. Only the Student Loan Company, a Quango seems to have problems.

Why would Overseas students have to be offered the same terms as home students (barring EU law that is) they could be charged more up front and waive the post leaving tariff.

Hey who knows some Universities could do this and others might not, relying on State grants. Some might set higher tarrifs than others. They might add the concept into the mix with bursaries and scholarships.

The nmore I think about it, the better it seems.