- annual tuition fees - currently a flat rate of £1,125 (£1,150 for 2004/05) - could be varied, from nothing up to a maximum of £3,000 from 2006
- families earning less than £30,000 would still get help - on a sliding scale - with up to the first £1,125 of fees (rising with time)
- unlike now nothing would be paid "up front" - so students (or their parents) would no longer have to pay while they were at university
- instead fees would be recovered from graduates, starting once their annual income passed £15,000
- repayments would then be a minimum of 9% of earnings per year
Because they would "top up" what universities receive from the capped fee (£1,125 this year) to more like the actual cost of providing the course - which the government says is about four times that on average.
The actual cost varies from course to course and institution to institution. In broad terms, courses in science and engineering are more expensive to run than, say, English or psychology, because of equipment costs.
Why does the government want to charge more'
The government says graduates benefit from having gained a degree - through wider career opportunities and earnings - so ought to contribute something.
A counter-argument is that the biggest beneficiary from having a more highly educated workforce is the national economy as a whole, so the nation ought to be prepared to invest in it.
Would the higher fees apply to all universities'
Not necessarily. In fact the government doesn't use the term "top-up" fees because they are properly "differential fees".
Its white paper said: "We will give universities the freedom to set their own tuition fee, between £0 and £3,000."
So in theory you might pay nothing - though nobody has rushed to advertise such a course.
The bigger dilemma for university vice-chancellors is what level of fee to charge for different courses - or whether to charge the same for all.
Part of the reason is that applications have been declining for many of the science and engineering courses that are the most expensive for them to offer.
So they might decide to relate fees more to a course's popularity than to the cost of providing it.
But there is another factor: as a vice-chancellor, do you really want to have a reputation as a university that offers "cheap" courses' This argues towards charging £3,000 for everything.
Also, to be allowed to charge higher fees a university will have to satisfy the new "access regulator" that it has policies to increase the take up of university places by people from the most disadvantaged groups in society, which is what is meant by "widening access". In practice this is unlikely to be a significant hurdle.
Won't poorer students be put off by the cost'
Research evidence suggests that is indeed the case. The people most likely to be deterred by the prospect of graduating with substantial debts - and not having full-time earnings while they are at university - are those the government most wants to attract into higher education.
So not only is it abolishing up-front fees but limited maintenance grants will be restored from 2004.
Students with family incomes of less than £21,185 will get an amount calculated on a sliding scale.
The original plan was that those whose families earned less than £10,000 would receive the full £1,000 a year.
The government said it believed 30% of students would be eligible but within weeks of publishing the policy, the Education Secretary, Charles Clarke, admitted the threshold was too low.
He has since raised it to £15,200.
In addition, official student loans will continue. Everyone qualifies for 75% of the maximum, regardless of income, and the rest is means-tested.
The maximum amounts for 2003/04 are £4,000 for students living away from home (£4,930 in London) and £3,165 for those living at home.
From 2005 you will start repaying once your graduate income passes £15,000. Someone earning £20,000 a year, for example, would repay £8.65 a week.
I heard lots of people don't pay fees anyway
The latest official statistics, which are for the 2001/02 academic year, show that 43% of students were assessed to make no contribution at all towards their fees. Of the remainder, 16% made a partial contribution and 41% paid the lot.
There is a marked difference between "dependent" students - those whose families are liable - and "independent", that is, aged over 25 or married for two years or supporting themselves for three years before their courses began.
- Dependents
- 240,000 (36%) paid nil
- 123,000 (18%) paid some
- 312,000 (46%) paid all
- Independents
- 94,000 (88%) paid nil
- 4,000 (4%) paid some
- 9,000 (8%) paid all
The issue is already different in England, Wales, Scotland and Northern Ireland and the government's plans complicate it further.
In Wales, the Assembly is to be given devolved power over student finance as part of the government's new legislation.
But it has already brought back a limited "learning grant", from the 2002-03 academic year.
This has meant about £750 for poorer students from Wales - those with "residual family income" less than £15,000 - wherever in the UK they studied.
The Assembly says upfront fees will go in 2006, as in England.
But it will not introduce variable fees at universities in Wales, though Welsh students studying in England may be liable.
The Assembly also intends to provide a loan to cover fees - including "top-up" fees.
The Northern Ireland Assembly - before it was suspended - also approved scrapping up-front fees, but said this would be too expensive and would contravene equality measures because offering free tuition to all would benefit the wealthy more than the disadvantaged.
For now, 14,000 students from low-income families in Northern Ireland are eligible for bursaries of up to £1,500.
The Scottish Parliament has always had devolved power over student finance and decided to scrap up-front tuition fees for Scottish students at Scottish universities in 2000-01.
In fact, students throughout the UK are liable for the fees - the way Scotland gets around this is to pay them for students and reclaim the money later.
So graduates contribute £2,000 to a fund for hardship grants for poorer undergrads, starting to pay this when their earnings are at least £10,000.
All parties are against charging top-up fees. But MSPs are investigating whether extra income from higher fees for universities in England could disadvantage Scottish universities - and if so, what they should do about it.
Can't you make yourself bankrupt and avoid paying anything'
The government said it would change the law to close a loophole that would have allowed graduates to escape paying much of their student debt by becoming bankrupt.
Guidelines from the government's Insolvency Service said student loans were on the list of debts that could be cancelled out by bankruptcy.
It is not clear, by the way, how tuition fees will be recovered from students from other European Union countries who come to study in England.
My friend at university got loads of money from her dad but because her parents were divorced and she was assessed on her mum's income - which was almost nothing - and didn't have to pay fees
Yes, the government is changing the regulations from 2004, to an extent, in that if a student lives with one of their parents, any step-parent's (or partner's) income will be included in the assessment.
