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Lib Dems endorse graduate tax plan

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Liberal Democrat conference delegates have voted in favour of Vince Cable's plans to replace university tuition fees with a graduate tax.

Currently, some universities charge British students up to £3,290 a year in tuition fees. This could rise to £7,000 a year next month following an independent review led by Lord Browne. The fees become repayable after graduation as soon as the borrower starts earning over £15,000.

The graduate tax, as the name implies, would also be payable after a student obtains a degree. However, a graduate would have to start paying it much sooner -- i.e., on any income earned above the (currently £6,475 per annum) -- and may potentially have to continue paying it over the duration of his or her working life.

Research from the University and College Union (UCU) shows the cost of a university degree could increase exponentially if the proposals are implemented.

For example, under a system where graduates are asked to pay a tax of 5% on their income over 25 years, the average doctor would pay back over £100,000 (£105,564) and teachers close to £50,000 (£46,046).

The Guardian describes university fees as one of the "most divisive issues" within the coalition government. Leading Lib Dems, including Mr Cable, Sir Menzies Campbell, Simon Hughes, and Charles Kennedy, have all said they would like to see tuition fees abolished in favour of a graduate tax.

But the Conservative universities minister, David Willetts, has hinted that tuition fees will rise.

A poll of around 500 students by totaljobs.com found two-thirds of students would not have been able to study at university if fees had been £6,000, but a similar proportion oppose the introduction of a graduate tax.

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