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Professor Alison Richard, 54, takes over as the second woman Vice-Chancellor of Cambridge University October 1.
In an interview to the Guardian, she said controversial government proposals to shake up higher education funding represent "a wake-up call" for Britain's universities after 30 years of diminishing funding.
She said it was remarkable that "the vitality and intellectual energy" of Cambridge was still so strong, given that, like many other universities, it was under-financed. "That situation just isn't sustainable for the longer-term."
A distinguished anthropologist who took her first degree at Cambridge, the second woman "chief executive" of Cambridge university in its near-800 history has returned to the UK after more than 30 years working in the US, where for the past nine years she has been provost of the ivy league university Yale.
The first woman Vice Chancellor of Cambridge was Dame Rosemary (1975-1977). Now approaching her 90th
birthday in 2003, she remains involved with the College and is a much-loved figure by many generations of students, says a release from Cambridge University.
Dr Richard's immediate priorities are to find new ways of giving financial help to poor students by expanding Cambridge's bursary scheme, she said, and stressed that it was crucial not to deter any youngsters from applying to Cambridge, either because they were worried about being in debt, or because they felt they would not belong.
"One of the first things I'll be doing this autumn is rolling up my sleeves and joining my colleagues here who are already working on the development of a more fully elaborated bursary system," she said. "But whatever the system, it must be navigable by people who think they might possibly apply to Cambridge. One cannot and should not overlook the perceptions of whether or not you belong somewhere."
There was much to be done, she said, to tap into the philanthropic movement which helped to fund Oxford and Cambridge for hundreds of years, but which has waned.
She is taking over from Sir Alec Broers, who towards the end of his seven-year stewardship came under fire for catastrophic administration, including the disastrous introduction of a new computer system which lost the university £9m.