Justine Greening backs calls for graduate tax in England

Students in England should pay for their university education via a graduate tax, not through tuition fee loans, former education secretary Justine Greening says.

Ms Greening, who was ousted as education secretary last month after reportedly opposing cuts to fees, has backed the creation of a national higher education fund that all graduates would pay into over a 30-year time period. Ms Greening suggests that the levy could operate in a similar way to the existing loan repayments, where graduates over a set income threshold – £25,000 from April – pay 9 per cent of their earnings above this level.

However, making everyone contribute for the full three decades – a change from the current system, where higher-earning graduates pay off their loans sooner – would ensure that those who earn the most would pay the greatest amount, Ms Greening writes on her website. Under the current system, graduates from the poorest families leave university with the largest debts.

And, especially since the proportion of graduates in the population is likely to increase, such a system would allow the costs of university education to be “spread more thinly”, Ms Greening says, effectively reducing the cost of higher education to individuals.

“These reforms mean that those graduates from disadvantaged or from better off backgrounds who want to go into public service or socially valuable but relatively lower paid roles…will not do so with an impossible debt hanging over them,” Ms Greening writes. “Likewise, those that do the best financially from their degree – again, irrespective of background, will contribute the most into the higher education fund to continue to finance a world-class higher education system for current students.”

Employers could contribute to the higher education fund to support degrees that are critical to their organisations, for example, in science, technology, engineering and mathematics subjects, Ms Greening says.

She adds that this system could save more than £100 million by ending the role of the Student Loans Company in calculating repayments and interest, and would make it easier for prospective students to understand whether getting a degree is worth it.

In the article, Ms Greening also says that maintenance grants should be reintroduced, arguing that replacing them with loans was “regressive”. 

The intervention comes as prime minister Theresa May prepares to launch a review of higher education funding in England.

sophie.inge@timeshighereducation.com