Middle-income parents will be forced to pay more for their children’s university education after the Government miscalculated the number of students eligible for grants.

It was forced to renege on some of its funding commitments after admitting it had underestimated the number of people entitled to a full student maintenance grant this year by almost 10 per cent.

It has now reduced the income threshold for the means-tested maintenance grant by 17 per cent to £50,020. Families earning below £25,000 will still get the full grant of £2,835. But some 40,000 prospective students - 10 per cent of next year’s intake - are expected to lose out.

A full or partial grant, which covers living costs but not fees, was made available to all students whose parents earnt up to £60,000, for the first time this year. Previously the cap was £39,305.

The reforms - brought in during the first days of Gordon Brown’s premiership - were designed to attract more working-class students into higher education and one third of students were expected to be eligible for the full grant.

Admitting the £200m funding gap John Denham, the Universities Secretary, said: “It is obviously an adjustment compared with what is in place for students who went to college or university this year.

“We have done it to get the right balance between my decision to spend more on student finance, because of the number of low income students in the system, and the need to make some changes to the student finance system so that the system comes into equilibrium.”

The number of student places will also be reduced from 15,000 to 10,000 next year to help plug the funding gap. It effectively makes the government’s aspiration for 50 per cent of all young people to enter higher education by 2010 an impossibility.

University and students’ unions and opposition parties accused the Department for Innovation, Universities and Skills (DIUS) of incompetence and playing fast and loose with students’ futures as the country enters recession.

Malcolm Keight, head of higher education at University and Colleges Union warned that the Government’s lack of strategy for student funding threatened to “throw the whole system into chaos”.

David Willetts, Shadow Universities Secretary, said the announcement was particularly embarrassing for Gordon Brown who pushed for the increased funding threshold. “His own policy is unravelling,” Mr Willetts said. “It shows that they have been completely taken by surprise and the figures they based their estimates on last year didn’t add up.”

Martin Freedman, head of pay, conditions and pensions at the Association of Teachers Lecturers (ATL), said: “Although this is supposed to affect so-called middle income families, the reduced family income threshold means students will be hit if they have two parents who earn no more than an average salary.”

Bahram Bekhradnia, director of the Higher Education Policy Institute said the reduction in student places came as the population of 18-year-olds is set to rise in the next two years. “Its effect may well be far from increasing the participation rate actually to reduce it.”

*Students who entered higher education after 2005 can apply for either a maintenance or special support grant of up to £2,835 if their family income is less than £50,020 (down from £60,000)

* A maintenance grant is paid in place of a student loan for maintenance. A special support grant is paid on top of the loan

* Those who qualify for a special support grant include single parents or two parents who are students, the disabled and students aged 60 and above

* All eligible, full-time students in higher education can take out a student loan for tuition fees of up to £3,145 in 2008-09

* Depending on income, students can also take out a student loan for maintenance of up £6,475

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