Students should pay more for university

21 September 2009

Students should pay higher fees to attend university and more interest on their loans, a new report from the Confederation of British Industry (CBI) has suggested.

The report claims that public finances cannot cope with the increasing number of university students, making current funding levels “unsustainable”. The report comes after Liberal Democrat leader Nick Clegg proposed dropping his party’s pledge to scrap university tuition fees in England.

The CBI’s report, meanwhile, believes the government should lower its target for 50% of 18 to 30-year-olds to go on to higher education, and instead focus on “quality not quantity”.

It also proposes providing tuition fees at the government’s cost of borrowing, offering maintenance grants only to those most in need and increasing university fees to up to £5,000 in 2012.

Universities in England are looking to make cuts of between 10% and 20%, after the government asked them to make savings of £180 million between 2009 and 2011. But Richard Lambert, director-general of the CBI, warns that cutting research funding, slashing teaching budgets and reducing student numbers could impact the quality of higher education in England.

He adds: "We say that savings should come from the student support system. Of course, it's never easy to ask students to pay more, but the UK's student support is on a par with some of the most generous in the world, and the priority must be to preserve quality as well as assisting those unable to pay to ensure that higher education remains open to all."

By increasing the tuition fee cap to £5,000 from 2012, the CBI estimates a £1.25 billion boost for universities without any reduction in student demand. The cap is currently £3,225 in England and Northern Ireland and £1,285 in Wales.

The report also says universities should focus more on subjects that are good for the economy, such as science, technology, engineering, maths and languages. Undergraduate numbers have jumped by 35% since 1997, but the number of students taking up these subjects has fallen by 20% since 1999/00.

Sam Laidlaw, chairman of the CBI higher education task force, and chief executive of Centrica, says: "The UK has a world-class higher education sector. But it faces some urgent challenges including the changing needs of business, intensifying international competition, and constrained public sector funding.”

He calls for “effective collaboration” between the higher education sector, business and government, with options for businesses to sponsor students studying relevant subjects and provide financial support or internships.

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