The Business Secretary, Vince Cable has triggered a mixed reaction after saying that university students will “almost certainly” have to pay more towards their education, in contrast to the Liberal Democrats' previous approach.
But he added that he wants to look at the possibility of a graduate tax through which students would repay tuition fees.
Cable made the comments at London South Bank University this morning (15 July). Following the speech, the University and College Union (UCU), which represents academic and teaching staff, said that the government needs to “clarify” its policies on higher education funding.
Universities are expected to experience major cuts as a result of the coalition government's recent budget. The UCU and the National Union of Students (NUS) have both warned that this is likely to result in even fewer students entering university from working class backgrounds, thus exacerbating economic inequality.
Measures already proposed by Cable include two-year degrees, more part-time study and more students living with their parents.
Full-time undergraduate students currently pay tuition fees of £3,225 a year. The money is lent to them by the government and they begin paying it back once they are earning at least £15,000 per year. The Browne Review into funding, which is expected to report shortly, is widely predicted to recommend an increase in fees.
But Cable told his audience that he wanted a “radical rethink” of university funding. He said he would like to consider the "feasibility of changing the system of financing tuition so the repayment mechanism is tied to earnings”.
Speaking to the BBC, he suggested that the current system was unfair because "if you're a school teacher or a youth worker, you pay the same amount as if you were a surgeon or a highly-paid commercial lawyer”.
While the National Union of Students (NUS) gave a cautious welcome to the idea of a graduate tax in principle, there are concerns that Cable linked his suggestion with repeated comments about “severe financial pressure”. He said that students would “almost certainly” have to pay more.
Linking this to the idea of fairer repayment, he suggested that, "by looking at how and when and at what levels contributions are made, it may be possible for low earners to pay not more or even less and high earners pay more”.
Cable, like every other Liberal Democrat MP, signed an NUS pledge prior to the general election promising to vote against any increase in tuition fees. Under the coalition deal, the Conservative Party has agreed to respect the freedom of Liberal Democrats to abstain in votes on student fees. But the former Liberal Democrat leader, Menzies Campbell, has suggested he will consider defying the whip and voting against a fee increase.
It is possible that the government has hit on the notion of earnings-linked repayment as a way of going ahead with a fee increase while keeping the support of Liberal Democrats who will expect at least some changes to make the system fairer.
In response, the UCU said it would “judge any new plans on whether they increase the overall cost of getting a university education or reduce it”.
UCU General Secretary Sally Hunt said, “Whether or not graduate debt goes up will be the key test” of fairness. She added, “The government must understand that it simply cannot rebrand student debt as a graduate tax, nor should it expect students to pick up the bill for its punitive cuts agenda."
In reference to the Browne Review into university funding, the UCU said that they were “surprised that the government appeared to only now be asking Lord Browne to look at a graduate tax”. They said this raised questions about “what the review had been doing if not exploring all the options”.
The NUS President, Aaron Porter, said fees should be abolished altogether and replaced with a tax on graduates based directly on earnings. The UCU repeated its call for business to “pay its fair share towards higher education” by raising corporation tax to the G7 average.