The London School of Economics is considering whether to waive higher tuition fees for deserving British students.
Sir Howard Davies, who became director of the LSE last week, told The THES :
"We do see a value in maintaining a diverse student body. Law and accountancy are in markets where the cost of a degree is pretty trivial compared with earnings, but for social policy that's not true. We would have to think pretty hard about it."
The LSE will not make a final decision on tuition fees until the proposals to introduce variable fees of up to £3,000 a year have - or have not - been passed by parliament. However, Sir Howard hinted that the school could afford to waive fees for many students.
Only half the school's students are undergraduates and just 40 per cent are domestic for the purpose of tuition fees. Sir Howard said: "In terms of the proportion of the LSE's total income, it's not such a big thing compared with other institutions. The money would be helpful but not transforming, particularly when you look at what we would have to spend on bursaries and so on."
He said variable fees would benefit other universities but not to any extent the LSE. "We are talking about a gross 3 per cent of income and net maybe 2 per cent. I would rather have plus 2 per cent than minus 2 per cent, but it's not going to change our life."
Sir Howard also warned that many people did not realise that no tuition fees would be charged upfront under the proposals. The LSE plans to adopt a softly-softly approach to their introduction.
He said: "The rationalist says (the proposals) shouldn't put anybody off but, on the other hand, we have to be careful that we don't create surprising changes. It's not unreasonable to start (charging fees) in a cautious way."
Sir Howard, who was previously chairman of the Financial Services Authority and a director of the Bank of England, also plans to develop the LSE's international partnerships. In his first week in the job, he finalised a partnership in corporate education with Duke University. The LSE already has strong links with several US institutions.
But he added: "We have no ambition to go offshore. The character of the institution would be at risk. Part of the attraction of the LSE is that we are a British institution in London.
"I have observed the massive growth of US higher education institutions and I think it would be a bad thing for the world if the institutions with global reach were all in America."