The Prime Minister's surprise announcement that a better way had to be found to support students through university appears to have played well.

But there is a danger of unrealistic expectations of a return to the generous student grants of the past.

Instead of being accused of a U-turn on student grants, the government has been praised by most commentators for being big enough to acknowledge that it got it wrong when abolishing the last vestiges of the grants system.

Praise has also come for acknowledging that the current system is deterring many young people, particularly from poorer backgrounds, from applying to university.

The review, led by Education Secretary Estelle Morris, is well under way and ministers hope to report by early January, possibly earlier.

Students have staged many protests over tuition fees and the loans system

While ministers admit to surprise and relief at the good reception they have received so far, senior ministers are worried that public expectations of the review may have become unrealistically high.

In particular, they are concerned that many potential students and their parents have started to believe that, because the review is said to be wide-ranging, it might also lead to the abolition of tuition fees.

So ministers are trying to make it clear that tuition fees are unlikely to go as the government are sticking to the principle that students who can afford to do so should contribute towards the costs of their degree.

They point to the fact that means-testing, which exempts 50% of students from fees altogether, guarantees that only the better-off pay.

Raised expectations

There is also concern in ministerial circles that newspaper headlines, which greeted the announcement as 'the return of student grants', have led some to expect a return to the pre-1998 system when most students received some level of grant towards their living costs and were not required to pay anything back.

The schemes under consideration would reintroduce a payment to some students while they are at university but would be coupled with some form of graduate tax.

In short, you will get money up front but will have to pay something back later.

It might be fairer to call this a loan rather than a grant but it is not strictly a loan as the graduate will not be paying back what he or she received.

The numbers of students from poorer backgrounds at university are still low

They may pay more or they may pay less depending on their post-graduation income.

In this respect the new system resembles the arrangements which replaced tuition fees in Scotland.

Despite popular belief, Scottish students do have to pay something back.

In Scotland this is described as graduates 'making a contribution' to the general costs of higher education.

So will students be better off under the new system when it comes in, possibly as soon as September 2003?

Number-crunching

Much will depend on the exact detail of the scheme.

As I write civil servants are crunching the numbers which will determine what income threshold the graduate tax should begin at and the percentage of salary that will be payable.

The effect on student and graduate pockets will also depend on whether the government decide to give the 'grant' to all students or just to the less well-off.

It remains a possibility that, under a means-tested system, some students will receive no grant but will still have to pay the graduate tax.

It is likely the net effect will be to make university slightly more expensive for the middle-classes and slightly cheaper (and crucially with front-end assistance) for those from poorer homes.

If the government can design a scheme to deliver this outcome it will be satisfied that the review was worthwhile.

Middle-classes

For the chief concern of ministers is that while 70% of young people from middle-class homes are going to university, only a small minority enter higher education from lower socio-economic groups.

Ministers need that to change if they are to meet Tony Blair's target of 50% of young people experiencing higher education.

So, in short, if you are considering delaying your university application in the hope that you, or your children, will benefit from a generous system of full grants and cost-free tuition after 2003, then you had better think again.

Some, possibly all, students should be better off while they are actually at university.

But over the longer term, taking into account the graduate 'contributions', many will find they pay a lot more for university in future than they did in the past.

The review is not about making a university education free again or even making it cheaper.

The aim is to avoid student life being equated with frightening levels of debt.

Under the new system you may well end up paying more but, in theory, you won't be paying until you can afford to.