Prospective students are being forced to give up college places or professional courses for which they have been accepted as local authorities freeze or cut their budgets for discretionary grants.
More opportunities than ever are on offer at colleges or universities, but the upsurge in demand for courses of all kinds has placed local authorities under intense pressure to award more grants at a time when their resources are being squeezed by central government. Mature students and young people whose families can offer no financial support are particularly vulnerable.
Warwickshire, which has been charge-capped for the second year running, is giving no new discretionary awards except to students with special needs. Northumberland has said that 1,000 students may miss out on courses this year as a result of reductions to its grants budget.
All councils are resorting to nitpicking and introducing tighter criteria - ruling out applications on grounds such as lateness, wrong type of course and residence qualifications.
Agricultural college principals have identified nearly 600 students unable to take up places through lack of grant last September and expect the situation to be worse this year.
At the College of Law, the biggest solicitors' trainer in England, a survey of students who had not taken up places found that more than half had pulled out for financial reasons.
Richard Holbrook, chairman of the college's board, said that sponsorship by solicitors' firms was being hit by the recession. He was also worried that the accumulation of student loans was deterring candidates. 'Without discretionary grants it is very difficult to get into the profession. If you don't have a good income in the family, that's it,' Mr Holbrook said.
Students on degree courses at universities receive mandatory grants to cover their fees and, depending on their parents' income, maintenance grants to cover their living costs. They are also eligible for student loans.
All other students rely on discretionary grants from their local authorities for fees and maintenance: for instance, those over 18 who are trying to qualify for university by doing A-levels or a degree foundation course at a further education college.
Anyone undertaking a dance and drama course relies on a discretionary grant, as does a trainee solicitor doing a professional qualification after a degree.
The Conservative-led Association of County Councils will this week review the worsening crisis over discretionary grants in the light of clear evidence of the failure to keep pace with demand. Whereas mandatory grants in England and Wales increased by more than 50 per cent to pounds 2bn in the past two years, discretionary awards rose slightly and then fell back to pounds 204m this year, according to a report to the association's education committee.
Agricultural students are particularly badly hit because they have to board, which typically costs pounds 2,000 a year on top of pounds 600 fees. Last year 589 successful applicants turned down places because they did not receive grants.
Warwickshire has halved its pounds 2m discretionary grants budget, with much of the remainder earmarked for students with special needs. Julian Davies, deputy county education officer, said prospects for 1993 were not good.
Ted Weekes, vice-chairman of Northumberland's education committee, warned that 1,000 students could miss out on courses as a result of a pounds 50,000 cut.
Cambridgeshire cut its discretionary awards budget by 25 per cent this year to pounds 1.7m and has made only 10 dance and drama awards. Applications have risen substantially, however.
Lancashire, with the largest discretionary awards budget in England at pounds 12.5m, had to suspend its pioneering scheme of awards to adults returning to full-time education when it was overwhelmed by the demand. Andrew Collier, the chief education officer, said the outlook was bleak. 'Anything discretionary is bound to be vulnerable,' he said.Reuse content