UK students set for soaring costs

Lord Browne, the former head of BP, is spearheading a review of student finance with a report expected to be published in the coming weeks.

A draft report produced on Monday and scheduled for publication on October 11 was not convinced by the idea of a tax collected from graduates after they have left university, according to reports.

The report`s anticipated recommendations would result in new graduates facing an extra £5,000 burden of debt in addition to the current average of £20,000, it was claimed.

Among the options being considered by the panel are a limit on the amount of funding per student supplied by the government, with universities being forced to subsidise teaching from their own coffers.

This measure could see the cap on tuition fees removed completely, but would be likely to result in reduced applications for the most expensive courses, particularly from poorer students.

An alternative would see banks assume the government`s role of paying universities in advance for teaching costs before recouping the debt through graduate loan repayments.

The recommendation of higher tuition fees would appear to contradict statements by Vince Cable, the Business Secretary, earlier this summer when he spoke in favour of a tax on graduates.

A source with knowledge of the review reportedly claimed that the proposals will establish a competitive market between universities, with fees likely to rise to between £6,000 and £7,000.

Tuition fees are currently capped at £3,290 a year, with virtually every institution charging the maximum amount.

But a university source reportedly expressed concerns the recommendations would not sit well with the Liberal Democrats, who are opposed to fee rises, and suggested Lord Browne was "operating in a parallel universe".

The Browne Review could also result in universities incurring extra costs, with student loans set to be extended to part-time students for the first time.

It comes as Universities are bracing themselves for massive funding cuts in the Comprehensive Spending Review, with budgets expected to be brought down by up to £5 billion.

The expected increase in fees is likely to be introduced in 2013.

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