Will students in England soon need top-up loans to pay for their top-up tuition fees of £5,000 or even £7,000?
Yesterday the National Union of Students annual conference abandoned its party line on arguing for free higher education in favour of joining in a more complex debate about future funding.
"Just shouting 'free education' would not work," the newly elected president Wes Streeting told delegates in the Winter Gardens at Blackpool. But the vote to drop the free education policy was narrow (41 votes) and the argument is far from over.
Today's report by the respected Higher Education Policy Institute (Hepi) lays bare some of the complications that the government faces if ministers attempt to raise the £3,300 cap on fees after the promised 2009 review.
The main problem is the massive interest rate subsidy to students to keep loans at a zero real interest rate - more than £14bn in steady state, estimates Hepi. So increasing fees means increasing the subsidy to students which means less for universities, or indeed other sectors of education.
That can't go on - but shifting the burden is going to be painful, as Hepi warns as it looks at various scenarios, including a "top-up loan" with a real rate of interest for fees above £3,300. It would not be a commercial rate but one reflecting the rate at which the government can borrow but it might deter poor students from the more expensive courses or universities, as the report warns.
NUS campaigners will use some of the Hepi report as ammunition but I bet they ignore one statement. "The current system of higher education funding in England is, taken as a whole, possibly the most progressive in the world."
