Think-tank proposes deferred fee for graduates

25th June 2010 at 01:00
Up-front tuition fees and graduate tax rejected by Reform Scotland in its report on student finance in further and higher education

Graduates should pay for their higher education through a "deferred fee", payable once they earn more than the average Scottish salary (pound;22,958 according to the most recent figures).

The proposal, from think-tank Reform Scotland, is a compromise between up- front tuition fees and a lifetime's graduate tax.

The Scottish Parliament reiterated all-party opposition to any return to up-front tuition fees at the beginning of this month. And the National Union of Students continues to argue that a "price tag" on students would put many off going to university - although evidence produced by the Organisation for Economic Co-operation and Development (OECD) is not fully behind that claim (see panel).

But the recession and the prospect of higher fees bringing extra income to universities in England, following the current review headed by Lord John Browne, is beginning to concentrate minds in Scotland. Sir Andrew Cubie, who chaired the inquiry which led to the abolition of tuition fees in Scotland in 2000, has called for an independent probe into higher education funding; and Bernard King, convener of Universities Scotland, supports a graduate tax.

Reform Scotland's paper on further and higher education, Power to Learn, which also calls for the abolition of the Scottish Funding Council and for the Scottish Qualifications Authority to be broken up, takes a fundamentalist approach to student finance.

Higher education, it contends, "is not a basic public service like school education or health care from which no one should be excluded. Although society as a whole benefits from having a well-educated and diverse workforce, graduates also benefit individually from their higher education.

"At present, only wider society pays through the tax system, while the graduate does not contribute any more to their higher education than anyone else does."

It argues for a better balance between what graduates and taxpayers pay for HE; a contribution from students would also have the merit that they would have to think more carefully about whether they really want to go to university in the first place.

But Reform Scotland argues against up-front tuition fees on the grounds that they would deter those from less well-off backgrounds from applying to university, and it opposes a graduate tax where the individual pays indefinitely as "equally unfair" since the graduate could end up paying more than the full cost of their course.

One problem identified in the report is: what exactly are these course costs? It calls for an in-depth investigation to find out the true costs of a degree before decisions are taken about what the student should contribute and how much government should pay.

Annual fees charged by universities for full-time undergraduate courses vary widely - from pound;8,500 for arts courses at Dundee to pound;11,750 along the road at St Andrews, and from pound;10,395 for laboratory-based degrees at Napier to pound;30,400 for the final years of a medical sciences degree in neighbouring Edinburgh.

Once these costs are clarified, Reform Scotland believes deferred fees should not deter anyone from entering higher education, because the amount would only be repaid on a scaled basis after the individual earned more than the average and would not need to be repaid at all if the earning threshold is never crossed.

The think-tank also calls for a shake-up in the financing of students' maintenance costs, which are covered by loans. All students presently can take out a basic loan of pound;915 a year, and an additional pound;4,152 is available but is means-tested. They have to start repaying their loan from the April after they graduate or leave their course and start earning - from pound;7 a month on gross income of pound;16,000 a year to pound;150 a month on a pound;35,000 salary.

The paper suggests that the extra income from the deferred fee should be used to allow all students to claim the full loan, without it being dependent on income.

The other main plank of the Reform Scotland plan is to force universities, particularly the older ones, to allow more students on to the later stages of a degree course once they have successfully completed a Higher National diploma or certificate. This received strong support from Scotland's Colleges.

The paper calls for this to be made a condition of the funding council's grant to universities, to avoid students "unnecessarily having to undertake up to three years more study, along with the increased costs associated with that". But the report acknowledges that the subject content of HN and degree courses have to be "comparable".


The evidence produced in last year's annual Education at a Glance report from the OECD does not point conclusively to fees as a deterrent to university entry, or to the absence of charges as an incentive.

The two countries with the highest participation in higher education, Australia with a rate of 86 per cent and New Zealand with 76 per cent, each require a student contribution. At the other end of the spectrum, in Ireland, the Government has abolished tuition fees and only has a participation rate of 44 per cent.

There is a middle group of Nordic countries - Iceland, Sweden, Finland, Norway and Denmark - which do not charge fees but whose participation rates vary considerably, from 73 per cent in Iceland to 57 per cent in Denmark.

In addition, the regular figures from the Ucas colleges' and universities' admissions service do not reveal any appreciable differences north and south of the border. By-mid January, there was a 31.9 per cent rise in the number of applicants from Scotland for Scottish universities next session. But England was not far behind, with a 22.2 per cent increase in university applications from students living there.

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