Scottish Parliament votes to scrap Graduate Endowment

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The Scottish Parliament has voted to abolish the Graduate Endowment fee for all Scottish nationals studying at university.

Scottish students previously faced a £2,289 charge when graduating, with around 70 per cent adding the cost onto their student loans.

The successful passage of the bill, which was one of the SNP’s key manifesto pledges on student finance, means that Scottish students graduating in Scotland during and after 2007 will not have to pay any direct costs towards their education.

Claiming that 50,000 students would benefit immediately from the move, Education Secretary Fiona Hyslop said: “The graduate endowment fee was an inefficient tax. Most students increased their student loan to pay it and, due to the inefficiency of the system, only two thirds of this income was then returned to the public purse. We have acted quickly and, with parliamentary support, have scrapped this unfair fee.

“We believe that debt and the fear of debt can be a real deterrent and can actually prevent some young people going to university. That’s why we’re committed to relieving the debt burden and abolishing the graduate endowment fee is the first stage of our plans.”

She added: “The removal of the graduate endowment fee is great news for current and future students and last year's graduates, helping to significantly reduce their debt burden.”

The bill was passed by 67 votes to 61, with support from the SNP, Liberal Democrats, Greens, independent MSP Margo MacDonald, and one Labour rebel, Elaine Smith. All other Labour members and the Conservatives voted against.

An amendment calling for an independent commission to review the endowment was defeated 65 votes to 63.

The SNP has been keen to highlight that the move will ensure improved access to higher education.

MSP Aileen Campbell told The Journal: “The fear of debt puts people off embarking on an academic career and removing this tuition fee will help make going to university an option for more people. The SNP realises how important graduates are and that is why the government has taken this action to make student life a bit easier.”

However, Labour education spokesperson Rhona Brankin claimed that there was no evidence that abolishing the endowment would significantly change the number of people applying for university. She added that the money raised through the endowment would be better spent on improving access for prospective students from poorer backgrounds.

A number of students gathered outside the Scottish Parliament on 28 February calling on MSPs to scrap the fee. President of Strathclyde Students' Union and incoming NUS Scotland President Gurjit Singh echoed Fiona Hyslop’s remarks on student debt.

Speaking to The Journal, he said: “The abolition of the Graduate Endowment will stop students from being put off going into Higher Education in Scotland, and it will also reduce the amount of debt that students accumulate whilst studying. It was important that the Graduate Endowment was removed because it just added to the already huge debts that today’s students face."

The Graduate Endowment was introduced for all students starting university in 2001, with the first students liable to pay the fee in 2005. Of the £39 million in charges administered between 2005 and 2007, only £12.7 million was paid upfront, with the other £26.3 million being added to student loans. The Scottish Government has claimed that only £57,000 has been returned to the taxpayer from the money collected.

European Union nationals, who up until now have enjoyed the same financial status as Scottish students, do not benefit from the abolition of the endowment.

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