THES reporters look at the distortions caused by the student finance system.
Student finance is "socially regressive" and "complex, confusing and bureaucratic", say the left-leaning think-tank the Institute for Public Policy Research and the Council for Industry and Higher Education.
A joint report published today, Funding Widening Participation in Higher Education: a Discussion Paper , by Wendy Piatt and Richard Brown, calls for a system of bursaries covering tuition and maintenance costs to be re-established for students from disadvantaged backgrounds.
Dr Piatt, research fellow in education at the IPPR, said: "While there are many factors that limit participation in higher education, recent surveys suggest that the spectre of debt continues to influence many students and affects their perceptions of risk and reward."
She said that help was not necessarily reaching the most needy. "We need to reassess ways of measuring disadvantage. We want to more accurately target the needy. There is a correlation between parents not going to university and income levels. We particularly feel that first generation students are the ones that are most deterred by any potential barriers."
One idea is for students from neighbourhoods with little tradition of higher education to receive bursaries.
Another idea would be to offer two years of free university education, after which students would have to pay higher tuition fees than the present level. Bursaries would still be available for students who needed them.
The report recommends the redistribution of cash from student "haves" to student "have nots". Market interest rates should be introduced on all loans for tuition fees and maintenance costs, and the cash used to fund the bursaries. There should be greater equality in the treatment of part-time, mature and full-time students, according to the report.
Redistribution from rich to poor should also take place at the institutional level, the report suggests.
Market-rate tuition fees should be phased in, with universities that charge higher fees receiving less support from the public purse. This cash should be redistributed "with the resources released going to those institutions that can not only charge less but have higher costs in widening participation".
The 5 per cent premium that universities and colleges receive for each student enrolled from a poor neighbourhood should also be increased.
However, more public funding is needed to raise staff salaries, particularly in areas where levels are not competitive and there are staff shortages.
The report concludes: "The government has set itself the target that 50 per cent of young people up to 30 years old should be experiencing higher education by 2010. It now needs a funding system to help it achieve this target."