Student loan interest rate shake-up
High-earning graduates are to be charged more for their student loans than those who are less successful, it has been reported.
Interest rates on student loans would be varied so that those who get the most financial benefit contribute the most towards their education.
The move has apparently been agreed by ministers from both sides of the Conservative-Liberal Democrat coalition after months of negotiations over the future of student finance.
The plans, reported by The Times and The Daily Telegraph, emerged ahead of Lord Browne of Madingley's long-awaited review of university funding.
One of his recommendations is likely to involve increasing the tuition fees cap, possibly to £7,000 a year.
The Department for Business, Innovation and Skills (BIS) - which is responsible for higher education - declined to comment on the Government's plans ahead of Lord Browne's report, which is expected to be published on Tuesday.
But it was reported that the detailed changes to student loans were thrashed out this week by ministers including David Cameron, George Osborne, Nick Clegg and Vince Cable.
The interest rate will not only be made variable according to income but raised across the board, it was claimed. Lower-earning graduates could pay back less than the costs they have incurred.
The proposals set the stage for the biggest test yet of Lib Dem MPs' support for the coalition. During the general election, the Lib Dems promised to scrap tuition fees altogether and leader Mr Clegg, now the Deputy Prime Minister, warned in April that it would be "a disaster" if fees were increased to £7,000.
A BIS spokesman said: "Lord Browne is currently undertaking an independent review of university funding and student finance. We will judge his proposals against the need to take into account the impact on student debt, ensure a properly funded university sector, improve the quality of teaching, advance scholarship, increase social mobility and attract a higher proportion of students from disadvantaged backgrounds."