"...David Cameron looks set to break his (promise) that £9,000 fees will be the exception. And what's more this incompetence blows a hole in the claimed savings from the tuition fees policy. Last year they claim that cutting University budgets would save the tax payer £2.9 billion. Even then it was apparent that the cost of subsidising more loans for higher fees would reduce savings by the end of the parliament to just £1.3billion. Now with most fees between £8,000 and £9,000 the Government will have to pay out even more in loans. So the saving to tax payers will not be £2.9billion, or even £1.3billion, if fees come in at the average we are currently seeing the cost of loans could be up to £0.5billion more annually. This would reduce the savings to well under £1billion."
Okay what you've done there Ed is typical short termism and confusing expenditure with an asset (i.e. a loan). One will sit on the Government's books reducing the surplus/increasing the deficit with regards spending, one will be an asset that is anticipated to be clawed back. You are just looking at this from a cash flow perspective rather than an overall effect. I am not going to deny that this may be more expensive in the long run, there is a good chance of that (given the below point), however you can't look at it over the life of this parliament as I don't think any of those who will graduate under this system will have done so until 2015 at least. What you have to do is look at it over the life of the average student - the cost of providing that qualification.
"And some experts suggest the system could cost more not less in the long run because they fear many of the loans may never be paid back."
Yes, an excellent point to highlight, this is exactly the progressive part of the policy. Many of the loans will never be paid back. No student will pay before the point of entry, they will subsequently only repay anything if they go on to earn over £21,000 (and then will only pay back at 9% on anything over this figure), should they ever be out of work they wont be repaying it and after 30 years the debt dies. This means that the only people who will pay it back are those who will benefit most from their University education who go on to make the most money. This is effectively the government subsidising these people to attend university but still expecting them to contribute if they are able once they have finished - just like a graduate tax (which you appear to advocate), the only real difference is that it is finite - it can reach an upper limit on what they can pay, which is effectively the government saying that your degree didn't bring about the expected benefit so we don't think you should pay any more.