A former government official has stated that under a revised student loan scheme, every university graduates should repay at least £10 a week. Economist Tim Leunig, a former Conservative advisor to the Treasury and the Department of Education, has unveiled a 10-point plan aimed at "repairing" the flaws in England's student financing system. In a report released by the think tank Higher Education Policy Institute (Hepi), Mr. Leunig demanded that student loan repayment terms be shortened from the "absurd" 40 years to 20 years and that debt never be allowed to increase.

Mr Leunig, who is a visiting professor at the London School of Economics (LSE), said all graduates should have to repay at least £10 a week “no matter their income” to make the system more financially stable.

University leaders have warned of significant financial concerns as a result of frozen tuition fees paid by domestic students and a drop in overseas students.

This is the only zero-cost reform package out there – offering a proper maintenance package for students, shorter repayment periods for graduates, and more money for universities

Tim Leunig, economist and report author

The previous government raised the cap on university tuition fees in England to £9,000 a year in 2012, but it has been fixed at £9,250 since 2017.The report calls for a £2,000 per student rise in university funding funded directly by government rather than by increased tuition fees.

Mr Leunig said: “This is the only zero-cost reform package out there – offering a proper maintenance package for students, shorter repayment periods for graduates, and more money for universities.

“The new Government should just get on with it.”

Professor Eric Neumayer, deputy president and vice-chancellor at LSE, said: “Tim Leunig provides a costed and principled proposal for radically reforming the current system of student finance.

“One may quibble with some of the details he puts forward, but one cannot argue with the fact that student finance in its current form is broken and leaves all stakeholders dissatisfied.

“It desperately needs the kind of radical reform that Leunig’s hugely welcome intervention puts on the table for discussion and serious consideration.’

Lee Elliot Major, professor of social mobility at the University of Exeter, said: “How to create a sustainable but also fairer student finance regime is one of England’s thorniest policy dilemmas.

“These proposed reforms should be given serious consideration, most importantly because they would end a current indefensible system that saddles students from the poorest backgrounds with the most graduate debt.”

Earlier this month, Education Secretary Bridget Phillipson said she could not promise “painless or immediate resolutions” but she promised to give her attention to the issues facing the sector.

UUK is due to publish its “blueprint” this week with proposals for a “reset” of the university sector.

A spokesperson for UUK said: “Universities UK believes that Government should link fees to inflation to stop their value eroding year on year, reintroduce grants for the poorest students and lift the value of the maintenance loan to support students while they are studying.