SNP rejects calls for 'unnecessary' review of student funding

She told the Scottish Parliament yesterday that such a move was not necessary as her government was already acting to improve funding for the sector.

Her stance came in response to the views of Sir Andrew Cubie, the author of the report 10 years ago which led to Scotland scrapping tuition fees, who is now calling for a rethink on student contributions.

Ms Hyslop made the statement while announcing up to 75,000 students, about two-thirds of those in Scotland, would be better off through increased grants and loans funded through the provision of an extra 30 million for student support.

She said: "In these toughest of economic times, I believe we have a duty to protect and promote the income and interests of this generation of students."

Grants up to 1,000 are to be introduced for independent students – those unsupported by parents and mostly over 25. And she said the maximum level of the income-assessed student loan, which has a current interest rate of 0 per cent, will go up by 442. She added: "The overwhelming majority of independent students are over 25 and many of them have dependent children.

"Our evidence on student income and expenditure tells us that the budgets of these students are under the most pressure and they also have the highest levels of commercial debt."

Ms Hyslop said the measures would raise the income of independent students by up to 1,227 and dependent students, generally younger with parental financial support, by up to 622.

Liam Burns, National Union of Students Scotland president, said: "For years, we've been calling for student hardship to be prioritised over graduate debt, getting money into students' pockets when they need it most. But we still have a long way to go. Even with this money, students will still be living below the poverty line, and we know levels of credit card borrowing and other commercial debt have increased to unprecedented levels."

However, Mr Burns also called for further reform of student funding.

Claire Baker, Labour's higher education spokeswoman, said: "The campaign against student hardship must not stop here.

"It is clear that the current system of student support needs to be reviewed. We need to see what ways we can get more money directly into students' pockets and Labour supports Sir Andrew Cubie in that goal."

However, Ms Hyslop said there was no need for such a step as it would take a length of time to implement. She added: "We are acting now."