The university has spoken out in response to a Scottish Government consultation on how an extra £30 million being made available for higher education support in 2010/11 should be spent.

The SNP administration wants to replace student loans with means-tested grants. It believes this would fairer and simpler to administer.

Currently, the main award is the young student’s bursary, which is worth up to £2510 and is available to dependent students in a household whose income is less than £32,515.

Ministers have suggested beginning the move towards a grants-based system by extending this bursary and Abertay has broadly welcomed this.

But it warned, “The university believes the issue for student funding and debt is not purely related to the replacement of loans with grants. The major issue is the levels of funding students have access to, which the university believes is inadequate.

“Current levels mean that at this university some 80% of students are working part-time in order to have enough money to make ends meet.

“The number of hours students need to work in order to earn enough to support themselves has a detrimental effect on their ability to devote enough time to their studies and thus grades suffer.”

The university has around 5000 students, three-quarters from Scotland.

The National Union of Students has called for students to be guaranteed a minimum income and Abertay said it “broadly welcomes the sentiments behind the suggestion”.

It goes on to say, “The issue for many students is not that a student loan puts them off studying for a degree, but that the level of financial support is not enough to keep them on the degree.

“The university believes bursary support should not be solely focussed on the young.

“Many mature students who attend this university would never have had the opportunity to attend university, for a variety of personal and financial reasons, when younger.

“It seems unjust that by reason of age and circumstance mature students are excluded from receiving bursary support.”

The Association of Scotland’s Colleges wants to introduce full bursary or grant support for students on all college higher education courses. Abertay has told ministers it believes it would not be fair to do so if university students did not have the same funding.

“The proposal would polarise where students from lower socio-economic backgrounds would attend, rather than encouraging them to attend university.

“The university believes students should be given the same level of means-tested financial support regardless of the institution attended.”

The main type of student loan available at present is up to £3485 depending on household income.

But there is also a minimum loan — £905 for those living away from home or £605 for those at home — for all eligible students regardless of household income.

Abertay has argued there is a case for removing the minimum loan, with the money being used instead to support the poorest students.

“Given the thrust of the consultation, it seems only right that less well-off students should receive more funding, with the minimum loan being tapered out for those most able to afford to support their children/partners.”

Consultation responses are being considered by the Scottish Government.