This takes into account of bursaries and fee waivers already announced, although some universities may still offer further student support.

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The Department for Business, Innovation and Skills said universities will need to meet tough new criteria for attracting the brightest students from lower income backgrounds, including offering fee waivers and bursaries.

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President of the National Union of Students Liam Burns said Mr Milburn was right to say the government should immediately cease funding "fictional, partial fee waivers", but added that reducing upfront financial support would also have questionable merit.

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The comparable legislation that mandates user-fee waivers for small medical device companies, the Medical Device User Fee and Modernization Act (MDUFMA), specifies different criteria: Whether or not a company is small is determined by gross receipts or sales for the company and affiliates.

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