Students should pay higher interest rates to avoid a university funding crisis, says a report by the Russell Group. This comes alongside the prospect of large scale budget deficits caused by government cuts.
The Russell Group represents the 20 most research-intensive universities in the UK, including Oxford and Cambridge, and claims that significant cut backs will have to be made without alternative means of funding.
One method of averting a crisis, the report suggests, is to charge students a normal rate of interest. This could mean that students would pay around 5% on their loans, which has been the average over the last decade.
Students for 2009-2010 are currently paying 0% interest, and post-2008 students are limited to a maximum rate of 1.5%.
The report also considers the idea of reducing the repayment threshold for loans. Currently set at £15,000, this could see graduates paying back their loans when earning barely above minimum wage.
Both these ideas, alongside the prospect of increased tuition fees and reduced funding, have the potential to alienate future students from poorer backgrounds, and undermine years of huge public investment into higher education.
The alternative, according to the report, is cutting staff numbers unless vast improvements in international student recruitment are made. It appears whichever method wins, students still lose.
The vice-chancellors of all but three leading institutions received raises averaging 8.5 per cent.
Combined with annual pension contributions of up to £63,000, the heads of the Russell Group of 20 top research universities had average total pay deals of £308,000
In addition to their generous pay deals, almost all the university heads receive free accommodation and the use of a car.
Prof John Hood, the vice-chancellor of Oxford University, was given a 21 per cent pay increase.
If they spent more on paying lecturers and less on pay rises and new shiny buildings then there wouldn’t be a problem.
(not my research but worth noting and worth some FOI research)
I agree with what Richard C is saying. It’s the old story of more money needed because money is being wasted elsewhere. And they say students should budget!