The Commons exchanges have now ended. Thanks for joining us and here's a quick recap of the main points: Universities to charge tuition fees up to £9,000 a year from 2012 - up from the current £3,290. Those charging over £6,000 a year will have to pay towards a £150m scholarship scheme for poor pupils. Graduates to start repaying loans when they earn £21,000 - up from current £15,000 threshold. They will be expected to pay 9% of their earnings above £21,000. Interest rate for those on less than £21,000 would remain at zero, those earning £21,000 - £41,000 would pay a rate reaching a maximum of inflation plus 3%. Those on more than £41,000 would still incur interest "well below normal commercial rates". Outstanding loans will be written off after 30 years. Students who want to pay off their loans early will be hit with a financial penalty.
BBC education reporter Heather Sharp: Asked to predict what proportion of young people will be going to university in 10 years' time, Mr Willetts said he expected the "absolute number" studying to remain "broadly flat", suggesting the proportion of young people studying could actually go down - this may be the end of the drive for ever-increasing university attendance.
The BBC's Iain Watson says: It's not surprising that PM's questions was dominated by tuition fees and educational funding given the debate which followed. What's become clear from both parliamentary occasions today is that the government won't simply defend the proposals by pointing to extra help for the least well off but will attack Labour for a lack of an alternative. The opposition went for an attack on cuts to university funding because they can't yet agree on a graduate tax - but they know they will have to spell out soon what they will propose, as well as oppose. A number of Lib Dems used the debate to make it clear they wouldn't support the proposals as they had made a pledge to vote against any increase in fees at the last election - and this despite pleas from their frontbenchers to delay any attack until they had looked at the overall package. Expect a repeat performance when these proposals go to a vote in both houses of Parliament next month.
Jonathan says: Re-Daninacan's tweet (Graduates earning over 21k will have to pay 9% of their income back as tuition fees. That sounds fun, as if UK tax isn't high enough". ) That is incorrect. They will pay 9% of their salary *above £21,000*. So someone earning £21,500 will pay £45 per year, or 0.2%.
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BBC education reporter Heather Sharp says: Students deferring entry from 2011 to 2012 will be under the new regime, Mr Willetts confirms. There are already fears of a huge scramble for places as students try to get into university before the new fees regime. Those already studying will be unaffected.
Rebecca writes: John Holmwood has hit the nail on the head: As an academic at an English HE institution, I can say that my colleagues and I are in a complete state of panic. Even at £6k+ we will be losing substantial amounts of funding on each student due to the virtually complete withdrawal of government funding for teaching in Higher Education. Simultaneously, student expectations will increase dramatically since they will be paying so much more. How on earth can we deliver? I already work a 75-hour week...
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P. Barrett from Rochdale writes: All those who have had the privilege of a university education and are still in employment should also be required to pay for their education including those proposing the changes and those in Parliament debating the issue
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Mr Willetts says it is not like credit card debts - graduates will not have to pay anything until they earn a certain amount. But Labour MP Chris Williamson says he should stop calling the policies progressive because they are "no such thing". Tory Mary MacLeod then goes on to welcome the "progressive" announcements made today.
Damian Hinds accepts that most MPs will have gone to university on a much more generous scheme - but says measures to tie "contribution to cost" are now necessary. Mr Willetts accepts MPs will have done better - but says the system was more generous because fewer people went to university. More people go now and that is something to be welcomed he says.
David Willetts stresses to MPs that students will not have to pay fees up front. Labour's Liz Kendall asks for a guarantee that those on middle incomes will end up paying less than those on higher salaries over their lifetimes - Mr Willetts says they will.
The BBC's Iain Watson says: Lib Dem backbencher Greg Mulholland makes it clear he will vote against any increase in fees.
University and College Union says graduates who earn the national average salary will be hit with tax bills almost 20% higher than non-graduates if the government's plans are implemented.
They go on to discuss Mr Cameron's appointment of his photographer as a civil servant. Jim Murphy says it is "ludicrous". Mr Hunt suggests Labour are not discussing the serious issues.
Mr Willetts says over half a million students will be eligible for more non-repayable grants. Around a quarter of graduates will contribute less than they do now, while half will have some of the balance written off.
Labour's Jim Murphy and the Conservative Jeremy Hunt are on the BBC's World at One. Mr Murphy is worried about the size of the hike, up to £9,000, and suggests it could be a "tipping point" for people deciding to go to university. Mr Hunt says there had been a consensus between Labour and the Conservatives on the issue before the election - he asks what Labour's solution would be.
The BBC's Iain Watson says: The Lib Dem MP for Cambridge - a seat Labour held until 2005 - makes it clear he can't support an increase in the cap on fees, despite welcoming some parts of the funding package. A number of Lib Dem MPs have indicated privately that they will vote against the measures and not simply abstain though currently not in sufficient numbers to inflict a defeat on the government
In the Commons Lib Dem Julian Huppert is concerned the prospect of being further in debt will put people off going to university altogether. Mr Willetts says the thresholds introduced mean many students would be paying less under the new system.
Lib Dem Andrew George tells the BBC's World at One he is pleased the package of measures improves help for those doing vocational courses, and that repayments will be done on a "progressive basis". His Lib Dem colleague Tim Farron says there has been "real progress" on the plans - although he has said he will vote against them anyway. "The problem for me is the simple issue of the pledge... For me that is a red line," he says.
Lyn from Cardiff writes: I am relieved that my son will graduate before the new fees come in, but I am appalled at a levy being applied for early repayment. I am a widow and would not consider myself wealthy. But I left uni with no debt and I was committed to neither my children leaving uni with huge student loans. The thought that I would be penalised for being thrifty is totally unfair and just another sign of the twisted nature of the coalition government. Nick Clegg deserves 30 pieces of silver for his actions.
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Mark from Chelmsford writes: My daughter ended up with 9 As in her GCSEs. We were thinking about how we would help fund her university fees. We, including her, have decided not to go. To be saddled with so much debt while trying to establish a life, a home, is just not worth it. We are now looking at what the alternatives are. As a parent I feel I've failed my daughter in not being able to provided the support she needs to maximise her learning potential.
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Conservative Mark Field said he would have preferred the cap being abolished entirely. He says one or two of the biggest universities may feel, even with a £9,000 cap, they need to "go private".
On BBC Radio 4's The World at One, the tuition fees issue is being discussed. Lib Dem MP Stephen Williams, who spoke for his party on higher education before the election, tells the programme that his party wanted to move away from Labour's fees system to a fairer system - and the new system will be fairer.
David Lammy says cuts to arts and humanities courses was a huge "constitutional decision" - he again asks whether there will be a vote. Mr Willetts says there will be a vote on changes necessary in current regulations on fees.
Mr Willetts raises the possibility that universities may decide to charge different amounts for different courses.
The chamber is a lot quieter now than it was during PMQs but there are still a lot of MPs in for the statement. Labour's Andrew Miller says some vice chancellors feel their institutes are "at risk" because of the proposals - and asks what assessments have been made of the impact on different universities.
The BBC's Iain Watson says: Under questioning from the SNP, David Willetts makes it clear that he respects devolution and these new proposals don't apply to Scotland (most students usually resident in Scotland and studying in Scotland don't pay fees) but points out that there are debates going on within Scotland on how to reform higher education funding.
Labour's Andrew Smith - one of the Oxford MPs - says it is an issue about "trust in politics" - and asks for confirmation the changes will be subject to a vote in the Commons. He has a go at the Lib Dems - saying they must be "held to account" for breaking their promises. Mr Willetts says "of course there will be an opportunity for this House to vote on it".
SNP MP Pete Wishart gets up to echo Charles Kennedy's point in slightly strong language - saying ministers should not "bully" Scottish ministers into doing the same thing.
Former Lib Dem leader Charles Kennedy says the government will understand he cannot support the plans, noting how opposition to the fees were a key part of the election campaigns he led in 2001 and 2005. He goes on to say there will be a knock-on financial impact on Scottish universities and urges ministers to keep communication open "to make sure we do not skew the playing field intellectually within the United Kingdom".
daninacan tweets: Graduates earning over 21k will have to pay 9% of their income back as tuition fees. That sounds fun, as if UK tax isn't high enough.
Read daninacan's tweets
A quick recap of what's been announced: Students could pay up to £9,000 per year for a university education from 2012, almost three times the current limit. The change will come into effect in two years' time, but universities will have to do more to attract students from poorer backgrounds.Graduates will not have to repay loans until they earn a salary of £21,000.
John Holmwood from London writes: The Secretary of State neglects to say that for students in arts, humanities and social sciences, their contribution will go up from £3290 per annum, while the income to universities will be reduced to £6000 from the current £7237. In other words they pay nearly double and the universities will be funded to provide less.
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Lee Johnstone from NW Leeds writes: Of all the questions to bring up at PMQs, mine asks about pub week! There is a chance that Leeds' trolley bus that runs right through his patch could be scrapped, we have to put in a new funding bid and Gregg Mulholland asks about pubs..
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Vincent Hammersley from Coventry writes: I am ashamed. My generation enjoyed free higher education with grants to help us. It was my generation that has caused the economic debacle which we are now expecting our children to pay for. I for one apologise to the younger generation.
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Now a Labour backbencher, ex-minister Jack Straw asks what is happening to the government's contribution to universities. He suggests that "pound for pound" the increase in fees will offset a contribution from the exchequer. Mr Willetts says they will set out the teaching grant at a later date - but it is the case that in future the money will go through students, through the choices they make, not the government.
Lib Dem Stephen Williams asks for confirmation of access arrangements for poorer students - asking that they be "rightly demanding" of universities, but easy for learners.
Mr Willetts says Mr Thomas announced that he was against government policy without announcing what Labour's policy was. He has a dig at Labour leader Ed Miliband for backing a graduate tax - something Shadow Chancellor Alan Johnson opposes. Mr Willetts says it shows the opposition party cannot be taken seriously. The same line of attack my colleague Iain Watson highlighted during PM's questions.
BBC Education reporter Heather Sharp says: The interest rate Mr Willetts is proposing is higher than that proposed by Lord Browne - 3% plus inflation, not 2.2%. With Browne's proposed levy on fees over £7,000 gone, this will raise some extra money - something universities will be watching for, a major worry for them is whether the system will fill the gap left by cuts to their teaching budgets.
Mr Thomas says Labour will not support the plans - Mr Willetts accuses him of a classic Old Labour attack. He says they have put forward plans without saying how they would pay for it
The BBC's Iain Watson says: Labour are also portraying themselves as the party of middle income earners who they say will be most squeezed by these changes. They are singling out the Lib Dems for changing their minds on fees.
"This is the day we found out how much Lib Dem ministerial cars cost," says Mr Thomas - directed at a stony-faced Nick Clegg.
Labour's Mr Thomas says many students will have to choose the "cheapest course", not the one that is best for them. He says the system will seem unfair to those on middle incomes - although he welcomes moves to help poorer students. He asks how many more students will never pay off their debts and suggests the wealthy will pay the least - because they will pay off the fees upfront.
The BBC's Iain Watson says: Labour are focusing on overall cuts to education funding as there is not yet agreement on Ed Miliband's alternative to higher fees - ie a graduate tax, something which the shadow chancellor isn't so keen on.
BBC education correspondent Sean Coughlan says: David Willetts says there will be a "tougher regime" to protect access for poorer students once fees rise above £6,000. Universities, unenthusiastic about quotas and targets, will be looking very closely at whether such proposals will have teeth.
Labour's Gareth Thomas says fears would be "high" over the proposals and says that what motivated proposals was spending cuts for universities.
Paul Twitchett from Bolton writes: How deliberate is that? David Willetts flanked by Clegg and Cable. Neither of them look happy about the situation
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The BBC's Iain Watson says: There is confirmation there will be a vote in both Houses of Parliament before Christmas which would give those Lib Dems who are uneasy about fees an opportunity to abstain - which is allowed for in the coalition agreement - or to vote against, which some are likely to do so they can distance themselves from the decision at the next election.
Mr Willetts says Lord Browne's report has generated "much debate" and hopes Labour will maintain a spirit of co-operation on the issue - a few outbursts from the Labour benches suggest otherwise. Labour's Gareth Thomas confirms this as he stands up to say it is a "tragedy for a whole generation of young people".
"Overall this is a good deal for universities and for students," says Mr Willetts - who says they offer a "thriving future" for universities and "real choice" for learners. The changes will come in for the 2012-3 academic year and legislation will be debated before Christmas, he says.
The BBC's Iain Watson says: Re-that big increase in maintenance grants for the least well off backgrounds and other "progressive" measures - the government hope they will limit any Lib Dem rebellion and reassure those who don't want any increase in fees.
Mr Willetts said the student support system would be made "more progressive" - including more help with living costs for poorer students. He gets some "hear hears" for the announcement and goes on to talk about support for part-time students, who will get a loan for tuition on the same basis as full timers.
The BBC's Iain Watson says: This is the first time we are getting details of exactly what the government would do to help students from the least well off backgrounds.
The BBC's Iain Watson says: David Willetts confirms that early repayment of loans will face an additional cost - as much as a five per cent levy. Some Lib Dems are concerned that this may not apply to those from wealthy backgrounds who pay upfront.
The universities minister goes on to talk about penalties for repaying the fees early - he says the government is focused on improving the "life chances" of those from the poorest backgrounds. There will be a £150m national scholarships programme for bright, poor students. Those universities who want to charge more than £6,000 a year will have to take part, he says.
Mr Willetts says interest payments will be tagged to earnings - so those on higher salaries will pay more in interest. He says overall those students on the lowest incomes will pay less than they do currently.
The BBC's Iain Watson says: David Willetts - the Conservative universities minister and not Vince Cable (his boss as business secretary and a Lib Dem who pledged not to raise fees at the election) is making the statement on raising fees. The government says that as he can attend cabinet there is nothing odd about this.
Mr Willetts says students will not have to pay upfront fees. He says a cap on fees is desirable - and should be £6,000 a year. He says the much-quoted £9,000 cap would be allowed in "exceptional circumstances". He confirms that the threshold for earnings after which graduates will repay the loan will be raised from £15,000 to £21,000. He says this will reduce monthly repayments and is "progressive".
Mr Willetts is flanked by Nick Clegg and Vince Cable as he makes his statement. The two senior Lib Dems are in a difficult position over the issue - their party had backed scrapping fees altogether
And the session ends. The Speaker says two members of the Commons' backbench committee have resigned because they've been appointed to frontbench roles by Labour. Two more Labour MPs can now stand for the roles. David Willetts gets to his feet for his university funding statement.
Labour's Jim McGovern asks about tax breaks for the computer games industry - Mr Cameron says the government is looking at simplifying the corporation tax regime to bring it down to 24%. He says it will make Britain one of the best places in the world to do business.
Lib Dem Sir Alan Beith asks a question about schools in his constituency - suggesting they were left out of Labour's Building Schools for the Future scheme. Mr Cameron uses the opportunity to plug the government's own scheme.
A question from the Conservative Gareth Johnson who opposes giving prisoners the right to vote. Mr Cameron says he agrees and it makes him "physically ill" to even contemplate it - but says it could cost the UK £160m if they don't come forward with proposals to do so. He says the problem was "just left to us" by the previous government. It follows a ruling by the European Court of Human Rights.
Labour's Ronnie Campbell asks about job losses resulting from the VAT rise and spending cuts. He suggests the PM is "picking on" hard working families and gets rather annoyed as he shouts he should "take it out on the banks" - Mr Cameron says, unlike Labour, his government has introduced a permanent bank levy
Labour's Emma Reynolds returns to the "broken promises" theme - this time on the NHS. Mr Cameron insists NHS spending will increase "in real terms" over the next four years - a pledge he says Labour has not matched. A friendlier question from Lib Dem Greg Mulholland about British pub week - the Speaker calls him to order as he starts to ask a chain of related questions.
Mr Cameron says he "does not think we will have a problem" over the immigration cap - following questions raised in a home affairs select committee report. Labour's Lindsay Roy says Mr Cameron likes to blame Gordon Brown for a lot - to shouts from MPs - and asks what mistakes he has made. The PM declines the opportunity but says people have to "accept their responsibilities".
Labour's Chris Ruane asks how much money will be saved if the government cuts the number of MPs but increases the number of Lords. Mr Cameron says the MP's constituency has just 55,000 voters - amid roars from Labour the PM says his own constituency has much more than that.
The BBC's Iain Watson says: Clearly under their new leader, Labour whips are getting their act together but at the expense of distinctive questions by backbenchers - so far two backbenchers have raised the government's 'broken promise' on educational maintenance allowances and Ed Miliband's criticism of an official government photographer was echoed by a backbencher too.
Tory Sam Gyimah asks a question about new legislation on savings schemes for small businesses - he's worried about the extra bureaucracy. Mr Cameron says it will be "road-tested" with bigger companies first.
Another Labour question on the educational maintenance grant from an MP annoyed that the government is scrapping it. Mr Cameron fires back that they have to because of the huge budget deficit. Their replacement will be "more targeted and more effective", he says
Labour's David Hamilton asks about a trolleybus in his constituency. Then Tory Philip Hollobone asks about asylum claims - asking for assurances people will not just be "waved through" as the government deals with a "backlog" of asylum claims. Mr Cameron says there "will be no amnesty". He says Labour's points system for immigration wasn't working properly.
There's a bit of rowdiness as Hazel Blears asks a question about her constituency - Mr Cameron says that is being unfair, she's asking an important question about the gas explosion in Salford
Housing benefit is raised - with a suggestion that shadow minister John Healey backed a cap on the welfare. Mr Cameron quotes Labour's own manifesto back to Mr Miliband saying they had similar plans for the reform - MPs get louder as the session heats up.
The BBC's Iain Watson says: The Labour leader has been building up his narrative of broken promises by the government across the board, but David Cameron's counter attack will be used time and again by the coalition - that Labour are clear about what they oppose but opaque when it comes to what their plans are.
Julie Hilling, a Labour MP, also raises the issue of Mr Cameron's "personal vanity photographer" - Mr Cameron says the last government spent half a billion pounds on publicity.
Mr Cameron accuses Mr Miliband of "lame" soundbites and says he must engage with the real issues.
"What on earth is he reduced to," asks Mr Cameron after the photographer question. The Labour leader says the PM can't even defend his own decision - and accuses the government of a string of "broken promises". There are cheers from Labour as Mr Miliband says the PM is "destroying trust in politics".
The BBC's Iain Watson says: Ed Miliband enjoyed exploting coalition differences over tuition fees but sidesteps Labour's alternative. He favours a graduate tax but it is not yet Labour policy. There's a possible danger his folow up on the PM's personal photographer - while amusing - looks relatively trivial compared to higher education funding.
Mr Miliband asks about Mr Cameron putting his own personal photographer on the civil service payroll. He has a dig about "airbrushing" and manages to aim a jibe at Nick Clegg about his positioning within the cabinet photo: "Just a little bit to the right, Nick." Mr Cameron suggests this is not a serious line of questioning, saying they are cutting Labour's communications budget and will be "spending a bit less on replacing mobile phones in Downing Street".
Mr Miliband points at the Lib Dems as he says people will be angry about "promises broken" - Labour MPs enjoy that one. Mr Cameron mocks the "miliband-wagon". He says Labour set up the Browne review - which recommended allowing higher university fees. Mr Miliband should stop "playing political games" and "join the consensus".
The BBC's Iain Watson says: Ed Miliband is attempting to exploit differences in the coalition - looking forward to the higher education statement which follows - as the Lib Dems had pledged not to increase fees but they will now go up.
The Commons is quiet as Mr Miliband thanks him for his answer. He then raises the issue of "trust" in politics - and has a dig at the Lib Dems about tuition fees. Mr Cameron says all members of the government have taken "difficult and courageous" decisions - everyone wants well-funded universities and for the poorest people to go to them, he says. He suggests "opportunism has overtaken principle" - to cheers from the Tory benches
Mr Miliband adopts a calm tone as he asks about talks on Yemen and an IMF plan to deliver economic support to the country. Mr Cameron says there is a worrying strain on al-Qaeda terrorism coming out of Yemen. He says meetings are ongoing to encourage Yemen's government to deal with issues affecting the wider region.
The BBC's Iain Watson says: Ed Miliband is showing a united front over terrorism and burnishing his non-partisan credentials. The PM briefed him privately over the weekend but he will now attempt to set out some distinctive political territory - not just agree common ground.
Lucy Clarke writes: Higher fees will of course deter many. How many want to start work with a huge debt at a time when they are starting to take on their own house and family commitments
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Sarah Marten from London writes: I have a 13 year old and a 15 year old who both want to go to university. I had saved up £9k each which we thought would pay their fees for three years. Now it only looks like it will pay one year. The whole situation is very worrying, and no-one is talking about the effect this will have on teenager's aspirations
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Tory MP Elizabeth Truss makes a plea for the RAF base in her constituency. Labour's leader Ed Miliband is next up. He echoes Mr Cameron's earlier tribute. He asks for an update on air freight security following the bomb plot last week.
Mr Robertson accuses the government of breaking promises - Mr Cameron says it is introducing changes that will help colleges identify those who need the help to stay in education.
And we're off. The PM begins by paying tribute to a soldier killed in service. Labour's John Roberston has the first question - on educational maintenance allowances.
David Cameron and Nick Clegg are now in their seats. Labour's Wayne David asks Cheryl Gillan what exactly her department does "given that it doesn's stand up for Wales". Ms Gillan, unsurprisingly, doesn't agree.
What's going to crop up in the Commons? In the Daily Politics studio Daniel Finkelstein from the Times says university funding might prove a tricky issue for Ed Miliband, who has backed a graduate tax in the past - he might concentrate on the terrorist threat.
Welsh Secretary Cheryl Gillan is still answering Wales questions over in the Commons but the benches are filling up.
Mr Carswell, who is not a minister, says the Lib Dems' desire not to have any fees at all is "absurd". His fellow Tory Greg Hands, who is on the front bench, is defending a government move to penalise people who can pay the £9,000 up front amid suggestions it is meant to placate the government's Lib Dem partners. He says it is about the lost interest payments.
In the Daily Politics studio Conservative MP Douglas Carswell is talking about tuition fees. He says plans to ensure that universities charging the top fees of £9,000 attract more poorer students would be something top universities would want anyway. He says the announcement is "great news".
Hello and welcome to our live coverage of prime minister's questions - and following that, David Willett's statement on university funding. The latter issue is likely to prove problematic for the coalition - particularly the Lib Dems, many of whose MPs had pledged not to back any rise in tuition fees before the election. What other issues might crop up? The cargo bomb plot seems likely to get a mention and yesterday's new defence treaties with France may well crop up.