A proposal to halt government funding for associate degree courses could lead to an exodus of local students, the Democratic Party has warned. Students would rather go abroad to study than pay $160,000 a year in fees, party education policy spokesman Yeung Sum said. The move is among recommendations in the University Grants Committee report to reform higher education, released on Tuesday. Dr Yeung, a lecturer at the University of Hong Kong, said: 'It is discrimination against associate degree students. Undergraduates have 82 per cent of their fees subsidised by the Government. Why not for students on associate degree courses?' He said $160,000 would meet the cost of an undergraduate course overseas. He also warned the proposal to end the link between lecturers' and civil servants' pay could compromise education quality. But Secretary for Education and Manpower Fanny Law Fan Chiu-fun said the proposals were aimed at grooming elite students and first-class universities. 'The way forward is to reward outstanding performance, break away from so-called 'average-ism', strengthen management as well as increasing accountability and transparency,' Ms Law told yesterday's special Finance Committee. She said the long-term goal was to subsidise only associate degree courses with market needs and those requiring heavy kick-start investment. Citing a host of loan schemes, she stressed that no student would be deprived of opportunities because of money problems. University Grants Committee secretary-general Peter Cheung Po-tak said delinking academics' salaries from civil servants' pay was a necessary step to ensure universities could compete with international counterparts in recruiting qualified teaching and research staff.