Vouchers would be issued to school-leavers to pay flat-rate tuition fees in higher education under radical proposals drawn up by the Conservatives, Fee bands would be axed and local authorities removed from the funding process to make way for the scheme, described by the Tories as "a new way of controlling numbers and expenditure" in higher education while "granting maximum flexibility to potential students".
The scheme is included in a draft document outlining measures aimed at improving funding and widening participation in higher education, drawn up by the Conservative National Policy Group on Higher Education for possible inclusion in the party's manifesto.
The paper,which has been circulatied on the eve of the Conservative conference in Blackpool next week, also proposes replacing student grants and loans with a new privatised loans system; accepting that institutions can charge top-up fees; setting up a national academic credit transfer scheme; and creating a new two year "associate degree" linked to level four General National Vocational Qualifications.
It suggests that all school-leavers "who secured admission and who held the required qualifications (which could be altered)" should be issued with vouchers to cover tuition fees at any recognised university or college.
Under the scheme, present fee bands which range from Pounds 750 for classroom-based courses to Pounds 2,800 for clinical courses would be abandoned, and replaced with a uniform minimum fee covered by the voucher.
This would not rule out top-up fees nor slightly more valuable vouchers for those with better grades "or who have secured admission to higher ranking institutions."
A new loans system replacing the present grants and loans would enable students to borrow to pay top up fees over and above voucher levels as well as maintenance. The scheme would be funded privately, saving an estimated Pounds 1.8 billion a year which could be ploughed back into the sector, the paper says.
Repayments made through the tax or national insurance system could be spread over a long period, and a real rate of interest charged. This would allow higher borrowing levels, and permit loans to be povided for a wider range of students, such as part-timers and postgraduates who currently receive little financial help.
The policy group, whose recommendations are being considered by Gillian Shephard, Secretary of State for Education and Employment, also wants the Higher Education Quality Council to oversee a new national credit transfer scheme to enhance diversity and choice in the sector.
And it has called for a new interim qualification, the two year "Associate Degree", to be introduced to replace Higher National Diplomas.