It will also examine the impact of higher education on the public finances, a so-called ‘graduate tax’, and the effectiveness of the government’s management of the student loan book.

The first evidence session of this inquiry will be on Wednesday 18 October with Dr Helen Carasso, lecturer in higher education, department of education, University of Oxford and Dr Andrew McGettigan,  lecturer, City Lit and Central St Martins, who have written extensively about student loans.

It will focus on the impact of student loans on the public finances, the success or failure of fee funding to act as a ‘market’ for higher education, and the impact of student finances on students. Further evidence sessions will be announced in due course.

Nicky Morgan, chair of the Treasury committee, said: ‘Student loan debt is projected to be around £160bn within six years, and the government has announced that it will review the whole student finance system. The committee will scrutinise the current system and any future developments closely.’

Report by Pat Sweet