Experts not fooled by ‘graduate tax’ label

Link: Graduate tax on the way

This week senior ministers are busy trying to convince rebel Labour MPs that government plans to introduce a system where universities have the option to charge students an extra £3,000 a year will not undermine poorer families.

And the government is desperate to rid itself of the term ‘top-up fees’ for the more acceptable ‘graduate tax’ label.

But Chas Roy-Chowdhury, head of tax at ACCA, said the change in terminology was ‘spin’, and the proposals could not be seen as a tax but a ‘surcharge on learning’.

One way that students have been dealing with their debts is to take the bankruptcy option, and Nick Hood, partner at business recovery firm Begbies Traynor, is seeing a ‘definite upturn in student cases’.

Although he doesn’t think students should declare themselves bankrupt, the firm is processing the cases. ‘By the time they get to us, they have already decided to go bankrupt,’ he said.

But this course of action will not be around long, after the Department of Education and Skills announced in its Higher Education White Paper, released earlier this year, that students would have to pay back loans even if they declared themselves bankrupt.

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