University students could receive a maintenance allowance similar to the payments offered to keep teenagers in school.

The government is currently reviewing student funding - and reports claim that this will extend the "educational maintenance allowance" to students.

Such a weekly grant, perhaps worth about �1,500 a year, has been welcomed as a "huge step in the right direction" by the National Union of Students.

But the Department for Education says that reports of allowances are only "speculation" - and that the review on student funding will not be published until the autumn.

Educational maintenance allowances, funded by last month's spending review, provide a grant of up to �30 a week to encourage 16 to 19 year olds to stay in education.

These are means tested and the full payment is available to families with a joint income of less than �13,000 per year.

It is now suggested that such non-repayable grants could be offered to students, as financial support for young people from less well off families.

This principle of grants, rather than loans, has received the support of the National Union of Students.

The union expressed its "delight" at the prospect of the government "bringing back a form of grant for the poorest students".

But if such a scheme were to be implemented, it would be part of a wider shake-up of the system of tuition fees, allowances and student loans.

Student debt

The student funding review will be trying to achieve the balance between ensuring that fears of debt do not deter students - and giving universities an increased income from students.

This could see a wider range of means-tested grants and allowances for students.

But a recent report from the education select committee also suggests that students could be facing higher charges - in the form of increased interest rates on loans and higher tuition fees for prestigious courses.

Universities have argued that students need to pay something closer to a market rate if they are to have enough income to compete with other international institutions.

But student unions would strongly resist allowing universities to increase tuition fees - with so-called "top-up fees" - a policy which had been opposed by the previous education secretary, David Blunkett.

Students will also argue that any revision of funding must not add to a burden of debt which has already seen many young people graduating with debts in excess of �10,000.

"The government needs to make positive long-term changes - tuition fees must go and with them any threat of top-up fees and commercial interest rate loans," says the National Union of Students.

Whatever is decided, the full package of changes will not be introduced immediately - and it could be pushed beyond the next election.