The student loans system is at "tipping point" due to Government miscalculations and problems with collecting repayments, a cross-party group of MPs has warned.
In a critical new report, the Commons Business Select Committee said that the current system is under threat, and an urgent review is needed to address the issue.
Figures published earlier this year show that the Government's latest estimate - known as the "RAB charge" - is that around 45% of loans taken out under the new system will never be repaid.
Changes to tuition fees will "protect those on lower incomes" who are now applying in "record numbers", according to the Government.
A Business Department spokesman said:
Through these reforms we are protecting those on lower incomes and people from disadvantaged backgrounds are now applying in record numbers.
Private colleges have an important role to play in providing students with an alternative to university.Where standards are not being met we are taking action.
The process to designate courses for student support has been strengthened considerably and where we have found evidence of abuse, we have taken swift and decisive action.
The trebling of tuition fees to £9,000 per year will "cost the public purse more than the old one", a union leader will warn.
Sally Hunt, from the University and College Union, will say the Government had claimed to have settled funding for a generation.
But the reality is that it is now a disastrous, unstable mess.
Despite the tripling of tuition fees, experts now think we are not far away from the point when this new system will actually cost the public purse more than the old one.
Meanwhile, the further education loans system has been completely abandoned for apprenticeships and is running woefully under target for other adults.
All this means funding must be an issue at the general election.
Funding for colleges and universities should take centre stage at the next general election as it has become such a "disastrous mess" under the coalition, according to a union leader.
General Secretary of the University and College Union, Sally Hunt, will also hit out at the Conservative-lead Government for their "bundled" £9,000 a year tuition fees rise and the risk it poses to the public purse.
Ms Hunt, speaking at the union'a annual conference in Manchester, will tell members the Government's "American dream" of allowing more private colleges into the higher education system has become the "English nightmare".
She will dub the Government's higher education funding policy "lamentable" and warn of universities and colleges torn apart by "poor attendance, huge debts, low standards."
Shadow universities minister Liam Byrne has waded into the debate stating David Cameron's finance system has lost credibility, he said:
"David Cameron's student finance system has lost its last shred of credibility."
He also stated that degree costs have trebled previous to this announcement which could now damage "public confidence."
The Government "needs to look again" at student fees after a change in university finances in 2012, an education think-tank said.
The new system will benefit graduates who earn very little in their lifetime.
But for many professionals, such as teachers, this will mean having to find up to £2,500 extra a year to service loans at a time when their children are still at school and family and mortgage costs are at their most pressing.
With recent revelations about the proportion of loans unlikely to be repaid, it seems middle-income earners pay back a lot more but the Exchequer gains little in return.
We believe that the Government needs to look again at fees, loans and teaching grants to get a fairer balance.
The report comes just weeks after it was disclosed the Government believes around 45% of loans will not be paid back, close to the 48.6% threshold at which experts thinks they will begin to lose more money than it makes.
A majority of students leaving university now will still be paying back student loans in their early 50s, according to new research.
A new student finance system was introduced in 2012, but how does it compare with the old system?
Figures from a study commissioned by The Sutton Trust
- Tuition fees were raised to a maximum of £9,000 a year in 2012, almost treble the previous fee which stood at around £3,000.
- Students do not have to start repaying their loans until they have graduated and are earning £21,000 a year, at a rate of 9% on all income above this threshold.
- In comparison, under the old system there was a £15,795 threshold.
- Debts are written off after 30 years.
- Those studying for a degree now will also pay an above-inflation interest rate of up to 3%, which begins while they are still at university. Previously, there was no real rate of interest.
- A typical student now leaving university will have more than £44,000 worth of debt from loans - without accruing interest after graduation - around £20,000 more than they would have done under the old system, according to the research.
A majority of students will still be paying back university tuition fee loans when they are in their early 50s and many will never repay their debt, new research suggests.
Almost three-quarters of graduates will have at least some of their loan written off, The Sutton Trust commissioned study said.
The findings showed that the new student finance system, implemented in 2012, could leave some people vulnerable who are trying to cover loan repayments at a time when family costs are high.
Nigel Farage has blamed a 1980s advert starring Maureen Lipman for too many students studying what he says are poor quality university degrees.
The actress starred in an advert for BT in which she tells her grandson that getting an 'ology' made him a scientist.
In a phone-in on the Daily Telegraph website, the UKIP leader said:
"I think we are sending too many youngsters to university. I think we are encouraging people to go and get degrees, in many cases not particularly good degrees
"I blame Maureen Lipman for the whole thing. If you remember the advert, 'oh he's got an 'ology'."
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