Wealthy graduates to subsidise those in lower-paid employment

HIGH-flying graduates who find highly paid jobs after completing degrees south of the Border will have to subsidise university leavers who find less lucrative employment.

The most successful graduates will have to pay back more than the cost of their degrees to help out their less successful colleagues as a result of a deal struck between the Conservatives and Liberals in the coalition government.

The agreement revealed yesterday was forged by David Cameron, Nick Clegg and Danny Alexander and will see interest rates on student loans rise across the board. But there will also be variable rates for graduates based on their earnings called a "progressive graduate contribution".

The new mechanism for funding higher education institutions in England and Wales was revealed as Scotland's political parties prepare for a summit that will play a key role in deciding how to deal with the funding crisis that threatens to engulf universities north of the Border.

Michael Russell, the education secretary, has invited all political parties to the talks as well as university representatives and trades unions. They will discuss a draft Green Paper on how Scotland's universities are funded in future.

Funding for Scottish higher education differs from that south of the Border, with students excused tuition fees.

This week Lord Browne of Madingley, the former BP chief executive, will publish his own plans to reform student funding in England and Wales.

His proposals are expected to have a knock-on effect in Scotland. University principals and opposition politicians in Scotland have warned that institutions north of the Border could fall behind better-funded English counterparts unless something is done to overhaul the Scottish system to make it generate more cash.

Yesterday Elizabeth Smith, the Scottish Conservative education spokeswoman, said: "We are in danger of letting the situation drift in Scotland, and if we leave it much longer we are not going to have a sustainable network for the years ahead.

"The status quo is unsustainable in Scotland. Scottish universities have to ensure that they remain competitive."

Earlier this month Russell said he agreed with Glasgow University principal Anton Muscatelli who recently said a new system of funding had to be in place within a year or universities would suffer.

Professor Muscatelli has suggested a graduate contribution scheme for Scotland - a proposal that has been endorsed by the Conservative Party in Scotland.

Yesterday Russell said: "With the Browne report expected to publish next week, its findings and recommendations will have a significant effect on the situation in Scotland. However, they will not dictate it. After winning consensus in the Scottish Parliament, twice, on our decision to rule out the reintroduction of tuition fees, I believe we are in a strong position to find a solution that's right for Scotland."