A properly designed ‘graduate contribution’ could work well for UK students and higher education: even though the original ‘graduate tax’ proposal is a terrible idea

First mooted by Vince Cable last month, the discussion of a possible ‘graduate tax’ policy has caused much disagreement within and outside of the coalition. The Liberal Democrats support it because it would make student fees disappear, but the Tories fear another ‘stealth tax’ on the middle classes. Nicholas Barr takes an in-depth look at the proposed graduate tax and shows how the earlier graduate tax would never work, but a modernized form of graduate contribution would deliver many benefits to students, parents, universities and UK government.