Tuition fees 'likely to increase'

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The interest students have to pay on the loans they use to cover fees could also rise sharply, the Higher Education Policy Institute (Hepi) said.

Some universities want the power to charge fees of £8,000 per year and ministers have promised to review the system in 2009.

The Hepi study suggested that raising the £3,000 cap on fees could hit students from the poorest backgrounds.

Universities may have to waive fees above this level for the poorest students in an effort to make sure working class applicants are not put-off, the report said.

"Although the outcome of the 2009 review cannot be predicted, there are likely to be influential voices in both the higher education sector and the Government arguing for a rise in the maximum fee," it said.

The institute suggested options for a new fees regime which could see students charged a real rate of interest on the Government loans they take out to pay for their fees.

Currently the loans - which mean students pay nothing towards their fees until after graduation - are charged at a zero real rate of interest.

Another option would be for students to pay any fees above the current £3,000 limit as they study, the report said.

Higher education minister Bill Rammell said it was too early to discuss future tuition fees. "The Government has always been clear that there will be no change to the current fee arrangements until after a thorough independent review of the first three years of the variable fees regime," he said.