UK: Universities told to make fees deal with banks

Universities have been urged to strike a deal with banks to stop another rise in tuition fees for all students, writes Jessica Shepherd for The Guardian. Some university leaders want tuition fees to rise from the current cap of £3,225 (US$5,350) a year in England to more than £7,000. But the government may not be able to afford this because it subsidises loans that allow students to pay fees upfront and then repay the loan after graduation.

Those universities that want to charge higher fees should make a pact with high street banks, Richard Brown, former chief executive of the Council for Industry and Higher Education, told university leaders at a conference in London. Under the pact, banks would lend students extra money needed to pay higher fees at low interest. In return, universities would provide a fund that would limit the banks' exposure to the risk of students defaulting on their loans.

Universities could have an extra £1.2bn a year from the higher fees, while graduates would be able to pay back their loans from the banks depending on how much they earn - as they do with fees now. Brown told the Guardian he had discussed the proposal with the major high street banks who were "receptive" to the idea.
Full report on The Guardian site