Professor: Students should pay "education tax" after graduation
The National Union of University Students is opposed to the idea, saying that chargeable education would increase inequality
Finland should introduce a model according to which the ”beneficiary” should pay at least part of his or her education, suggests Professor of Economics Matti Virén of the University of Turku.
Virén would take the British system for a model, in which charges for education start after graduation. They have been graded according to income: the higher the income, the greater the tax surcharge.
In the latest issue of the Finnish journal of sociology Yhteiskuntapolitiikka, Virén criticises Finland’s ”free” university education, saying that it leads to extreme inequality.
”For example, in a physician’s family children who want to become physicians are given all the benefits of the free education, which is covered by those young people’s taxes who come from poor families and have to start working right away”, Virén notes pointedly.
Such benefits include for example the education itself, subsidised meals, student financial aid in three forms: study grants, housing supplements, and government guarantees for student loans, almost free health care, the discounts granted by the Finnish Railways (VR) and the bus services provider Matkahuolto, as well as numerous other student discounts.
In addition, after completing a degree, graduates may be eligible for a tax deduction for their student loans and assistance with student loan interest.
The expenses of the institutes of higher education and financial aid for students will amount to a total of approximately EUR 3.65 billion in the current year.
The higher-education degree at universities costs an average of EUR 47,000, but in the more expensive fields, like dance and veterinary medicine, the sum could be as high as EUR 150,000.
According to Virén, the present tax system is very close to the flat tax system: ”When it comes to the repayment of education investments, the role of the progressive income tax in the government income tax system should not be exaggerated”.
According to one study, the real return on investment in personal higher-degree education is 14 per cent.
A university graduate will get an average of EUR 17,000 more annually in salary than a person with secondary education.
There is also a difference between the two groups when it comes to unemployment risks and pensions. It is more likely for the children of ”better families” to end up in universities - particularly in fields that enjoy wealth and status.
Less than 10 per cent of children whose parents have only the basic comprehensive education will graduate from a university, while the corresponding proportion of university graduates’ children is more than five times as high.
According to Virén, the ”free” and in fact very expensive university education is a mechanism that leads to inequality and does not help to improve poor students’ social standing.
Virén notes further that admission exams and related cram courses can be compared to a lottery game, and there should be consideration of replacing the current free education by the investment concept. Then the most important admission criterion would be a student's personal willingness to invest in his or her university studies.
Katri Korolainen-Virkajärvi, President of the National Union of University Students in Finland, rejects the idea of chargeable education, saying: ”Free university education that is attainable to everyone is bound to benefit primarily the society at large. Chargeable education would increase inequality, as children from families with lower social standing would not dare to start studying at all.”
In Great Britain, the Australian model of a tax on students after graduation has been adapted to British conditions.
In Finland, discussions have recently been focusing on potential tuition fees to be paid by foreign students who come to study in Finnish universities from outside the EU.
In the upcoming autumn, some universities will introduce such fees on a trial basis.
Previously in HS International Edition:
Finland´s eight-Laudatur graduates all hope to study medicine (24.5.2011)
Tuition fees suggested for some types of higher education (17.2.2010)
Tuition fees for foreign students to be introduced on trial basis in 2010 (15.8.2008)
National Union of University Students in Finland (SYL)
KELA: Financial aid for students