Leading article: The business of higher education

Full marks to the CBI for concentrating minds on the future of higher education with its controversial report on funding published yesterday. At a time when both Labour and Conservatives are mute on the subject, it is refreshing to have the difficulties facing universities spelt out and remedies suggested.

The CBI's argument that fees need to be increased is compelling. And the figure of £5,000 a year put forward by vice-chancellors seems reasonable given that polling suggests this would not deter applications. However, that will only be the case if the support package for young people from more impoverished homes remains largely intact. That is why we have reservations about the CBI proposal to reduce the eligibility threshold for maintenance grants to the level of three years ago, when only those with a total parental income of £17,000 qualified for a full award. The threshold is now £25,000. A large number of students – particularly those from homes that are just above the poverty line – would be seriously disadvantaged by this move and many would be deterred from applying.

The CBI's third proposal on student finance, to charge the full market interest rate on loans, would be still more off-putting for students from poorer backgrounds, especially given the level of debt already being accrued by students.

Although the CBI believes its proposals would not reduce demand for places, it also suggests scrapping the 50 per cent government target for participation in higher education. This target, or rather aspiration, is not worth losing too much sleep over. It was a figure plucked out of the air in the first place, not justified by any serious cost-benefit analysis.

Finally, it is welcome to see the CBI taking its responsibility for helping fund the higher education system seriously at a time of such economic uncertainty. Its call for businesses to make funds available for sponsorship of students – in particular of those on courses it has been difficult to fill, such as science and maths – is refreshing. The proposals of business on reforming higher education will be all the more credible when they show they are prepared to put their money where their mouth is.