Can your purse stretch to being a student?

How to ensure you get all the funding you're entitled to as tuition fees escalate for this year's intake of university undergraduates

What to study, which university to choose and - perhaps most critically - what sort of nightlife is there?

These are the usual preoccupations for hundreds of thousands of students as they consider where to continue their education.

But today's undergraduates now have another crucial decision to make: how to fund university life.

Student debt is already at a level to put many off. Over the past three years, Barclays bank reports, higher studying and living costs in England and Wales have led to a 13 per cent rise each year in the level of debt.

In its 2005 Graduate Debt survey, the bank found that if current annual increases continue, student debt at graduation for those who entered higher education last September will stand at £20,000. And things are set to get worse, with top-up fees of up to £3,000 being introduced this autumn - a big jump from the current cost for tuition of around £1,175.

Institutions have been given the power to introduce variable fees for full-time undergraduates in England - although, rather confusingly, different fee arrangements apply in Scotland and Wales.

While most universities have indicated that they intend to levy the full £3,000 a year for a degree course, some, such as Leeds Metro- politan, plan to charge less.

Universities also have the power to charge different fees for different courses - so some may come at lower prices in a bid to encourage higher participation.

The Government's aim is that half of all 18- to 30- year-olds will be at university by 2010. It says that as debts don't have to be repaid until the graduate is earning, the funding system is fair. Repayments are currently set at 9 per cent of any income over £15,000 a year. So on a salary of £18,000, graduates would pay £20.80 a month.

The National Union of Students (NUS) is concerned that fears of debt, and confusion over the new system of top-up fees, are deterring potential students from applying to university - particularly those from poorer families.

The latest figures from the Universities and Colleges Admissions Service (Ucas) show a 3.7 per cent decrease in applications to English universities for the intake this September.

The NUS calls these figures "extremely worrying". Its president, Kat Fletcher, says: "Some students may not have applied because they just don't understand what [finance] is on offer."

Ministers defend the top-up fees by pointing to a raft of grants and bursaries for lower-income families. These, they claim, have been introduced to cushion the debt and address the issue of financial hardship.

The application process for funding has now opened, so if you are planning to go to university this September, you need to understand the support available and how to get hold of the cash you are entitled to.

Loans for tuition fees

As with maintenance loans for helping with living costs (see below), the repayment rate for tuition fees is not set in the same way as normal commercial loans from banks or building societies. Instead it is linked to the rate of inflation (it is currently 3.2 per cent).

Depending on the course charges, students qualify for up to the full £3,000 to cover the fees.

The loan must be taken out in the year of study, and interest will be applied from that point onwards. Any students wanting to pay off all or part of the course fee without using a loan will have to do so upfront.

Loans for maintenance

Students can also apply for means-tested loans to meet living costs, such as course materials, accommodation, food, clothes and travel. The amount borrowed will depend on their parents' income and the place of study.

For the 2005-06 academic year, the maximum annual loan will be £3,415 for students living at home; £4,405 for those away from home and studying outside London, and £6,170 for students who are away from home and in the capital.

Maintenance grants and bursaries

Students from poorer families can apply for grants that don't have to be repaid.

Those whose parents have an income of £17,500 or less will qualify for an annual maintenance grant of £2,700 to cover living costs.

Above this £17,500 figure, grants are determined on a sliding scale - falling in relation to parental income until they stop altogether at £37,426.

Half of all full-time students are likely to be eligible for a full or partial grant, official figures suggest.

Each university must also provide non-repayable bursaries for its poorest students. In this situation, if a university is charging the full £3,000 for a course, it must offer a bursary of at least £300 - to make up the difference between the maintenance grant of £2,700 and the top tuition fee.

The application process

You can apply for financial support as soon as you have submitted a course application form - you don't have to wait for confirmation of your place.

Applications can be made on paper or online via Student Finance Direct (a service managed by the Student Loans Company in partnership with the Government) at www.studentsupportdirect.co.uk. The form (PN1) is also available from your local authority.

'The new system is fairer'

Emily Bostock, 18, from Hartlepool has been building her savings to help fund university life.

The 18-year-old - who hopes to take up an offer from Newcastle University to study biology - has been putting money by from her part-time job as a waitress. This will supplement the money her parents are saving on her behalf.

"It has always been my plan to go to university, but I'm concerned about how I'll cope with the financial pressures," she says. "I know it will be expensive, particularly with the changes that are coming into force this September."

Emily, who is studying A-level law, physics and biology at Hartlepool College, has already started applying for the loans she is entitled to.

"I think the new system is a lot fairer - and that the support system in place will make managing my finances a lot easier when I get there."