University tuition fees in Northern Ireland should increase to up to £5,750 a year, according to a review.
Students would not be required to begin repaying the loans until they were earning £21,000 a year, the report from Joanne Stuart added.
More students would benefit from a maximum grant, which should be maintained at £3,475, to ensure participation of less well-off groups.
The review was ordered by the Department for Employment and Learning following changes to the student support system in England and Wales.
It said the department should adopt the UK Government's fee structure for students from outside Northern Ireland who study in the province, with a fee cap of £9,000.
For most full-time undergraduates the fee cap could be between £5,000 and £5,750.
Employment minister Danny Kennedy will consider the report's recommendations.
The report said: "I believe that these recommendations provide a fair and sustainable funding model for students, higher education institutions, government and taxpayers."
Mr Kennedy said the report calculated that if the status quo were maintained it would leave a shortfall of £40 million to £65 million a year.
"I am committed to doing what I can to minimise the impact of any such fee increase on Northern Ireland families," he said.