Reform Scotland


University graduates should contribute towards the cost of their higher education as a deferred fee to be paid once they earn more than the average Scottish salary, a leading think tank recommends today. 

Reform Scotland says higher education cannot be seen as a ‘free entitlement’ in the way that state school education is and paid for entirely by the taxpayer.

‘Higher education is something that has to be achieved academically, but it is not fair that those who go to university have their time there subsidised fully by tax payers, many of whom have not had that opportunity,’ it says.

The call for a deferred graduate contribution is one of a number of radical recommendations put forward by Reform Scotland in a report entitled Power to Learn. They include:

? Abolition of the Scottish Higher and Further Education Funding Council [SHFEFC] with its functions transferred back to government.

? Making the Scottish Qualifications Authority [SQA] a fully-independent charitable trust, with the accreditation arm retained by government.

? Long-term plans to scrap means testing of student loans, enabling all Scottish students to claim the current maximum £4,625 a year loan.

? Expansion of the current scheme to allow more pupils to study at colleges.

? Make it a condition of grant that HEIs are willing to take transfer students who have successfully completed HNQs into later years of study on a degree course where the subject content is comparable.

The paper, which concludes that the current economic crisis underlines the need for major changes to further and higher education funding in Scotland, says fairness is the underlying principle in its proposed reforms.

‘At present, there are those who are academically able but financially unable to go to university but pay taxes which subsidise those who do go to university. While it is true to say that society as a whole benefits from having a well educated workforce, the individual graduates themselves also benefit from the higher earnings they accrue,’ says one of the report’s authors Geoff Mawdsley.

The report says that scrapping SHFEFC – a move that is in keeping with Reform Scotland’s earlier paper Democratic Power which called for the abolition of most quangos – and returning its functions directly back to government would make the system more accountable.

On making the SQA an independent body, the think tank points out that currently it is the national accreditation and awarding body in Scotland, including the provision of qualifications to colleges. But the SQA is not the only provider of qualifications. City and Guilds, a private company, is one of a number of other bodies which also issue vocational qualifications. Since these tend to be developed in conjunction with industry, standards remain high.

The report, calling for the accreditation arm of the SQA to be handed over to government, adds: ‘There is no requirement for a state provider of qualifications, especially one which has such a clear conflict of interest by both accrediting and awarding qualifications.\’

On its proposal for a deferred graduate fee, the report points out that only wider society pays for the benefit of graduates through the tax system, while the graduate does not contribute.

‘Although graduates may earn more and subsequently pay more tax, many successful top rate taxpayers may not have gone to university, so higher tax contributions should not be seen as payment towards higher education.

‘There needs to be a better balance where the individual graduate as well as tax payers contribute towards education.\’

Reform Scotland believes that with a deferred fee scheme, the Scottish government would continue to fund a set proportion of the average cost of a degree course – depending on the student’s chosen subject – with the rest funded by the graduate.

However, the deferred fee would only be re-paid once the graduate is earning more than the Scottish average salary (£22,958 in 2007).

The report says there would be no need to create a new mechanism for collecting the deferred fee as the existing system involving the Students Loan Company currently used to collect student loans and what is left of the graduate tax could be used.

The report concludes: ‘While we believe that it makes for a better, and fairer, system of funding higher education if graduates contribute towards the cost, the economic situation also backs up the case for change.

‘Higher education is not “free”; rather it is paid for by taxpayers. Before universal services such as healthcare or policing are targeted, it is only fair that the current system of university funding, which sees the less well-off contribute through their taxes for the better-off to go to university, is reviewed. Indeed under the present funding model students expect to earn much more after graduation than many of those who are subsidising them.\’