A tax on graduates - the global picture

Scotland

Following the Cubie report commissioned by the new Edinburgh Parliament, upfront fees were abolished and students became liable to pay a graduate contribution totalling £2,000, collected through the tax system once their income reaches £10,000. A limited form of grant was reintroduced for the poorest students. Applications to Scottish universities have held up better than those south of the border. Scottish students applying elsewhere in the UK have to pay tuition fees, as do students in England, Wales and Northern Ireland applying to Scottish universities.

Australia

Higher Education Contributions Scheme introduced in 1989 at A$2,000 per student, payable upfront at a discount or after graduation through a loan. Zero real rate of interest, repayments through tax system. Brought in extra resources; did not alter the proportion of students from poor backgrounds. In 1996 differential fees introduced - subjects such as law expected to lead to higher earnings cost more than others. Universities allowed to recruit 25% extra "free market" students who did not get HECS loans - criticised for allowing less bright students from wealthy families to get into top universities. In 1998 the West report suggested universities should have freedom to set their own fees but so far this has not been acted on.

New Zealand

Universities set their own fees. Students charged nearly 75% cost of tuition (compared to maximum of 25% in England, Wales and Northern Ireland). Cost of fees and living expenses covered by income-contingent loans; repayments through tax system. Held up as a model by some observers, the scheme's "big bang" introduction meant that student indebtedness rose sharply. Originally loans carried a market rate of interest, but in 2000 the government intro duced interest-rate subsidies at an estimated cost of NZ$300m.

US

Spends higher percentage of GDP than any other country and has a 62% participation rate. Fees set by universities, though state universities subject to control by state legislatures for local students. Fees account for 41% of income at private universities and 18% at public universities. Students can get federal and state loans and scholarships, and there are generous university scholarships. Loans are subsidised, have mortgage-style repayments and the default rate is high.