Magazine article The Times Higher Education Supplement : THE

Bring in the Banks: Vice-Chancellor Breaks Cover on Student Finance

Magazine article The Times Higher Education Supplement : THE

Bring in the Banks: Vice-Chancellor Breaks Cover on Student Finance

Article excerpt

A consortium of retail banks could offer undergraduate loans to cover tuition and maintenance costs under a new system of student finance, according to a vice-chancellor floating the controversial idea.

Rama Thirunamachandran, vice-chancellor of Canterbury Christ Church University and former director of research, innovation and skills at the Higher Education Funding Council for England, said that the current model for student finance is unsustainable in the long term if the sector is to expand.

He is thought to be the first head of a UK university to publicly moot the idea of using the banking system, rather than government-funded loans, to provide access to student finance.

"There probably needs to be a substantial rethink about how higher education is funded in the UK," said Professor Thirunamachandran, who speculated about whether there are "options to consider" in moving to a loan system that is "underpinned by the private sector".

He added that policymakers needed to look again at how best to share the costs of higher study between individuals and taxpayers.

In December, the government said that the cost of lifting the cap on student numbers would be met by selling the pre-2012 book of income- contingent loans.

Recent estimates from the Department for Business, Innovation and Skills suggest that 40 per cent of the outlay on post-2012 loans will never be repaid, and critics believe that the actual amount is likely to be higher. Professor Thirunamachandran said: "The numbers don't add up."

In 2012, Sir Eric Thomas, vice-chancellor of the University of Bristol, came under scrutiny after leaked documents revealed that he had in the previous year sent details of a private finance scheme to the universities and science minister. In an email to David Willetts in 2011, Sir Eric outlined a system in which uncapped tuition fees are paid by private investors in return for a proportion of a graduate's salary. …

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