Peers have approved the government's plans to raise the cap on tuition fees for universities in England to as much as £9,000.
On 14 December 2010, the Lords voted by 283 to 215, a government majority of 68, to reject a Labour bid to throw out the move.
Former BP chief executive Lord Browne of Madingley, who wrote the report on which the proposals for higher fees are based, said the plan to raise the fees cap was the first part of a "strategic" reform of higher education.
"I believe that these reforms are essential for this nation to maintain its hard-won pre-eminence in higher education and I therefore strongly support this step," Lord Browne added.
But Baroness Sharp of Guildford, who speaks for the Liberal Democrats on higher education in the Lords, said the debts faced by graduates would in general be between £30,000 and £40,000 and questioned whether that would deter students.
"A sharp hike in fees in this way may make students very uncertain as to whether they want to go to university," she said.
And she suggested the savings the government was making in the teaching budget for universities would be almost wiped out by the eventual cost of funding loans that are not repaid.
She told peers: "I do find myself in a dilemma, I don't hide that. I think there are elements of this package that are very fair and very right and very proper.
"But I end up by feeling that there are other elements in it which I don't understand and I think are unfair."
Labour's Lord Giddens said the government's system would provide "the worst of the American system without the safeguards".
He added: "This legislation is ill-thought through, corrosive and socially divisive."
However, Conservative former cabinet minister Lord Patten of Barnes, chancellor of the University of Oxford, criticised Labour's position.
He said: "If what the government is proposing is so noxious, if it's worse that anything since King Herod's slaughter of the firstborn, then I would like to hear from the opposition that they're either going to reject it or accept it because their present position is quite simply irresponsible."
Watch part one of the debate