The Government is looking at cutting grants for the poorest university students, reports suggest

BBC Newsnight says BIS ministers are divided on the issue

Police lead students through central London (Getty Images)

The Government is looking at cutting grants given to help the poorest young people study at university, reports suggest.

BBC Newsnight says the business department is reconsidering a decision not to slash the grants, which were saved from cuts after Liberal Democrat objections in 2013.

The cuts would be made by tightening eligibility for the grants and then shrinking the payments “to nothing”, a source told the programme.

Students who come from households with incomes under £25,000 current receive £3,387 each year to help with the costs of their studies.

Those from households up to £42,000 also receive some support. The total cost of the grants to Treasury is £1.57bn.

Tuition fees were raised to £9,000 a year by the Coalition government, an increase from £3,000. The rise is unlikely to have saved the government any money, according to an analysis by the Institute for Fiscal Studies (IFS).

The BBC says there is disagreement between universities minister Jo Johnson and business secretary Sajid Javid about whether to proceed with the cuts. Mr Johnson is said to be less enthusiastic with the plan.

Non-protected government departments are likely to suffer slightly sharper cuts to their budgets over the next five years than the last, according to an IFS analysis.

“Cuts would need to increase from the 2.0% a year seen over the five years from 2010–11 to 2015–16, to 2.2% a year over the three years from 2015–16 to 2018–19″, the Institute said.

The Department for Business, Innovation and Skill (BIS), which runs universities, is not protected, and will have to make significant cuts to balance out reductions in its budgets.

A spokesperson for BIS told the Independent that the department did not comment on “speculation”.