Many American universities are running "admissions Ponzi schemes" to make up for cuts in state support, a US college head has claimed.

Peter Mercer, president of the Ramapo College of New Jersey, a small liberal-arts college near New York, said many top US institutions risked compromising standards by raising student numbers.

Speaking on the first day of a conference held in London on 3 and 4 July, Dr Mercer said an aggressive growth model was likely to "collapse under its own weight" as universities would struggle to support more students - and maintain quality - without extra resources.

In effect, it was "admissions as a Ponzi scheme", he claimed, referring to the fraudulent practice of paying investors with their own money or subsequent investors' cash rather than from profits earned.

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"Growth strategies are being pursued by higher education institutions," he said. "[With] cuts in grants and financing, the answer is to recruit more students.

"If you are pursuing a growth strategy, you have to reach further down to make the numbers. If you do that, you ruin your chances of improving academic quality."

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He said that Ramapo had capped its undergraduate intake this year, but many universities had been forced to pursue increased growth as budgets were slashed.

"Twelve years ago, 54 per cent of my budget came from the state. This year, it was 25 per cent," he said. "If I hang around long enough, I may be the president of a private college."

Max Blouw, president and vice-chancellor of Wilfrid Laurier University in Ontario, Canada, told the conference - hosted by the Universities and Colleges Employers Association and titled Managing the Academic Workforce: Global Challenges and Opportunities - that the current university system may be unsustainable. He questioned whether the "40:40:20" model, in which academics teach for two days a week, research for two days and carry out administrative duties on the remaining day, could continue.

"Is it necessary to have a PhD if you are teaching at introductory level? Is it essential for undergraduate level? I'm not sure," he said.

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Speaking to Times Higher Education after the conference, Dr Blouw said: "In our secondary school system, almost no one has a PhD, but they may be teaching something like calculus at a level close to university [standard].

"If you happen to be at a prestigious...university, one way to marshall resources is to pay people less to teach at introductory level and pay more to those doing high-level research...does one need a PhD to be an exceptional teacher?"

jack.grove@tsleducation.com.