Top-up fees will complicate life for students and the charities that provide grants. Information on the new regime and on managing finances is vital, says Harriet Swain

It used to be so simple for students. So long as they remembered to fill out their grant form reasonably on time, all they had to do was turn up at university, pay the cheque waiting for them into an account and concentrate on reading books and eating spaghetti for the next three years. The only blips on their financial horizon were granny's birthday book tokens.

Few have been able to be this laid-back about money since tuition fees were introduced and loans replaced grants. And when top-up fees are introduced next year, all students, unless they have very rich or very poor parents, will need to research what financial help is available and what to do with a grant if they get one.

And it's not just students who feel daunted by this prospect. Funding providers are also struggling to work out what the new system will mean for them. There are hundreds of trusts and foundations that offer small sums towards the higher education of people who meet their (often very specific) criteria. These range from large charities such as the Elizabeth Nuffield Educational Fund, which gives up to ?3,000 a year to help female students with childcare costs, to a trust that offers financial help for offenders or ex-offenders to study (as long as they haven't been convicted of piracy on the high seas).

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One problem is that most grants are small compared with the debts students will incur by the end of their degree, which are expected to top ?15,000 for a three-year course. Another problem, says Simon Deville, manager of the Educational Grants Advisory Service, is that students usually have to demonstrate a specific educational need rather than just being impoverished. "People who administer relatively small grants are reluctant to make a one-off award if people say they just cannot afford to live," he says.

The irony is that from next year most students are likely to be much better off while they are at university because they will not pay upfront fees - if you ignore mounting debts. This is something that charities have to address, Deville says. "The question for charitable trusts is whether they need to focus funding elsewhere; perhaps give more to further education students or part-time students in higher education," he says. "We want to make sure that educational trusts are flexible enough to ensure (funds) are directed where they are needed."

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The Elizabeth Nuffield fund is already diversifying to help women studying for a first degree not only with childcare costs but also with the costs of caring for a dependent adult with specific needs. Suzanne Berry, administrator of the fund, says this is because of improved state help with childcare. The fund is also considering whether it can do more for further-education students.

Deian Hopkin, vice-chancellor of South Bank University and chairman of Uniaid, a charity that helps young people in higher education to overcome financial hurdles, says many charities are likely to consider a shift in priorities. "Charities will be looking long and hard at the provisions of the new funding packages to see whether they reduce the need for them to intervene for particular students," he says. "It will raise questions about what target audiences they now have."

The business sector is also being urged to reconsider its relationship with universities. The Association of Graduate Recruiters is still trying to get its members - employers looking to recruit graduates to professional jobs at the top end of the market - to think about long-term strategy in its relationship with higher education, says chief executive Carl Gilleard. He says employers have not yet caught up with the implications of top-up fees for recruitment, including the threat to departments in unpopular science subjects where demand for skills is high.

Business sponsorship of students has declined in recent years and is not expected to increase in the near future, but figures out this week show that AGR members are being more generous to graduates. Some 36 per cent offered a bonus to new graduate employees this year, compared with 25 per cent last year. Most bonuses (88 per cent) will be paid when the graduate starts work. However, Gilleard suggests that this is more to do with competition for the best graduates than concerns about variable fees. Last year saw a rise of more than 15 per cent in numbers of graduate-level vacancies and he expects further growth this year. "Employers think more immediately, and the variable-fees issue is only going to be discussed in any detail nearer the time," he says.

Richard Brown, chief executive of the Council for Industry and Higher Education, says business already contributes generously to higher education, not least in paying graduates improved salaries. Instead, he says, it should be up to universities to provide help for their students, especially through endowments and support from alumni.

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This is certainly where most attention has been focused, with institutions announcing ever more eye-catching packages of support in their efforts to impress both the Office for Fair Access and prospective students. After years of build-up, the market has now clearly come to higher education, and competition over bursary levels between the big Russell Group universities has become explicit, with Manchester University so far leading the pack with the offer of a ?10,000-a-year bursary. Most of these incentives are aimed at attracting talented students who will boost the institutions' league-table positions rather than at students who are in financial need.

However, while some institutions have become more openly competitive, this has caused many to become more closed about what their students can expect in the way of financial help. Julie Walkling, an executive member of the Association of Managers of Student Services in Higher Education, says: "On the one hand they want to attract students by saying 'we want to do this', on the other they may want to keep things up their sleeves. Then there will be institutions that don't have too much to offer because they haven't got the money."

Hopkin says: "It has been made quite clear to all of us that discussion or coordination in relation to fees - and by extension bursaries - is not going to be tolerated by the Government because of competition law. Vice-chancellors are discouraged from talking to each other."

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This only increases students' difficulties in working out how much will be available to them when they start university - or, indeed, whether they will be able to afford it at all. Websites have been set up listing sources of money, such as Funderfinder and The Hotcourses Student Money Directory ( org.uk), and most people dealing with student finances expect some kind of comprehensive listing to be developed, but as yet there is no central database available to students into which they can type their financial position, their chosen institution and subject and where they live to learn how much help they will get.

Hopkin, whose Uniaid charity is one of those developing a "diagnostic tool" to help students work out what is on offer, says: "Clearly, once the onus has shifted from the state paying the fees to the student paying them, then the important thing for the student is information."

They also need information on what to do with the money, once they obtain it. The AUA conference heard that it was likely that demand for student money advisers would rise after 2006, and according to Keith Houghton, chair of the National Association of Student Money Advisers, the idea was even floated of bursaries being made conditional on recipients attending money management sessions. Some students will get a large loan, plus an institutional bursary and maintenance grant, and may be able to apply to the Access to Learning Fund, as well as any other funding they might find. "That's a lot of money," he says.

Hopkin says institutions could also benefit from further advice and discussion about the new fees regime. What happens if students move from full-time to part-time study? Will they still be eligible for bursaries? What if students fail to finish their degrees? Will they have to pay the bursaries back? And, perhaps most worrying, will bursaries be offered to tempt people to change from one university to another, opening up the possibility of the best students being creamed off? "I think this could potentially be an issue for institutions if other universities are enticing students away with offers of large scholarships," Hopkin says.

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The prospect of support going to the brightest students rather than those most in need particularly worries the National Union of Students, which wanted a centralised bursary system where money was redistributed equally. Hannah Essex, NUS vice-president (education), says: "We believe that it is business and the community that benefit from an educated workforce and that they should contribute through taxation."