Ministers have been urged to write off a portion of student debt as universities come under mounting pressure amid calls for tuition fee refunds.
Hundreds of thousands of students have signed petitions calling for tuition fee rebates on the basis that online lectures are no substitute for face-to-face teaching and should not cost up to £9,250 per year.
They also point out that they are missing out on university life such as societies, clubs and sports as most students have now been told not to return to campus until mid-February at the earliest.
Vice-Chancellors have so far resisted calls for blanket rebates but are understood to favour proposals for the Government to write off a section of debt as a way to address student complaints.
“Sector figures have been asking the Government about whether a lower cost way to give students a financial break is by going through the Student Loan Company,” a university source said.
“It is a way of addressing hardship students have faced rather than giving everyone some money back.”
The issue was discussed this week at a meeting of the higher education task force which is attended by senior Department for Education (DfE) officials, the university minister and vice-Chancellors. Nick Hillman, director of the Higher Education Policy Institute, said that this idea has been “gathering steam”, adding that it would have “minimal public cost”.
He explained that since around half of all student loans are never repaid – because a significant number of graduates earn enough to pay off their debt in full – this move would not be particularly costly to the taxpayer.
“It wouldn’t put any more cash in students’ pockets, but it would send a signal that society and the Government understand that it is an unprecedentedly difficult time to be a student,” he said.
“If students are worried about the level of debt they are accruing, this would help with that.”
On Friday MPs and peers announced an fresh inquiry to consider calls for tuition fee adjustments and rent rebates as a result of the impact of Covid-19 measures.
Last year the petitions committee launched an investigation into the issue, and concluded that the Government should consider making payouts to students who are entitled to a refund.
At the time, ministers rejected this suggestion, saying universities should pay for any compensation claims themselves.
They suggested that where the contract between a university and a student had been breached, the student deserved a refund.
But earlier this week the Prime Minister said he is “looking very carefully” at what is happening to students, adding that the Government will “see what arrangements the unis are making to deal with the reasonable concerns of many students”.
The Office of the Independent Adjudicator (OIA), the highest authority for student complaints, has said that universities have to provide students with an experience "broadly equivalent" to what they were promised – or else consider handing out refunds.
The regulator said that if universities cannot deliver what was promised to students, they will "need to consider how to put that right".
A DfE spokesperson said: “The government will continue to prioritise the full return to education settings as soon as possible.
“We recently announced up to £20 million to help students most in need of support in these exceptional circumstances, for example those struggling to cover accommodation costs as a result of the pandemic, in addition to an existing £256 million universities can use to help students.
“Universities are responsible for their tuition fees, but the Government has been clear they are expected to maintain quality and academic standards and the quantity of tuition should not drop. They should seek to ensure all students, regardless of their background, can access their studies remotely.”