It follows plans by the UK Government to increase the amount it charges Guernsey for higher education places.

Many Guernsey students do not return to work in the island so the States Education Department is carrying out a review of the current grant system.

No decisions have been made but one option being considered is to set up a loans system similar to the UK.

Education Minister Martin Ozanne warned it could mean students having to contribute more towards their higher education and more young people staying in Guernsey to study.

He said: "We may well be offering alternatives in Guernsey to start with, perhaps foundation courses.

"Our college of further education could do more higher level education.

"But we have got to look at it in a responsible way. We know the UK is going to be charging us more and we might be severely curtailed because of the economic situation in the island in 2008."