In reply to NorthernRock:
Questions to those who advocate "more academically selective and free".
First, presumably you would not object to private universities, where those who had missed the academic cut could pay themselves to get a degree?
If you're ok with that, would you object to the state running a loan-and-pay-back scheme to encourage them?
If you're ok with that, then, are you very different from the current proposals, but with generous state scholarships for the academically most able?
Note that on any "academically selective" cut the public-school kids are likely to do very well -- such schools have a track record of producing in droves kids who can jump whichever academic hurdle you erect, and will fine-tune their provision to do so.
So, on your academic-selective-but-free model, are you ok with the fact that much (perhaps half?) of your sizeable state spending on this would be going to families who can afford public schools?
If that's not ideal, how about the system I advocate, which is much like the system currently being proposed, but with the addition of generous state scholarships to pay tuition for kids who are the brightest in their cohort (say the top 15%?), and who come from lower-income families (threshold I'm not sure), and who want to study subjects the country needs (so more scholarships for engineering, etc, and none for "media studies" or theology). Such a scheme to be tweaked to keep overall public subsidy at a sensible amount (about 1% to 1.2% of GDP is about median for rich countries).