The UK needs more differentiation in its ÖйúAƬ sector if it is to overcome a ¡°triangle of sadness¡± that is threatening to undermine its world-leading reputation, according to a vice-chancellor.

King¡¯s College London¡¯s Shitij Kapur argues in a that high student debt, falling university funding and staff discontent are combining to ensure the current system has ¡°reached its best-by date¡± and will be unable to?provide for the 131,000 extra school-leavers?projected to be looking for university places by the end of the decade.

In the paper, published on 14 November, Professor Kapur says the UK has one of the finest university systems in the world, with nearly 80 per cent of those starting university completing their course, compared?with the Organisation for Economic Cooperation and Development average of 64 per cent.

But these graduates are also among the most indebted globally, with 90 per cent of them taking out a loan and racking up an average debt of about ?45,600, compared?with the US where average debt is $28,400 (?23,000) and only 60 per cent take out loans.

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But still the ?9,250 fee paid by all home undergraduates is not enough to cover universities¡¯ resources, Professor Kapur points out. And, with the UK government making the lowest proportional contribution to university education in the OECD, institutional resources have been stretched to the limit, with 100 of 144 UK universities?reporting an operating deficit in 2021-22.

With domestic education now loss-making, there is no incentive for any university to accommodate more students, Professor Kapur says, but the country needs a growing ÖйúAƬ sector as the young population swells.

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Staff have borne the brunt of many of these pressures, Professor Kapur writes, and this has ¡°helped create the conditions for?one of the longest-running industrial disputes?in our sector¡¯s history¡±.

¡°The pressures on staff are real ¨C it now takes more academic and professional staff support to create a university graduate than before, as universities compete to provide a broader range of specialisms and additional services for students in terms of mental health and academic support, as well as career advice and placements,¡± he says.

UK institutions now also produce a lower share of the highest-quality academic papers than they once did, putting the goal of turning the UK into a ¡°science and technology superpower¡± at risk, the paper says.

Professor Kapur says the UK should look to California as it tries to create a more sustainable university system.

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While the UK has one single regulatory body that deals with all universities, all of whom charge a uniform fee, the US state ¨C which has roughly the same size gross domestic product ¨C operates using a system of research universities, teaching universities and community colleges.

The paper proposes the UK move more towards this type of system.

¡°Our undifferentiated system tasks all universities to do everything. Perhaps it is time to seek a differentiated system ¨C with greater specialisation across institutions and cost-effectiveness within them,¡± the paper says.

Further steps identified by Professor Kapur include the introduction of inflation-related uplifts in student fees that could be linked to measures of quality, as determined by the Teaching Excellence Framework.

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The ¡°Faustian cross-subsidy¡± that sees universities subsidise their world-leading research with international fees has to stop, the paper concludes.

Instead it argues the government must fund the complete cost of the research it sponsors, and incentivise greater research collaboration with industry, as exists in the likes of Germany and the Netherlands.

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tom.williams@timeshighereducation.com