Why YOU should pay more for uni

27 November 2008

To no one’s great surprise the latest report on graduate earnings shows that those with science degrees and those with degrees from top universities will on average earn much more over their lifetime (see TCS, news in brief pg 2). It is, of course, quite obvious that members of the Russell group will produce a greater number higher earners, just as it doesn’t take a rocket scientist to work out that most rocket scientists will be better paid after graduation than arts students from ex-polys. The question that really matters is what we should think is entailed by the (now empirical) truth that some degrees are worth much more in terms of future earnings than others?

This issue, we feel, is inextricably linked to the question of how we should fund higher education. If a law graduate’s degree will eventually lead to earnings in excess of £100,000 p.a., should they really be paying the same for their qualification as someone who earns £25,000 p.a. after graduation and is saddled with insurmountable debt?

Before we are mobbed by protests (justifiable ones) that not all law graduates end up as millionaires, we should emphasise that we are not advocating degree specific price-brackets. Rather, we suggest an entirely new approach – progressive graduate taxation. This system would work on the premise that, since some graduates are likely to earn much more over their lifetime than others (as the link between degrees and earnings proves), individuals should be taxed according to their earnings subsequent to graduation.

This means that higher education would be free at the time of study. With the right fiscal framework we could ensure a much needed increase in funding without pricing students from poorer backgrounds out of the “market”.

Herein lies the argument for the graduate tax to be instituted, whether progressive or not. We already have a form of graduate tax: they’re known as top-up fees. These are nothing more than a deferred payment on future earnings. The value of a graduate tax is the elimination of an idea that plagues access schemes: that a university education costs something up-front.

There are, we admit, some potential objections to this system, but we will do our best to rebut them. One might claim that the hard work and ability of top graduates should not be taxed more than any other graduates; if anything we should reward high achievement. This argument rests on two basic misconceptions.

First, there is no reason to think that those who do well in arts subjects are any less talented or hard working than their higher earning scientist contemporaries. Second, one should appreciate that, even with a marginally higher tax, graduates of top universities will still continue to earn much more over their lifetimes than those from other universities. With this in mind, the progressive graduate tax is also immune to the charge that it might disincentivise competitive degrees or top grades.

Progressive graduate taxation may well seem like anathema to Cambridge students who will no doubt be among the higher earning section of the population within a decade of graduation. Nonetheless we should remember that those who attend less prestigious institutions are paying the same amount for a degree that is worth, in purely monetary terms, far less. The reform and expansion of higher education funding is crucial to the future of all universities, Cambridge included. This cannot be ignored. But a system that fairly considers how much a degree is ultimately worth will mean that no one need feel excluded at the outset, nor financially disadvantaged in the long run by their choice of course.

Pete Jefferys is TCS Comment editor and Matt Horrocks is TCS Editor in Chief.