"Graduates should pay back their loans at a higher rate of interest to help avert a funding crisis that will leave the UK's world-class universities in massive debt, haemorrhaging their top academics, the country's leading higher education institutions suggest today.
"The Russell Group, which represents 20 elite, research-intensive universities, told a key review into funding that their financial sustainability was "severely at risk" under the current system. It warned that the institutions could face a deficit of £1.1bn by 2012-13, and would have to make major cuts to staff and infrastructure.
"The current systemof repaying loans taken out to cover student fees is unnecessarily generous and includes subsidies that benefit the better-off, the group said.
"Together with introducing a "real rate" of interest for repayments - as opposed to the subsidised rate used now - it also suggested increasing the proportion of debt that graduates pay back, and bringing down the threshold at which they start paying."