The government will miss its target of getting 50% of under-30s in the UK into university by 2010 without more help for lower income students, the National Audit Office has warned.

Its report on universities in England says many youngsters from poorer families are deciding not to go into higher education because of money worries.

Student finances

Richer students get �1,375 a year from their families Poorer students get �160 a year from their families Debt of richer students after one year: �2,645 Debt of poorer students after one year: �3,000

It said the current confusing system of financial help should be simplified - and universities should make admissions procedures clearer.

Meanwhile, a survey for BBC Radio 4's Today programme suggested that university vice-chancellors believe the government's target cannot be met under present funding arrangements.

It also revealed concerns that the UK's top universities were finding it increasingly hard to compete with the best in the world, because of a lack of resources.

Money worries

While more students than ever are going to university, the proportion of those from lower social groups - about 28% - has not changed since 1994, the NAO report found.

Teenagers interviewed by the NAO who chose not to go into higher education gave "money worries" as the main reason.

The report found that working class students are indeed leaving university with bigger debts than their middle-class friends.

The report said that while students from the top two socio-economic classes got an average of �1,375 from their parents, those from the bottom two received an average of �160.

Universities with fewest lower-income students

London School of Economics Bristol Royal Vet College Cambridge Oxford

By the end of the academic year, the average debt of the top two was �2,645, compared with �3,000 for the bottom two.

Students from the two lowest social groups were also more likely to be doing paid work while studying.

Those who were put off going into higher education said the debts they had heard about were "too large to contemplate," the report said.

The Department for Education and Skills is currently reviewing whether the current system of fees and student loans should be changed - and possibly the grant restored - to ensure it can meet its targets.

Need for change

The higher education minister, Margaret Hodge, acknowledged that the government had to do more.

"I do think the current system is a nightmare," she told Today.

"We have got all sorts of means testing. It has come from a well-intentioned view that we want to target limited resources at those most in need but if you over-target it becomes too complex and nobody understands it.

"We have to simplify it so that students from lower income backgrounds aren't put off going to university."

The NAO also urged universities to treat applications from all social groups fairly.

Universities with most lower-income students

Wolverhampton Teesside University Newman College University of North London Bolton Institute of Higher Education

It said that although lower-income children were less likely to apply for university, those who did so were more likely to be rejected than their wealthier peers.

Some universities had done much better than others in recruiting lower-income students, it found.

Bottom of the list - with the lowest proportion of working class students - was the London School of Economics, followed by Bristol University, the Royal Veterinary College, Cambridge and then Oxford.

Top of the list was Wolverhampton, followed by Teesside University, Newman College, the University of North London and the Bolton Institute of Higher Education.

The vice-chancellors surveyed by Today all said they were finding life difficult under the present arrangements.

All said they were having problems recruiting good staff in particular subjects, with low pay being the main problem.

They were unanimously in favour of tuition fees for students, but also strongly in favour of maintenance grants on a means-tested basis.