Page last updated at 10:03 GMT, Friday, 14 May 2010 11:03 UK

Students face early loan payback

Queen's University Belfast
Queen's graduates could be asked to pay loans back more quickly and at a higher interest rate

Queen's University Belfast is among a group of UK universities suggesting that graduates could be asked to start paying back student loans earlier.

The Russell Group also wants loans paid back at a higher rate of interest.

The group suggests this would be one way to tackle a predicted £1.1bn deficit in university funding by 2013.

The Russell Group represents the 20 most research-intensive universities in the UK. It will make recommendations to the government later this year.

The claims come in the group's submission to England's official review of student finance and fees.

The financial sustainability of the UK's top universities was "severely at risk," the group said.

It says that without extra income its members will be forced to make significant cut-backs.

The group has suggested that cuts of £900m planned by the Labour government for the next three years would bring the UK's higher education sector to its knees.

There is now a real risk that we could lose academics who have been responsible for discoveries that have changed the lives of millions of people for the better
Wendy Piatt
Russell Group director general

The University of Ulster has rejected the idea and said it would not be in the interest of poorer students.

Professor Richard Barnett, Vice Chancellor of the University of Ulster, said they are pleased to be independent of the various English-centric university pressure groups.

"We take the view that today's proposals by the elitist Russell Group, which are not in the interest of students from poorer backgrounds, vindicate our independent stance," he said

"Student finance is a devolved matter for the Northern Ireland Assembly to decide upon, and the University of Ulster is committed to working with our MLAs to develop student finance arrangements which are right for Northern Ireland."

Although the Russell Group submission stops short of suggesting higher tuition fees for UK students, it appears to indicate that other solutions may not be fully workable.

The group said variable tuition fees had enabled top universities to maintain high standards and widen access.

This funding, together with the package of loans covering the fees - now at £3,225 a year - has allowed many more students to attend universities, it says.

It adds that much of the increased funding has been used by universities to compensate for a backlog of under-investment.

But it also claims the financial sustainability of the sector as a whole is severely at risk, with universities facing rising cost pressures, particularly related to salaries and pensions.

It said research-intensive universities faced particular pressures because of low staff-student ratios and high equipment and resource costs.

One Russell Group university loses an estimated £3,620 per chemistry student per year, it adds.

And figures like this lead the group to predict top universities will be £1.1bn in the red by 2012-13.

Russell Group director general Wendy Piatt said: "With funding reductions and the prospect of future cuts to manage, without clear means of increasing their income, meeting these challenges begins to look like an impossible task.

"There is now a real risk that we could lose academics who have been responsible for discoveries that have changed the lives of millions of people for the better."



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