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Dublin: 7 °C Saturday 18 May, 2013

Poll: Is a graduate tax a good idea?

The government is reported to be considering a graduate tax to pay for third-level education. Good idea? Bad idea?

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THE GOVERNMENT IS reported to be considering a graduate tax as a way to pay for students attending third-level education.

According to today’s Irish Independent, Minister for Education Ruairi Quinn is considering a system which would see college fees effectively scrapped with the costs of college paid for by the State. Graduates would then pay back the costs over a period of around 15 years.

Proponents of the current system say third-level education should remain free, but opponents say that the bill for third-level education is rising and someone has to pay.

So we’re asking: is a graduate tax a good idea?


Poll Results:






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Comments (76 Comments)

  • Whats the american model to pay for education?? Whats the UK one??

    In the uk the student get a government loan and the loan is paid off when the student is working, taken directly out of his/hers wages. There not out of pocket but there education is not free & every student has a equal chance of going to college!!

    Reply
    • Here in Sweden it’s the same, but unlike the USA the interest rate is a manageable 0.5%. In the USA its frigging crazy amount, and if you go bankrupt that excludes student loans, which can end up in the 100′s of thousands if you’re not careful.
      Having said that, University is 100% FREE in Sweden, so if you get student loans it’s for cost of living, paying for books etc…

      Reply
  • Graduates earn more and therefore will pay higher portion of their income in taxes. (Is the government actively encouraging graduates to emigrate?).

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  • Problem in Ireland is that all our new graduates leave giving nothing back to the economy!! They are now in USA, OZ, Canada, UK and Dubai!! Government needs to entice them back home.

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    • I’m a recent graduate and I am paying taxes in this country, your statement is just simply not true

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    • Mark your in denial just because you have not left doesn’t change the facts thousands have

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    • I’m not in denial, I was saying that the above statement was not true. true, graduates have left (but not all of them), I personally know a lot of recent graduates working and paying taxes. Some have left, but also, foreign graduates are coming into the county as well. How is this denial?

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    • to be fair as someone who is in their final year in college and have many friends who have graduated and immigrated, if I thought their were feasible job opportunities in Ireland then most graduates would love to stay at home, but for the majority of students this isn’t possible so they are forced to leave, or would you prefer if they stayed in Ireland living at home with their parents on the dole?

      Reply
    • Diarmuid,

      They already pay their fair share to the economy – they paid 2,000 EUR per annum to the government. Put differently: what is Fine Gael doing with all this money? Ah yes; paying bondholders.

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    • @ITS Student, ?2000 a year does not pay or cover college fees, and is not a fair share. Third level is heavily subsidised by taxpayer. Take fees for non-EU for an estimate of true cost. Graduate tax is fair and equitable, allows everyone who qualifies to do a course without fear or worry about where fees are coming from, or will they get grant aid etc.

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    • @ Clive Solas: You’re correct, 3rd level education is heavily subsidised by the taxpayer. Typically though, graduates are more likely to be higher-earners and will pay about 20 times more tax than those who did not receive a third-level education (and work in menial labour positions). It would be a discriminatory double-tax, which would be wholly unfair.

      Reply
    • mattoid 17/11/12 #

      @Arch
      20 times more tax??
      Where did you get that figure from?

      Reply
  • sounds very similar to the system in Australia…but what prevents us graduates from skipping the country? So many Australians I’ve met in research do this for a set number of years so the charge is wiped from their records.

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  • It’s tough enough for grads to get set up in life as it is. Having to still pay high rents, high taxes, bail out mistakes of generations past I oppose this. It’s tough to save for things like a car which may be necessary for a job, a deposit for a house etc. I think we should start by slashing costs in third level first. There is huge unnecessary spending in colleges. Lecturer’s salaries would be a start. But I do believe grads should pay something and I think €2k per student per year is enough. It could be paid by themselves through part time jobs if necessary. I don’t think coming out of college with €40k for an avg degree over your head is the best way forward. If you need to specialise, let’s say after completing an arts degree then one might need to pay another €10k-€20k for a masters. Graduates start on avg €22k and being realistic is not very much. Having a degree doesn’t automatically make you middle class or put you on the wealth list.. We got this all wrong!

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  • pure paddyisim.

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  • This idea should be implemented ASAP and seems reasonably fair compared to other tax raising ideas, especially when other countries such as the UK, Australia, NZ, etc. have the same system. Why shouldn’t graduates including those who emigrate pay for their own education? It will decrease the number of drop-outs and people spending up to 10 years in college for the sake of it at the taxpayers expense.

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  • Ridiculous idea. We already pay for our education system through paying taxes and now he is thinking of taxing it again.! Our graduates have enough trouble trying to find jobs without starting their lives with massive debts. This would once again make 3rd level education only the choice of the rich who would not need to finance their education through massive loans

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    • Looking at all the negative comments. But consider this, what if this was brought in as a loan system and the currwnt system of fees were reduced.

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    • Overseas post grads pay up to €30k+ per annum in fees to attend university here.

      How much tax did you pay to contribute towards educating your kids? What is the true cost of education?

      Lots of people pay less than €10k in tax in a year.
      How can that be construed as paying for current and future education?

      We already know teachers are overpaid and get too many holidays having worked very few hours.

      Free education is no longer an option.

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    • “Free education is no longer an option”

      They currently pay 2,000 EUR on college fees. The biggest tax issue rests with the rich who pay little taxes, and corporations who pay an effective tax rate of just 6%.

      the bottom line: let the peasants pay.

      Reply
    • @ITS Student I think you’ll find the €2000 is an administration fee and not course fees.
      There’s nothing stopping you getting rich, is there?

      In the future, students should be given the option of a repayable Government loan (not free grants) if they can’t afford fees.
      €40-60k should be enough per student.

      And the rich can just pay as required.

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    • @ Mad Taoiseach: I can tell you weren’t bothered getting yourself educated and now you’ve got a chip on your shoulder.

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    • So a couple can both bring up a family dont bother trying to get a job just be professional students take up seats at Uni with no intention of ever working .
      While some poor kid leaves school early pays taxes so other people rip him Off at the Dentist Doctors on the free education HE is still paying for,

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    • Exactly, very good point! A loan system is fair and the loan then is automatically deducted out of your wages when your earn a living. The UK model works very well.

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  • What if your self funding? I am a PhD student self funding; will I be taxed? We need a loan system that is tax deductible when you end up working! Fees need to go up to €9000 per year and an interest rate of 1% on the loan.

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  • Why should the people who benefit from a 3rd level education not pay for it. If they are unable to pay there should be funding available to them as a 10 year loan.
    Under the current system those who receive grants are being subsidised by all taxpayers, most of whom will never go to college themselves

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    • Why should the people who benefit from a 2nd level education not pay for it? There are many people who never finished secondary school who are paying for others to complete their Leaving Certificate. The question is not whether university education should be funded by the state or by the individual. The real question is do we really consider education unnecessary for the state’s future recovery and growth. If there had been a loan system or graduate tax system in place when I was attending university I know that I, and many like me, would never have gone to university in the first place.

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    • mattoid 17/11/12 #

      That would be your legitimate choice Brian, but as a non-graduate you could expect to earn considerably less over the course of your career…

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    • Not really a choice Mattoid. Take a look at the current economy, particularly the banking sector. Now, take a look at the entire loans/mortgages sector. If a person is already burdened with a student loan of tens of thousands they will find it exceptionally difficult to obtain any financing for a vehicle or property. The banks are refusing perfectly solvent people with no debts and long-term stable jobs. What do you think they will say to someone at the start of their career (let’s say late 20s) with a loan repayment already over their heads that’s running into the 10s of thousands. Bear in mind that most student loan solutions involve time-frames of 15 years or so. What you are saying is that in future if anyone wants to go to university they will more than likely be precluded from buying a house until they are, say, 37 (most people finish university at 22/23 + 15 year student repayment period). Bear in mind that banks rarely issue mortgages of less than 30 years and you can see a problem. No one is going to want to pay off a mortgage when already in retirement. Add to that the fact that the rented sector in Ireland is a total sham. What will happen will be a ticking time-bomb. On top of all of this, many of our graduated students are simply leaving the country. Once gone, technically they still have to repay the loans, but there is nothing to force them. At the moment the state bears the cost so education institutions don’t lose out. It wouldn’t take many former students to fail to pay (either because of malice or simply inability to pay) and you’ll have a funding crisis in tertiary education, which will more than likely increase fees and thereby prevent even more students from accessing university.

      Reply
    • mattoid 17/11/12 #

      Brian, your concern about being able to secure a mortgage seems a little misguided – who do you think a bank is more likely to lend to, a well educated, highly employable and relatively high earner with good long term prospects (albeit with an outstanding loan which got him/her to where (s)he is) or a less well-educated and relatively low earner with more limited career options? (all the above statistically speaking of course)

      If you think it would be the latter, then as I said it would be your legitimate choice to decide to forego a third level education.

      Reply
    • UK college repayments work like this…..

      “Loans taken out for courses that began after 1 September 1998 but before 1 September 2012 are repaid under the so-called ‘Plan 1′ variant of an income-contingent repayment (ICR) scheme.[20] Repayments do not begin until the April after graduation or leaving a course. Thereafter, repayments are fixed at 9% of gross income above a threshold of £15,000 per (tax) year”

      Seems very reasonable

      Reply
  • Many graduates have no job at all, or have jobs that are low paid and could have been done without having any degrees, never mind one, two or three good university qualifications. In this economic climate you take whatever job you can, if you are lucky enough to find one in the first place.

    Charging somebody an additional tax just because they have one or more degrees is a horrendous idea! Let income tax be determined by one’s income, and not by demographics. What’s next – a suggestion that people in age group A will pay more than people in age group B who will pay more than people in age group C?

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  • This is a great idea once it is managed properly and is not a way to rip off people. Everybody has to pay to further themselves in education and courses so why not students. This will take the pressure off parents and will make drop outs pay for the years that they have signed up to

    Reply
  • The money for 3rd level will have to come from somewhere.

    If the current system carries on then the quality of education on offer will suffer even further, Ireland’s reputation in 3rd level is slipping as it is…

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  • This would amount to nothing more than another tax on the middle class who already pay a disproportionately high amount. It will encourage graduates to emigrate, even IF they can get a job in Ireland.

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  • A tax is a good idea – it will encourage students to enroll in courses that have practical job prospects rather than attend 3 years of waffle and then wonder why their degree in Roman History or Philosophy isn’t impressing employers.

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  • Whoever votes no that the current system is fine, has obviously had no experience with the current system. It is severely flawed.

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  • what about graduates coming in from other countries? do we tax them too for their governments providing them with an education?

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  • A well educated workforce is one of the factors that entices foreign companies to set up here and create employment. Consequently I think that free education is hugely important and I’m proud to live in a country that recognizes the value of it.

    Saying that- there’s no doubt that the investment we’re putting into educating our young is being lost through emigration. We’ve all crossed paths with ‘career students,’ who go to third level for the experience and have no real goal afterwards. They tend to pick ‘quirky,’ courses and enjoy the attention that telling people at parties how they’re studying for a Masters in Origami and that they’re on their 4th University course aged 35. I worked a stand at a careers fair recently and interacted with more than one example of this type of resource drain.

    Education is an investment we as a society make through our taxes- not a hand out or a license to couch surf. I see this potential tax as a legitimate means to separate the ‘study to work,’ from the ‘study to party.’ I would take this ahead of the fees that exclude people any day of the week as long as it was based on payback over a manageable period of maybe the first ten years of employment.

    Reply
  • Tax on income not the educational route you take – a lot of graduates who stay in Ireland will be lucky to get an internship – hardly fair to have an additional tax. And why should university route be singled out over Fas training / apprenticeship for tax? Tax high earners regardless of their educational route. But also we should consider loan scheme for reasonable fees and living costs with fair level of income at which to start repayments.

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  • Do graduates not already pay more taxes? Normally when you graduate you get a better job than you would have if you didn’t. Which usually means higher wages, which in turn means higher taxes!

    The only thing I can see this achieving is less people going to university or more graduates emigrating.

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  • Tax those miserable overpaid (B)ankers instead! Those that are way overpaid, tax them 99% on everything over, say €200k and leave students alone! They (we) and their children will still be paying for the mess the Banks have caused as it is!

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  • Stupid idea as A lot of graduates can’t find work. Tax millionaires and billionaires

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  • A wealth tax needs to be introduced. Since the 1980’s taxes on the top 10% wealthy have been falling. Taxes on the rich are currently at a 20 year low. Bankers pensions can be super-taxed, tax breaks to corporations rolled back, tax exiles abolished by signing agreements with other countries and closing our tax loopholes.

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  • Strongly support this idea. We students need to take more responsibility for our education. In my field jobs are not of a shortage, whole class has a job for next year. That said, I’m aware in other fields that’s not the case.

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  • There has been a student loan system operating in the US for years. The facts are that currently there is more money owed through inability to pay once graduated due to unemployment of graduates,than there is through the entire US credit card system. This is due to the individual amounts owed by millions of students which can amount to tens or hundred of thousands of dollars each!

    Reply
  • There needs to be a choice that suits the individual and provides for everyone. Pre and post educational payment – gift (with a small relief), loan (tightly regulated), tax (private 10yrs @ 1% levy /public 5yrs @2%).

    Most people will go for the tax route purely because if they have no job then they will not be taxed. It can be deferred for two or three years and there should be different rates length if you go into the public service (the country gains from the best brains going to their aid and not to a big law firm).

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  • What happens to someone who qualifies outside the Republic eg at theUniversity of Ulster?
    Would they be liable?

    Reply
  • If I have to pay a graduate tax it’s bye bye Ireland after graduation it will b more taxes out of my pay packet why is it those who are the future been the ones hardest hit in these times for example minister quin before election pledges not to rise fees this has gone out the window n by 2015 fees will b €3000 an increase of a €1000 then he introduces a system of central grants application n this has led to tens of thousands of students not yet receiving their grants and facing financial difficulties people those that are in college are the future why not hit those on high income salaries for example how many grants could be paid if the head of ul gave up some if his 200k a year it’s the students that are penalised for everything

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  • Heres a revolutionary idea; how about the corporatists pay their corp tax?

    Reply
    • Not sure I get your point here Sean. What’s a corporatist?

      Reply
    • What exactly is a corporatist? Do you mean companies liable to corporation tax? If so, I think you’ll find that they are. Or do you believe there is mass corporation tax evasion going on? Or is your actual point that you believe the rate is too low? If you’re going to come up with a “revolutionary” idea it’s usually good to set it out in a way that other people will actually understand what idea you have actually come up with.

      Reply
  • Why is it that all student protests seem to take place during college hours? I find it hard to fathom how people that are so dedicated to their education happily walk out and miss lectures to go out protesting?

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  • Education should be free. The indivfdual benefits. The community benefits. The nation benefits.

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  • Will Ruairí Quinn pay it himself?

    This government have broken the hearts of the people- It is time we have true socialists in goverment-

    A government for the people rather than this crowd who say one thing and act differently

    I’m so sick fo them

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  • I’m in college I’m trying to gain new skill set so I can contribute to society in the future but this shower of jokers in power just place obstacles in us the students way so why should we the students have to carry the burden as those who are on incomes above a 100k a year are not been touched its a case of a social divide I love the negativity shown towards students I can tell you as a mature student college is not all the fun people seem to think it is a small % of people do show this but in all walks of life you get this type of behaviour some of the comments here are just of a cynical nature when you can show me what you are doing then ill shut up but if anybody here complaining that’s unemployed why not do a course retrain and contribute to Ireland’s recovery the students protest during college time last year!!! To gain attention in Dublin during the sitting of the dail and its the students decision if he/she wishes to take part

    Reply
  • rob 17/11/12 #

    One word No. Don’t even consider it u slimy government.

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  • It would be an administrative nightmare and we do not seem to be good a collecting any tax except by Paye. Student loans are a way to go with decent attempts made to get repayments.

    Reply
  • If the graduates were taxed a little bit more when they qualify it could fund the next generation ,provided they got state help getting there in the first place .
    But if families can afford to educate their children then they should not have to pay an extra levy .
    I don’t know how it would work if the students left the country

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  • It’s a great idea to hit those graduates with higher incomes so that those who studied something useless can get away scot free.

    Reply
  • Red Ed 17/11/12 #

    This government couldn’t change a light bulb without pulling the roof down. Leave it out!

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  • poll questions are too ambiguous to get a meaningful answer. ‘No – keep it the same’ could mean people want it free, as your intro currently erroneously claims 3rd level is with fees of 2k+ at the moment and ‘No – but change it’ could mean anything from make it free to introduce full fees! Haven’t voted as a result.

    Reply
  • I’m sort of on the borderline between keep the current system and this is a good idea. Education IS a basic human right and it’s also to the benefit of the country to have the best people qualified for each job, but we do seem to be failing to adequately fund third level (though maybe if the Presidents of the various colleges earned somewhat less and received less bonuses, it might help), so if we do need students to contribute something, this strikes me as the best way.

    Plus I think we have a problem with the current system, as there is an assumption that better-off parents will pay for their children’s education. Obviously most will, but there are people who couldn’t care less. There are also abusive parents who will use the fact that they are paying for their son or daughter’s education to continue manipulating and emotionally abusing.

    Actually, I think the complaint about emigration is more of a good thing about the graduate tax idea. It means if the Government and others get their skates on and improve the economy, then they’ll get more money, but if they fail our young people, then they don’t get it. If young people are failed to the degree that after working hard on their degree, they still can’t find employment in this country, I really don’t think they owe the Government or the rest of us anything.

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    • I prefer the concept of a “graduate tax” to a “student loan” because I think it is different psychologically. People who would worry about taking out loans (i.e. the less well-off who are used to having to budget and not spending what they don’t have) wouldn’t necessarily worry about what level of taxes they’ll have to pay in another ten years or whatever. Being in debt has a negative connotation that having to pay another tax on top of the many we already pay doesn’t have.

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  • Shem 17/11/12 #

    no

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  • What next, primary school tax?

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  • It might have been a good idea when graduates could get jobs. If they do it it should be a loan. If its a tax that can be avoided by leaving. GIven that most will leave the only way to ensure repayment is by a loan. As usual politicians are behind the curve and many of the graduates who have been educated for free have left. Meaning Irish taxes have paid to fund the people who will develop foreign economies and pay taxes in those economies – that didn’t educate them. No wonder we are being lapped up elsewhere. No need to pay to educate your tax paying class – they must be laughing themselves silly.

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  • A new system of means testing should be introduced so that people who can afford to pay for college fees, travel, doctors, dentists etc can pay for the service or pay a proportion of it. 1 system by the revenue. It could be on your photo ID and swipe each time you use it – that would give a breakdown for people to study when budget time arrives.

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  • @ Aoife Quinn the only reason I plan on leaving if this is introduced is so I can gain more finance as a mature student who was in employment for years and paid my taxes I don’t feel it’s appropriate to be burdened with an education tax on top of prsi, universal tax, as well as future taxes to b introduced Ireland wants a Scandinavian tax system with an American welfare system which is unrealistic

    Reply

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