Tuition fees could be more than doubled to £7,000 a year and students made to pay fees before they start their courses, an authoritative study suggests today.
The move could lead to mortgage-style debts for graduates, with student loans taking significantly longer to pay off. Higher fees could put at risk the government's efforts to encourage more students from the most disadvantaged areas to apply to university, the Higher Education Policy Institute report warns.
The government has promised a review of student funding in 2009 to assess the impact of the top-up fee system on the recruitment of students from the poorest homes. Universities are lobbying hard for the £3,300 cap to be lifted but today's report suggests students could suffer a double blow if top-up fees are increased and the multimillion pound subsidy on student loans is not increased.
The taxpayer pays £1.4bn a year to subsidise loans to students but that bill could double as top-up fees increase, leaving ministers the choice of ploughing more taxpayers' money into universities, forcing the universities to take a cut or cutting the subsidy and charging students more in interest. Students could also be asked to pay fees upfront.
Bahram Bekhradnia, director of the institute, said: "We show very clearly that there are no easy answers here. Unless the government increases the subsidy, either universities or students will have to pay more. Students will pay more anyway because of higher loans, it's a question of how much more "
The report examines the potential costs to students, universities and the government if fees rise to £7,000.
Wes Streeting, vice-president of the National Union of Students, said bringing in commercial interest rates on student loans would mean graduates took far longer to pay back their debt.
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