Lowering tuition fees by shifting the delivery of some higher education courses into further education colleges and renaming student loans as a “graduate contribution” are likely to be on the agenda for the UK government and its ongoing review of post-18 education and funding in England, sector figures believe.

There are suggestions that Theresa May, the prime minister, has pressed the review, led by former banker Philip Augar, to offer its initial report in August. However, it is thought that that proposal received a cool reception and that a report in the autumn is more likely.

On funding, the recent announcement of increased government spending on the NHS – and a , to the Cabinet that there is “no more money” for other policies – could be crucial for the outcome of the review.

Ministers have previously voiced support for the return of student maintenance grants and cutting tuition fees by increasing direct public funding for high-cost subjects. Such policies would require additional direct public spending, and whether these aims endure in the face of Mr Hammond’s warnings remains to be seen.

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One vice-chancellor said that the idea of “pushing HE into FE”, where courses could be provided with lower tuition fees than in universities, appears to be a priority within government. This could be seen as a way of bringing down headline fees without increasing the deficit.

The teaching excellence framework is seen as a potential driver for this reallocation of resources because it shows that some colleges provide “gold” courses at lower costs than universities.

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The government is also said to see a shift of resources from higher education as a means of boosting colleges – which have suffered from deep cuts in the past decade – with a fresh source of funding.

Nick Hillman, director of the ����Vlog Policy Institute, said he believed that “reducing fees by getting more people doing HE in FE is likely to be under real discussion both in the Department [for Education] and by those doing the independent review”.

But he argued that, rather than switching degree-level courses into further education institutions and cutting the numbers of students at universities, the right course of action to “rejuvenate” further education was to increase the number of school-leavers going on to gain technical higher education qualifications in colleges.

A spokesman for the Association of Colleges, which represents further education institutions, said that the “traditional higher education route has many great attributes, but it is right to look beyond simply increasing the numbers following that path”.

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“Provision of HE in FE is increasing rapidly because of much more than the cost of fees – colleges are able to offer the flexibility, tailored support and links with employers that so many learners need as they look to progress,” he added.

One potential outcome from the review that apparently has ministerial support is a reframing of the terminology of the system: away from the language of “loans” and “repayments” that some fear deters students, towards phrases such as “graduate contribution”.

Support for the idea is long-standing, including among former ministers. Jo Johnson, who was then the universities minister, told a fringe event at the Conservative Party conference last year: “I think we do need to work on the language and cease to use the terminology of debt and loans. It has to be understood as a time-limited, income-linked, graduate contribution.”

Mr Hillman said that given the long-standing backing among former ministers, it would be “very odd if renaming wasn’t on the panel’s agenda”.

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However, the government would have to guard against any perception that by changing terminology, it would be making a cosmetic alteration without achieving fundamental change.

john.morgan@timeshighereducation.com