Sixth form leaders warned this week it would be harder to persuade students to apply for university after the axeing of tuition fee grants.

Last week’s decision by the Assembly government to abolish the grant means Welsh-domiciled students will have to pay top-up fees wherever they study from 2010.

Some grants will be available for disadvantaged students, but teachers and union leaders are concerned the decision will curtail the aspirations of those from middle-income homes who rely on parental contributions and student loans.

David Evans, secretary of the NUT Cymru, said: “The tuition fee grant was beneficial because it gave opportunities to sixth formers who otherwise wouldn’t have gone to university. Teachers will have a challenging job persuading students to move into higher education, but it could be even more challenging persuading parents.”

Phil Davies, head of sixth form at St Cyres School in Penarth, said some students were already reconsidering university applications.

“Students are concerned over the amount of debt they are going to have,” he said. “The increased fees can have nothing but an adverse effect - some are simply not prepared to incur that level of debt.”

The tuition fee grant was introduced in 2007 and made available to students domiciled in Wales and studying at Welsh universities.

Teachers reported that it led to more students staying in Wales. But the abolition of the grant could see more students opting to study elsewhere in the UK because it is no longer cheaper to stay in Wales.

The Assembly government has promised to reinvest Pounds 44 million saved from scrapping the grant in higher education and enhancing the Assembly learning grant. Students from the lowest-income families will be able to claim up to a maximum of Pounds 5,000 - Pounds 2,100 more than at present.

John Williams, head of Pen-Y-Dre High in Merthyr Tydfil, said a lot of his students come from socially deprived backgrounds and have traditionally found it more difficult to get a university place.

“For many, the decision to attend university is price-sensitive, so I’m sure these new incentives will have a positive effect,” he said.

Teachers in Wales could also benefit from the shake-up as Pounds 2m of the cash saved from scrapping the grants will be used to encourage prospective PGCE trainees to undertake the course in Wales rather than England.

The current level of incentive grants in Wales depends on the course studied and can range from Pounds 4,200 for those training to teach English, to Pounds 12,200 for a maths or science course. The grant will now go up by Pounds 1,800 all round, bringing it in line with England.

Rex Philips, organiser of the NASUWT teachers’ union in Wales, welcomed the new funding but questioned its wisdom in the current economic climate.

“We are facing a massive round of redundancies at schools in Wales,” he said. “There’s no point training teachers if they are not going to get jobs.”