Today business leaders have warned that because of graduate tax tens suggested by Vince Cable, thousands of UK top graduates would emigrate if the ministers would continue making plans for charging graduates for their degrees. Nowadays the government lends money to students to pay for their degrees but as soon as they earn nearly £15,000 a year, they should pay this money back. There is no difference what their profit will be, however students with lower income are not to pay as quickly as those on high wages.
If the business secretary’s plan is realized, students with higher salaries will pay more for their degrees than they pay nowadays to help those who will find low-paid jobs.
According to the custom essay by Richard Lambert, director-general of the CBI, business leaders have come to a conclusion that a graduate tax would cause more problems than it solved. He said: "If we had [this tax], UK students would have an incentive to work overseas to escape paying, especially when the top rate of tax is 50%. And how would you get EU students to pay for their degrees?"
Under a graduate tax, the government fees would be paid directly to the universities and the government will not lend money to students to cover the cost of their degrees any more. Richard Lambert added: "A graduate tax would undermine universities' autonomy – part of what makes them great. It would just become another stealth tax."
The CBI taskforce considers that the government should continue to lend money to students so that they could cover the cost of studies and then pay as soon as they earn their first £15,000. However, Lambert suggests that the government could charge students a higher rate of interest, while now they charge almost a zero interest rate on the loans.