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| Student tuition fees: Browne review urges no limits | Student tuition fees: Browne review urges no limits |
| (about 2 hours later) | |
| By Sean Coughlan BBC News education correspondent | By Sean Coughlan BBC News education correspondent |
| Universities in England should be able to charge unlimited fees, a major review of university funding has recommended. | Universities in England should be able to charge unlimited fees, a major review of university funding has recommended. |
| Lord Browne's review calls for the £3,290 cap on fees, which students borrow in loans, to be scrapped. | Lord Browne's review calls for the £3,290 cap on fees, which students borrow in loans, to be scrapped. |
| Instead it proposes a free market in fees - setting out models of charges up to £12,000 a year for a degree course. | Instead it proposes a free market in fees - setting out models of charges up to £12,000 a year for a degree course. |
| The UCU lecturers' union said the plan was "the final nail in the coffin for affordable higher education". | The UCU lecturers' union said the plan was "the final nail in the coffin for affordable higher education". |
| However, Lord Browne's review makes clear that universities that charge more than £6,000 a year would lose a proportion of the fee to help cover the cost of student borrowing. | However, Lord Browne's review makes clear that universities that charge more than £6,000 a year would lose a proportion of the fee to help cover the cost of student borrowing. |
| Lord Browne told BBC Breakfast: "We have taken off the cap but we haven't taken off the restrictions." | Lord Browne told BBC Breakfast: "We have taken off the cap but we haven't taken off the restrictions." |
| He said all universities were different and needed different amounts of money to retain their world class status, but he predicted that few would put fees very high. | He said all universities were different and needed different amounts of money to retain their world class status, but he predicted that few would put fees very high. |
| He acknowledged graduates would be paying significantly more back in their tuition fee and maintenance loans but insisted they were not being left with "mortgage-style debts". | He acknowledged graduates would be paying significantly more back in their tuition fee and maintenance loans but insisted they were not being left with "mortgage-style debts". |
| "They would be paying the same interest rate as the government uses to borrow. They will only pay it back when their earnings go above £21,000," he said. | "They would be paying the same interest rate as the government uses to borrow. They will only pay it back when their earnings go above £21,000," he said. |
| "If you choose to go into a job which doesn't pay very much or if you choose to go out of the workforce to build a family, you won't have to pay it back." | "If you choose to go into a job which doesn't pay very much or if you choose to go out of the workforce to build a family, you won't have to pay it back." |
| The report comes ahead of next week's comprehensive spending review, in which major cuts to higher education funding are expected. | The report comes ahead of next week's comprehensive spending review, in which major cuts to higher education funding are expected. |
| Ministers will now have to respond to the proposals for reforming university funding - with the threat of a Liberal Democrat backbench rebellion. | Ministers will now have to respond to the proposals for reforming university funding - with the threat of a Liberal Democrat backbench rebellion. |
| Universities 'could close' | Universities 'could close' |
| Increasing fees would mean a direct reversal of personal pledges made at the election by Liberal Democrat MPs - and will cause deep political difficulties for the coalition government. | Increasing fees would mean a direct reversal of personal pledges made at the election by Liberal Democrat MPs - and will cause deep political difficulties for the coalition government. |
| The Liberal Democrats' own youth section has branded the fee rise as a "disaster". | The Liberal Democrats' own youth section has branded the fee rise as a "disaster". |
| Greg Mulholland, Lib Dem MP for Leeds North West, said he would vote against the plan. | Greg Mulholland, Lib Dem MP for Leeds North West, said he would vote against the plan. |
| But Business Secretary Vince Cable, who is trying to reach a deal with the Conservatives that the Lib Dems could support, told the BBC the proposals were "probably on the right lines". | But Business Secretary Vince Cable, who is trying to reach a deal with the Conservatives that the Lib Dems could support, told the BBC the proposals were "probably on the right lines". |
| The far-reaching recommendations set out a system in which much of the cost of a degree would be transferred from the taxpayer to the student. | The far-reaching recommendations set out a system in which much of the cost of a degree would be transferred from the taxpayer to the student. |
| Shadow university secretary John Denham said the report reflected the belief that teaching budgets would be cut by around two-thirds. | Shadow university secretary John Denham said the report reflected the belief that teaching budgets would be cut by around two-thirds. |
| "This is a massive cut even when set against the coalition's aim to cut spending by 25%," he said. | "This is a massive cut even when set against the coalition's aim to cut spending by 25%," he said. |
| The report seeks to balance much higher charges with support for applicants from poorer families. | The report seeks to balance much higher charges with support for applicants from poorer families. |
| This more competitive market would also mean that for the first time universities could go out of business, says the report. | This more competitive market would also mean that for the first time universities could go out of business, says the report. |
| Universities must compete over students, fee levels and against new providers, the review panel recommends: "If they fail... they might ultimately close or be taken over." | Universities must compete over students, fee levels and against new providers, the review panel recommends: "If they fail... they might ultimately close or be taken over." |
| Higher interest rates | Higher interest rates |
| Lord Browne proposes that the government would guarantee to underwrite fees up to £6,000 per year - but universities would be allowed to charge any amount above that. | Lord Browne proposes that the government would guarantee to underwrite fees up to £6,000 per year - but universities would be allowed to charge any amount above that. |
| Universities would have to pay an increasing "levy" on fees above £6,000 - but even when charging £12,000, they would be able to keep almost three quarters of the fee. | Universities would have to pay an increasing "levy" on fees above £6,000 - but even when charging £12,000, they would be able to keep almost three quarters of the fee. |
| As now, students would not have to pay fees up-front, but would receive a loan. | As now, students would not have to pay fees up-front, but would receive a loan. |
| But they would not have to start repaying it until their earnings reached £21,000 per year, up from the current level of £15,000. | But they would not have to start repaying it until their earnings reached £21,000 per year, up from the current level of £15,000. |
| The report recommends that students should pay higher interest rates on these loans, set at the government's rate of borrowing - currently 2.2% - plus inflation. | The report recommends that students should pay higher interest rates on these loans, set at the government's rate of borrowing - currently 2.2% - plus inflation. |
| All students will be able to borrow £3,750 per year - and young people from families earning less than £25,000 will receive an additional grant of £3,250. | All students will be able to borrow £3,750 per year - and young people from families earning less than £25,000 will receive an additional grant of £3,250. |
| There have been warnings that middle-income families will face a particular financial squeeze from such a fee hike. | There have been warnings that middle-income families will face a particular financial squeeze from such a fee hike. |
| "There is a feeling that the rich can afford it - and the poor will quite rightly be protected - but people in the middle could find themselves really penalised," says Justine Roberts of the Mumsnet website. | "There is a feeling that the rich can afford it - and the poor will quite rightly be protected - but people in the middle could find themselves really penalised," says Justine Roberts of the Mumsnet website. |
| Watchdogs merged | Watchdogs merged |
| There are also radical proposals to shake up how higher education is administered, with four funding bodies and regulators being merged into a single Higher Education Council. | There are also radical proposals to shake up how higher education is administered, with four funding bodies and regulators being merged into a single Higher Education Council. |
| This would take over responsibility for standards, strategic subjects, access for poorer students and resolving disputes with students. | This would take over responsibility for standards, strategic subjects, access for poorer students and resolving disputes with students. |
| And there are also steps to ensure the quality of degree courses. | And there are also steps to ensure the quality of degree courses. |
| University lecturers should be required to have teaching qualifications - and students should reach a minimum threshold of qualifications before receiving student loans. | University lecturers should be required to have teaching qualifications - and students should reach a minimum threshold of qualifications before receiving student loans. |
| This summer saw an unprecedented demand for places - with thousands of well-qualified students missing out on places. | This summer saw an unprecedented demand for places - with thousands of well-qualified students missing out on places. |
| The report calls for the number of places to be expanded by 10% over three years. | The report calls for the number of places to be expanded by 10% over three years. |
| Private universities | Private universities |
| There are also suggestions for a more diverse university system, which would encourage the introduction of new providers and different ways of studying. | There are also suggestions for a more diverse university system, which would encourage the introduction of new providers and different ways of studying. |
| Part-time students and those studying in private universities would be able to claim student support. | Part-time students and those studying in private universities would be able to claim student support. |
| The Open University welcomed the report as a "landmark day for part-time higher education" - which would help to drive social mobility. | The Open University welcomed the report as a "landmark day for part-time higher education" - which would help to drive social mobility. |
| If accepted by the government, the reforms are expected to take effect in the academic year beginning in 2012 at the earliest. | If accepted by the government, the reforms are expected to take effect in the academic year beginning in 2012 at the earliest. |
| Paul Marshall, executive director of the 1994 Group of research-intensive universities, welcomed the review as "the first progressive step" towards increasing funding for universities. | Paul Marshall, executive director of the 1994 Group of research-intensive universities, welcomed the review as "the first progressive step" towards increasing funding for universities. |
| But the Million+ group of new universities said it would deter poorer students, and would "undoubtedly mean that some students who would have gone to university will decide not to go". | But the Million+ group of new universities said it would deter poorer students, and would "undoubtedly mean that some students who would have gone to university will decide not to go". |
| The National Union of Students said students would be left with "crippling levels of debt and many universities face utter devastation as a result of horrific cuts". | The National Union of Students said students would be left with "crippling levels of debt and many universities face utter devastation as a result of horrific cuts". |
| Elsewhere in the UK, Scottish students studying in Scotland do not have to pay any fees. In Northern Ireland and Wales, fees are charged up to a maximum of £3,290. | Elsewhere in the UK, Scottish students studying in Scotland do not have to pay any fees. In Northern Ireland and Wales, fees are charged up to a maximum of £3,290. |