Cable: Repayment should be tied to earnings
Business secretary Vince Cable comments on the graduate tax:
“Students may have to pay more but that is only part of the answer.
“The reality is we are going to have to develop a model in which the balance of funding for higher education in England combines less public support and more private investment from those who benefit most from it.
“The funding model must ensure that well-performing universities receive a reliable stream of income, less dependent on the state, and that students see the system as fair – or fairer.
“I am interested in looking at the feasibility of changing the system of financing student tuition so that the repayment mechanism is variable graduate contributions tied to earnings.
“The system should change so the repayment mechanism is tied to earnings – so that maybe lower earners pay not more – maybe less – and higher earners pay more.
“The principle we’d be looking at is the so-called graduate premium, the extra earnings that we have as a result of being a graduate.
“If you’re a graduate, on average you earn £100,000 net of tax over your lifetime more than if you’re a comparable non-graduate.”
