University tuition is set to rise with inflation to £10,500 under the new Labour government, despite the party previously vowing to scrap them altogether.
Officials have put together plans that would see tuition fees, which have been frozen for the last seven years, increase by 13.5 per cent in the next five, the Times reports.
The current talks regarding university finances comes as a Whitehall source branded the current tuition system as ‘unsustainable’.
Noting that no decision would be made without Rachel Reeves approval, the source told the publication: ‘The current system is unsustainable and we need to raise tuition fees
‘But at the same time we need to look at maintenance grants to help those who can least afford it.’
The proposed plans will also see maintenance grants, which provided up to £3,500 to poorer students, restored after they were scrapped by the Conservatives in 2016.
It comes as education secretary Bridget Phillipson said that while she did not want fees to rise, the value of them had ‘eroded’.
Expressing her concern for the university sector, she told LBC: ‘It’s not something that I want to go to, but I do recognise that over time the value of the fee has eroded.
‘It hasn’t gone up in a very long time. The system we have got overall is the worst of all worlds.’
She added: ‘We will deliver improvements on the system by the end of the parliament.
‘I would hope to do so as soon as I can because I recognise the challenge is big. What I would say is that it’s highly complex.
‘It is really complicated in terms of how we deliver a fairer system. And we are working through all the modelling around that to look at what the options might be.’
Around 40 per cent of universities are predicted to be in a deficit for the most recent academic year, including some Russell Group universities.