Student debt `expected to rise to £70bn` by 2015-16

The amount of outstanding student loan debt is expected to rise to £70bn - up from the current £24bn - by 2015-16, according to a report by the Public Accounts Committee (PAC).

Government plans to raise tuition fees at English universities to a maximum of £9,000 - almost three times the current cost - could lead to a `spending black hole` as ministers are pressured to close the funding gap, according to an article in the Guardian.

Margaret Hodge, chair of the PAC, said: "If the universities` plans to widen participation are approved by the Office for Fair Access, this will leave a substantial funding gap which will either require further cuts in higher education or further resources from the Treasury."

Ministers now face a steep annual bill that is "several hundred million pounds higher" than expected to fund student loans, according to the PAC.

With students facing the prospect of rising fees and higher debts, there are also fears that university applications could fall - signalling financial uncertainty for some less popular universities.