Universities UK responded today to a speech on higher education by Universities Minister David Willetts. The speech was delivered at Oxford Brookes University.

Professor Steve Smith, President of Universities UK, said: “We applaud the fact that David Willetts is raising key issues and underlining the importance of the quality of the student experience and the sustainability of universities.

“It's right that we debate the issue of undergraduate places and also what universities are delivering, particularly in the run-up to Lord Browne's review. As things stand, it's clear that the student funding system in its current form is unsustainable.

“But universities are committed to delivering a world-class student experience and will not compromise on this. Universities are already having to deal with a range of announced cuts so will not be able to maintain this standard or meet student demand if funding per-student is cut further.

“Whatever Lord Browne recommends in terms of changes to the level of graduate contributions, we must ensure that universities continue to receive sufficient public funding to maintain our world-leading position. The outcome of the Review must help guarantee this status and must not be an opportunity for politicians to deliver back-door cuts to the sector.

“As outlined in Universities UK's submission to Lord Browne's review, we must look again at how student support is funded and how it could be better targeted towards those students in most need. We know that the recent constraints on student recruitment were linked to pressures on the government’s student support budget.

“Analysis by the Institute for Fiscal Studies shows that under the current maintenance and fee loan system in England, the average taxpayer subsidy is 23% – in other words, for every £1 loaned in the form of maintenance and fee loans, the government must pay 23p.

“One of the options put forward would be for government to consider charging an interest rate on loans equal to the government’s cost of borrowing  (currently 2.2%) which would save the taxpayer money.”

1. Universities UK’s submission to Lord Browne’s review is available online