The four models of Scottish higher education funding and how they work

The four models of funding and how they work

Flat-rate fees

Initially introduced in 1998, with every student in the UK paying 1,000 per year for their course.

Following Dr Andrew Cubie's 2000 review of higher education funding, these were removed in Scotland but remained in England.

Advantages: An equitable system which treats every student the same and would be simple to calculate.

Disadvantages: Has been repealed in Scotland and the SNP is opposed to the fees in principle.

Graduate endowment

Previously ditched by the SNP government, this system brought in revenue by charging students a flat fee of about 2,000 payable on graduation.

Advantages: Easy to run as every graduate pays the same.

Disadvantages: Fewer than half of graduates were eligible to pay and the vast majority of the rest added it to their student loans, meaning it brought in little revenue for the cost of running the system.

Variable fees

Introduced in England in 2005, in addition to the 1,000 annual fee, to top up the amount a university can charge to a maximum of about 3,000.

Advantages: Would introduce market forces to tuition fees.

Disadvantages: Universities south of the Border have nearly all charged the maximum. It brings in about 6% of funding in England. The fear is market forces would see the most prestigious universities levy large fees, making them inaccessible to the less well-off.

Graduate tax

Under this, every graduate would pay a higher rate of income tax, regardless of when they studied.

If applied retrospectively to all graduates, the rate could be as low as 0.5p, which could generate 150 million a year.

Advantages: Seen as the cheapest, most effective way to raise the necessary funds.

Disadvantages: It may be unpopular with voters and a "sunset clause" would be necessary to prevent graduates paying for the rest of their lives, way above the up-front costs of the degree.