The government should address the widening salary gap between lecturers and comparable professions, MPs said this week.
The Commons education select committee report on student retention welcomes the £330 million three-year pot of money announced earlier this year, but acknowledges that lecturers thought this insufficient.
Student dropout is estimated to cost about £200 million a year.
Members wrote: "We urge the government to address the growing disparity in salaries between academic appointments and career paths for equally qualified candidates in other fields."
The report recommends an urgent audit by the Higher Education Funding Council for England of the impact of casualisation in academic employment, amid concerns that casual staff have less time and inclination to offer pastoral support to students.
It warns the funding council about a demographic time-bomb because of the large numbers of lecturers who will retire in the next few years but who will not be fully replaced because of under-recruitment of younger academics.
The report calls on the DFEE to commission research on those graduates who may be deterred from postgraduate research and an academic career because of accumulated undergraduate debt.
There is also support for improved undergraduate funding. It calls on the government to commission research into the effects of its policies on students' financial support and completion rates. The policies included scrapping means-tested maintenance grants and the introduction of undergraduate tuition fees.
The committee calls for improved access to financial support for the poorest students and says that the income threshold - currently £10,000 - for the repayment of student loans should be raised "very substantially".
The report recommends a maximum of 12 hours paid work for students but says that this could be self-defeating "unless access to financial support for less well-off students were improved".
It calls on Hefce and the DFEE to explore measures for encouraging parents to pay tuition fees amid evidence that a fifth of parents fail to pay their contribution.
The report rejects any notion that increasing the numbers of students from poorer backgrounds lowers academic standards. It calls for increased portability of attainment below degree level, allowing students dropping out in their first year to continue their course elsewhere.
Pastoral support for students could be increased if lecturers had fewer bureaucratic chores associated with the research assessment exercise and teaching quality assessments. The report calls on Hefce to consider merging the exercises and asks the government to consult staff on the impact of this year's RAE. It calls for "lighter touch" quality inspections.
Other recommendations are:
- A post-qualifications applications system
- Fully funded student expansion
- Sustained increases in funding per student for teaching
- Research on non-completion
- Refinement of Hefce benchmarks
- Financial incentives for widening access to be part-paid once students complete
- A National Audit Office report on retention and dropout rates
- Pilot schemes for three-month student induction courses over summer
- Guaranteed childcare places
- "Star lecturers" for first years to improve retention rates.