Cuts to tuition fees that would save students at least £5,000 are being considered by the Chancellor, it has been reported.
Philip Hammond is looking at capping annual charges at £7,500 instead of the current level of £9,250, according to The Sunday Times.
The Government has come under intense pressure to ease the burden of student finances after warnings that most graduates will never clear their debts.
Universities have also faced a wave of criticism for paying out staggering salaries while those signing up for courses are plunged tens of thousands of pounds into the red.
Critics have accused institutions of acting like a cartel to set the maximum level of fees and concerns have also been raised about student loans with interest rates of more than 6%.
Universities would be given a £1,500 annual top up for each science student to cover the greater expenses of their degrees under the proposals, according to the newspaper.
Reforming the system would give the Tories an eye-catching policy following the disastrous general election result on the back of the party's austere manifesto.
Labour scooped up younger voters as Jeremy Corbyn promised to scrap tuition fees and his suggestion he would "deal with" student debt.
Tuition fees for English universities trebled to a maximum of £9,000 a year in 2012 but the Government announced last year they would be allowed to increase with inflation.
A report by the respected Institute for Fiscal Studies in July found the combination of high fees and large maintenance loans "contributes to English graduates having the highest student debts in the developed world".
Prime Minister Theresa May's former chief of staff Nick Timothy described higher education as an "unsustainable and ultimately pointless Ponzi scheme" that burdens graduates with debt and needs radical reform.
Mr Hammond acknowledged concerns about the student finance system at a parliamentary committee on Tuesday.
The Chancellor said the system was being kept under review and admitted the Government had expected universities to charge a wider range of fees for courses.
A Treasury spokesman said: "We will not comment on speculation."