Proposals to allow universities to underwrite student loans have been drawn up by civil servants as part of research into how to shift the burden away from the taxpayer as a result of some students being unable to repay their loans.
The plans were commissioned by
While the idea is that universities could make money if graduates earn more than expected, it is also controversial, not least because of fears that universities might expect to be allowed to raise the £9,000 cap on fees in exchange for taking responsibility for some of the risk of recouping loans.
There are also concerns that raising the importance of students' future earnings could mean there would be fewer incentives to offer courses that do not lead to high earnings, such as those in the humanities and social services.
Advocates of the idea suggest however that students would benefit from a long-term relationship with universities, who would have an interest in providing retraining and further career support. The
Willetts told the programme: "The main point of the idea is to give universities a stronger incentive to focus on the jobs and the earnings prospects of their graduates and to keep the graduate and the university in contact with each other.
"At the moment the
A spokesperson for the
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