The Tories yesterday promised to create thousands more university places next year, funded by incentivising graduates to repay their student loans early.
In a bid to avoid a repeat of this summer's crisis in university admissions, David Willetts said a Conservative administration would move quickly to accommodate soaring demand.
The shadow universities and skills secretary pledged to shave £300 million off the £30 billion student loans book in order to fund 10,000 additional places next summer.
The money would be raised by introducing a new discount for graduates who re-paid their outstanding student loans ahead of schedule.
There would be a 10 per cent reduction for additional voluntary repayments of more than £500.
Applications to university increased markedly this year as job opportunities for school and college-leavers deteriorated because of the recession.
Mr Willetts' proposals are part of a wider Tory plans, announced on the eve of the party's annual conference this week, to reduce Britain's growing number of unemployed.
Mr Willetts said: "This summer has seen a crisis in university places.
"The Government's failure to create a fair and affordable system means that thousands of young people with good exam results have been unable to get the education they need.
"With one in six young people not in work or education or training, it is vital that we prevent a similar crisis next year."
University and student leaders cautiously welcomed the extra places, but suggested that the discounted repayment plan could be more beneficial to the more affluent.
Professor Steve Smith, president of Universities UK (UUK), said: "This commitment to higher education is extremely encouraging at a time of competing pressures on the public purse in a period of economic austerity.
"It confirms the importance of higher education in a downturn.
"We look forward to discussing with the Conservative Party how we can ensure that their proposals do not disadvantage students from lower income backgrounds.
"Increased student numbers must not come at the price of reduced social mobility."
Wes Streeting, president of the National Union of Students, said: "Given that demand is set to increase further still next year, the commitment to providing additional fully funded places, is incredibly important.
"We would be concerned if this approach set a precedent whereby those from more affluent backgrounds enjoyed preferential repayment conditions on loan debt.
"Given that those from the poorest backgrounds are most likely to lose out without an urgent expansion of places, this is an acceptable short term fix."
Dr Wendy Piatt, director general of the Russell Group of leading research universities, warned that any new places must be fully funded.
"It is essential that any growth in the number of students must be funded in a sustainable way that will not create real and long term difficulties for UK universities and undermine the quality of the student experience," she said.
Dr Piatt added: "We welcome the idea of exploring alternative sources of funding the full costs of higher education and any incentives for students to pay back their loans more quickly than at present if they can afford to do so."