Next year, both tuition fees and maintenance loans will be linked to a measure of inflation called RPIX, which counts the cost of everything except mortgage interest costs.

It is currently set at 3.1%.

This will increase the maintenance loan cap from £10,227 to £10,544 for students living outside London and from £13,348 to £13,762 in London.

Maintenance grants, which were non-refundable, were abandoned in 2016.

In their analysis of the changes, the Institute for Fiscal Studies (IFS) said the increase in tuition fees would spare universities a further real-terms reduction in their teaching resources.

But they called on the government to say whether fees would continue to rise after next year, “to give some certainty to universities and prospective students alike”.

They also said that under current repayment terms, about a quarter of the loans will eventually be written off and paid for by the taxpayer.

Although students taking out the largest possible loans for maintenance would receive more money next year, the IFS said they would still borrow 9% less in real terms than they would in 2020/21.

The changes announced on Monday will affect students starting next year as well as current students – although universities may have contracts to protect their students from mid-term fee increases.

Students Shay and Zay, both in their first year studying product design at Manchester Metropolitan University, said the higher fees could put off potential students.

Zay said tuition fees were “already a pretty big factor playing in a lot of people’s minds” when deciding whether to go to university.

Shay said university was “already expensive as it is”, but added he was more worried about whether his maintenance money could cover the cost of living.

Personal finance expert Martin Lewis said the tuition fee changes were “likely to be trivial”, especially compared to students starting university in 2023.

Last year, loan terms were increased from 30 to 40 years and repayment threshold salaries fell from £27,295 to £25,000, meaning more graduates will be repaying their loans for longer.

Tom Allingham, of money advice website Save Students, said that despite their “dismay” at the fee rise, it would make “little difference to the overall level of student debt and will have no impact on the amount a graduate repays. every month”.

This sentiment was echoed by sixth formers in Oldham as they considered their university choices for next year.

Niamh, who wants to study English literature, said tuition fees had not risen by “a huge amount” but that the increases in maintenance loans were “definitely necessary” to support students.

She said the costs for students were “ridiculous” so “even a bit of extra support is welcome”.

James, who wants to study engineering, said he thought it was “unfair” that he would have to work to fund his living costs at university, even with increased maintenance loans.

Sarah Coles, head of personal finance at Hargreaves Lansdown, a financial services firm, said parents of young children should start saving now for their university years.

She advised parents of older children to “be clear about what level of financial support they can expect from you.”

Vivienne Stern, chief executive of Universities UK, which represents 141 universities, said the government’s decision to change tuition fees was “the right thing to do”.

She said the freeze was “completely unsustainable for both students and universities”.

But Jo Grady, general secretary of the University and College Union, said the tuition fee hike was “economically and morally wrong” and the government was “taking more money from indebted students” to support universities.

The changes come after growing concerns about the state of UK university finances.