The bandwagon is rolling for some form of graduate tax. The executive of the Committee of Vice Chancellors and Principals is pushing hard on the idea of an income-contingent loan, a scheme operating in Australia. The political parties are moving towards adopting a commitment to some form of student loan. In the meantime, the existing student loans scheme continues to fail to meet the needs of anyone.

It is interesting how quickly the debate has moved on. The original ideas for a loan scheme to provide only full-time student maintenance have disappeared. Tuition fees as well as maintenance are at the top of the agenda. The question is what kind of loan scheme rather than whether we should have one at all.

We urgently need to have a very different kind of debate about the impact of any such scheme on the nature of higher education in this country. It will induce fundamental changes in our sector. Will the majority of full-time students continue to study away from home? What will happen to all the student residences if they do not? Will there be pressure to provide full-year programmes to cut the three or four year period for first degrees? Will there be pressure to increase opportunities for students to "work their way" through college to limit debt?

We also need to remember that nearly a third of students are part-time. They now pay both tuition fees and maintenance. Will any new scheme include part-time students, or will we continue to treat them as the underclass of the sector? And importantly, what type of higher education are we trying to support?

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If we want to encourage and facilitate an increasing number of students participating in higher education, we need a scheme which is buoyant, which encourages institutions to expand rather than contract. If we are to encourage increased involvement of people currently seriously under-represented in higher education, we need to think about the scheme in terms of class, gender and ethnicity.

We also need to learn from the fiasco of the existing students' loan scheme, and the proposal to levy "top-up fees". We need a scheme which is simple to administer and cheap to set up and operate. The top-up fee proposal is flawed in practice and principle. Some colleges say it will cost around Pounds 200 per student to collect the levy. By the time we have added to the hardship funds (as proposed by the CVCP) and non-payments, we could find ourselves even worse off.

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We need a scheme for funding higher education which is fair and equitable. It should be available to all students regardless of their mode of attendance, and recognise that current definitions of full- and part-time studentship are unsustainable. It should be simple to administer and operate and it should be a partnership between all who benefit from higher education, the individual, the employer, and the state. It should address the historic and present funding problems within the sector, across and between institutions. It should bring new resources and encourage further expansion.

In the meantime, we could re-solve some problems if we charged full tuition and maintenance fees to those who have been privately educated. I have never understood why people who pay for primary and secondary education for their children, often through tax efficient schemes, should not do the same at further and higher education levels. Given a significant presence of the privately educated in universities and colleges, it would be a welcome addition to the sector's resources. It would also be fair, easy to administer and equitable. But it might not be a vote winner.

Mike Fitzgerald is vice chancellor of Thames Valley University.