The cap on tuition fees for university students in Wales is set to increase for the first time in more than a decade from September.

The maximum amount universities can charge per year for an undergraduate degree will increase by 2.8% from £9,000 to £9,250, Welsh education minister Jeremy Miles announced on Tuesday.

At the same time, the Welsh government is set to replace postgraduate grants with a fully repayable loan.

The move has raised fears among opposition members of the Senedd that people will be “costed out of education”.

Our universities are in a dire situation. Rather than investing in them, we are seeing the Labour Government making it more difficult for students from Wales to study in Wales

It comes as the Welsh government struggles to balance its budget for the next year, with cuts set to be made in a range of areas.

The education minister said: “We have resisted calls to raise the tuition fee cap in the past, but sustained inflationary pressure on higher education providers in Wales means an increase is now unavoidable.”

The increase, which is the first since 2011, raises the cap to the same level already charged in England, Northern Ireland and Scotland.

Loans to cover the fees will increase by the same amount.

The government does not set course fees, only the maximum that can be charged.

Mr Miles also described the decision to scrap grants for postgraduate students and replace it with a fully repayable loan as a “difficult” one.

Plaid Cymru’s spokeswoman for education in the Senedd Heledd Fychan MS has criticised the decision

She said: “The decision to increase tuition fees and scrap grants currently available to postgraduate Masters students will cost too many people out of education, adding to the skills gap currently impacting so many sectors in Wales and the Welsh economy more broadly.

“Our universities are in a dire situation. Rather than investing in them, we are seeing the Labour Government making it more difficult for students from Wales to study in Wales.

“I will be seeking urgent clarity from the Welsh Government regarding these cuts, and how they will work with universities to safeguard their futures as well as the futures of young people in Wales.”