Students attending university in the UK should be made to pay more for maintenance loans and higher tuition fees as, says a report from business leaders.
The Confederation of British Industry says the extra money required to fund universities should be sourced through savings made to the student support system.
It has also appealed for an increase in sponsorship and bursaries from businesses.
The National Union of Students criticised the report, saying it was "gross hypocrisy" from the "fat cats at the CBI".
The government in England will be launching a major review into how higher education and student fees are funded.
According to higher education minister David Lammy, the government was committed to investing in the UK's "world class system" and to aim for 50% of young people to continue to higher education at university.
But the CBI has called for this target to be abandoned. It also said that higher education is extremely important to the future of the economy, and dismissed options such as cutting teaching budgets and reducing student numbers.
"Instead, we say that savings should come from the student support system," said the CBI's director general, Richard Lambert.
To achieve this would require reducing the subsidy currently provided on student loans, further means-testing of support and significantly increasing tuition fees above the current levels of around £3,225 per year in England and Northern Ireland and £1,285 in Wales.
Students In Scotland currently pay no tuition fees.
The report also adds that universities should focus more on economically valuable areas including engineering, maths, science, technology, and languages.
The plans to bridge the gap in funding has sparked outrage among student leaders.
"At a time of economic crisis, when many hard-working families are struggling to support their offspring through university, I am astonished that the CBI should be making such offensive recommendations," said NUS president, Wes Streeting.
Universities are backing calls for higher fees and reducing the subsidy on student loans.
"The fees cap needs to be high enough to bring in sufficient funding and enhance competition to further drive up quality," said the 1994 Group's executive director, Paul Marshall.
"In addition, a sensible interest rate should be introduced on student loans, set at the current government cost of borrowing, to rectify the huge subsidy that the government currently pays."
As the new university year is set to begin this month, many students are looking for the best student bank account to house their student loans, but savvy financail guru Martin Lewis from moneysavingexpert.com warns students to avoid being talked into closely following university recommendations when deciding on an account.
"Students' Unions, normally fierce protectors of students' rights, sometimes sell exclusive access to their new students' fairs to the highest bidding bank to bolster the Union's funds," he said.
"Sadly, it's far from certain that the one on offer will be the top student bank account on the market; generally it'll be the one who pays the uni the most money"
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