Tuition fees should be slashed to £7,500 – and maintenance grants should be reintroduced, an independent review has recommended.
The Post-18 Education and Funding review, led Dr Philip Augar, says overall university sector income would be protected by an increased Government contribution to teaching costs.
The panel found student loans are not well understood and suggests the system name should be changed to the Student Contribution System.
It also says the system should be overhauled to reduce in-study interest charges but to increase the proportion of loans that is eventually repaid.
Proposals for disadvantaged students include the reintroduction of maintenance grants of at least £3,000 a year.
Prime Minister Theresa May is expected to welcome a number of the recommendations in a speech on Thursday.
She will say: “I was not surprised to see the panel argue for the reintroduction of means-tested maintenance grants both for university students and those studying for higher technical qualifications.
“Such a move would ensure students are supported whichever route they choose, and save those from the poorest backgrounds over £9,000.
“It will be up to the Government to decide, at the upcoming Spending Review, whether to follow this recommendation.
“But my view is very clear: removing maintenance grants from the least well-off students has not worked, and I believe it is time to bring them back.”
Mrs May will also call for reform to tuition fees to ensure value for money for students and the taxpayer.
She will say that while the majority of courses provide good outcomes for students, this is no longer true across the board, and many courses do not cost £9,000 per student per year to teach.
Despite the Government boosting education or training places for every 16 to 19-year old, rolling out T Levels, and creating high-quality apprenticeships, the Prime Minister will say more must be done for the 50% of young people who do not go to university.
Dr Augar, chairman of the panel, said: “Our work revealed that post-18 education in England is a story of both care and neglect, depending on whether students are amongst the 50% of young people who participate in higher education or the rest.
“The panel believes that this disparity simply has to be addressed.”
He added: “Our proposals are designed to build on the considerable achievements of our universities – one of the UK’s world class industries – with a particular focus on the economy’s needs and improving value for money for students and taxpayers.
“We also seek to rebuild further education, for too long the Cinderella sector, and see technical and vocational education as a means of addressing the country’s skills gap.
“We are firmly of the view that post-18 education should be a lifelong experience available to all, irrespective of age, situation or income.
“Our proposals are intended to create such a system.”
A total of 53 recommendations for Government cover the 50% of young people who do not attend higher education, as well as the 50% who do.
Mrs May, who launched the review last February, will conclude: “I have always believed and I still truly believe that, if this is to be a country that works for everyone, then we have to make education work for everyone.
“But only by taking action now will we be able to deliver the lasting change and improvements we need in further and higher education.
“And give every child and young person in this country the education they need to reach their true, incredible potential.”
Tuition fees in England were trebled in 2012, and the vast majority of courses now cost the maximum, £9,250 per year.
According to estimates by the Institute for Fiscal Studies (IFS), the average student can now leave university owing more than £50,000.
But the panel is recommending the cap on the fee chargeable should be reduced to £7,500 per year, and could be introduced by 2021/22.
Responding to the review, the Fair Access Coalition said: “A lot of progress has been made in widening access to higher education, but we need to be careful that these gains are not sent into reverse.
“There is a lot to be welcomed in the Augar recommendations.
“An increase in maintenance support, more support for part-time degrees, greater flexibility to gain a degree through bitesize courses, a funding boost for further education, are all welcome steps.
“But they will do nothing to improve social mobility overall if the funding for widening participation activity is cut.”