UK: Treasury examines possibility of graduate tax

The Treasury is examining the possibility of introducing a graduate tax for students rather than raising the tuition fee cap, writes Patrick Wintour for the Guardian. Its work is at a preliminary stage, with Lord Browne's report on how to finance higher education due in the autumn.

The graduate tax might have political benefit for the coalition since the Liberal Democrats fiercely oppose raising tuition fees, and four of the five Labour leadership candidates have backed forms of graduate tax, thus making the proposals more consensual than uncapping tuition fees would be.

Advocates of a graduate tax say there is a psychological difference between having a £23,000 debt (the average graduate debt, according to the National Union of Students) paid back over many years, and paying the same amount in extra income tax over the same number of years. Browne is expected to call for the £3,225-a-year tuition fees cap to be raised.
Full report on the Guardian site