Students and university chiefs have given a broad welcome to the government's plans to shake up student funding.

Ministers are examining plans to bring back grants - at least for less well-off students and to introduce a graduate tax so that those who have benefitted from higher education can help to fund it.

The announcement of a review into student funding comes after considerable pressure from students and education chiefs, who argued that worries about debt could deter students from poorer backgrounds from going to university.

The government wants to widen access to university so that half of all young people go into higher education.

The National Union of Students has waged a campaign for 'Grants not fees'.

It calls for the abolition of tuition fees and the introduction of a targeted maintenance grant, "to ensure that support is available for the students who most need it".

"We are delighted the government is keen to act on this important issue, says Diana Warwick of Universities UK

The union's president, Owain James said: "NUS welcomes a review of student finance and is delighted the government has recognised the current system is not working.

"We are looking for new money to be invested in the sector and calling for targeted support for students from poorer backgrounds and the abolition of tuition fees.

"We will be keeping a close eye on the work of the government team, looking carefully at the details and implications of any new initiatives they might announce."

The body which represents the heads of universities - Universities UK - had also been calling for a review of student support arrangements.

Diana Warwick, the chief executive of Universities UK said: "We are delighted the government is keen to act on this important issue.

"We are worried about growing levels of hardship and debt amongst students and that the fear of debt might be putting off some people from thinking of university at all."

Hardship

Professor Claire Callendar, the professor of social policy at South Bank University has carried out studies on student incomes and hardship for the government.

She says she's delighted that ministers are considering going back to student grants and supports the idea of a graduate tax.

"It's likely to be a much fairer system than the current one, so that those who benefit the most will pay the most.

"At the moment, students from the poorest families end up with the largest debt and the new system should change that.

"It should be much fairer, so that those people who earn the most after graduating can pay the highest contributions towards education."