Ron Dearing's report is published next week

Students' Tuition Fees Blow

The long-awaited report by Sir Ron Dearing into higher education funding is due to be published next week, with the universities predicting a £3 billion shortfall by the year 2000 unless radical change is implemented. At the moment, undergraduates who take out loans to cover their living expenses make repayments after leaving university, but their fees are paid by the state.

The Dearing report is expected to recommend that students repay about £1,000 for each year at college - out of the average annual cost of £4-£5,000. The money could be repaid over a lengthy period, but higher earners could pay their debt off more quickly. One possible mechanism for this is through higher national insurance contributions.

The Government knows that such a move would provoke a huge political row, with accusations that it would restrict higher education to those from better-off families. Possible responses include scholarships for poorer students and tighter means-testing of the existing loans system.

When student loans were introduced seven years ago, it was in the face of strong opposition from Labour, but the party's position has shifted since then. Before the election, current Education Secretary David Blunkett admitted that Labour no longer opposed maintenance loans. He said he was "not persuaded" of the need for tuition fees to be repaid - but he was awaiting the outcome of the Dearing report.

Shadow education and employment secretary Stephen Dorrell said that the Government should study Sir Ron's conclusions in detail before deciding how to tackle the problem. Liberal Democrat education spokesman Don Foster said the "additional money urgently needed for higher education should come from a funding partnership of more money from students, through the conversion of maintenance grants into loans, more money from employers, and more money from the state."

The National Union of Students said it would remain "fiercely opposed" to any suggestion that students should pay towards their tuition costs, whatever means were taken to make such a "graduate tax" more palatable. A spokesman said the NUS had taken what it considered a "radical" step in finally accepting that graduates should contribute towards their living costs, "but to include tuition fees in the debt graduates are expected to repay would be a step too far."