With new jobs for university students very scarce and some still unemployed after one year following graduation, students are finding it more difficult to take on the enormous expense of higher education. The average graduate is burdened with a debt of more than 20,000 pounds. Without government help Britain is in danger of less students enrolling.
The present government student loans are under review. Presently 3,225 pounds is offered to students to assist with tuition and then the student repays the loan after graduation. Business Secretary, Vince Cable would like to see an education tax where the government pays the university directly and the student then is taxed after graduation accourding to their employment earnings.
“It surely can’t be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger,” said Mr. Cable.
The idea has both supporters and critics.
Aaron Porter, explains: “A graduate tax system would give students breathing space when they graduate, unlike the current system which starts loading them with interest even while they study. At a time when the jobs market for graduates is more hostile than ever, the graduate tax system will remain they are paying only what they can genuinely afford.”
Universities fear they will see a slump for several years as they start getting student repayment. With budgets of most already strained they feel this will put a greater burden on them.
Kate Moore of provider Family Investments stressed that parents should start saving when the children are very young and take advantage of child trust funds. The problem is that students may soon be choosing to skip university because of future debt and the solution is that parents, university and government must work together to provide the answer.