The numbers of UK students applying to start university this autumn has dropped by 8.7% compared to the same point last year, official Ucas figures show, as tuition fees are set to rise.
The biggest impact is seen in applications for England's universities with a drop in 9.9%, the data released on Monday reveals. Overall, the drop in students from home and abroad is 7.4%, while fees are set to nearly triple to a maximum of £9,000 this autumn.
But Universities UK said the "dip is far less dramatic than many were initially predicting".
The application rates of 18-year-olds from England's most disadvantaged areas has decreased "slightly" but surprisingly, there has been a larger decrease in the rate from the country's most advantaged areas. There is "no clear change" in applications from Northern Ireland, Scotland and Wales.
Universities and Science Minister David Willetts called the 0.2% decrease in disadvantaged students "encouraging".
Ucas chief executive Mary Curnock Cook said the "widely expressed concerns" about recent funding arrangement changes in higher education having a disproportionate effect on more disadvantaged groups were "not borne out by the data".
"However," she added. "I remain concerned about the wide and increasing gap between the application rate of men compared to women."
According to the figures, the application rate of 18-year-old males has decreased, while the difference in application rates between men and women has increased.
Applications by students from countries within the European Union, who will also be affected by the hike in fees, fell by 11.2%, while Ucas reported a surge in students applying from outside the EU. The 13.7% rise in foreign students applying, particularly from the Far East, inflated the overall figures.
But Sarah Spencer, academic director of the distance learning centre Oxford College, called the drop "sudden and severe".
"While last year's numbers were boosted by prospective students rushing to start their courses before the fees increase, this year's data shows demand - warts and all.
"And it's not a pretty picture. With many universities now charging £9000 a year for tuition, the cost is clearly scaring off many would-be students.
"It's years since getting a degree was any sort of guarantee of getting a good job. Now university fees are so high that a three-year degree course is increasingly looking like an expensive gamble.
Spencer added distance learning courses are becoming increasingly popular as students feel the applied courses will provide a faster, cheaper access to a degree.
"As even the ivory towers of academia are buffeted by the chill economic winds, students' fears about cost and the anaemic jobs market are combining to change the shape of higher education."
There is also no increase in the figures to suggest those who would normally have applied aged 19 in 2012 applied aged 18 in 2011 instead.
Figures for 18-year-olds are particularly important as they have not yet had the chance to apply. In England, the numbers of first-time applicants have decreased by 1% this year, compared to an annual increase of 1% since 2006. Again, in other UK countries, Ucas reports "little change".
The 1994 Group of research universities has responded to the news that university applications have fallen by 7.4%.
Professor Michael Farthing, chairman of the organisation, said:
“The cuts to funding gave universities little option other than to increase fees and as a result many prospective students have obviously been wary of applying this year. The uncertainty caused by the Government’s haphazard approach to reform has not helped.
“But the fact remains that going to university is an excellent investment."Suggest a correction