Students are likely to find it harder to get a full-time higher education place in England this autumn.
Students are likely to fare best if applying for foundation degrees
The money universities and colleges are getting, in a 5.6% rise to £6.3bn, allows for an extra 21,900 places.
But this is less than the increase in the number of people who have put in applications: more than 29,800.
The government says funding is rising steadily, but universities say the extra for teaching is not keeping pace with rising costs - and some face cuts.
They are being told their shares of the overall settlement for 2005-06 from the Higher Education Funding Council for England (Hefce).
It includes £86m, within the £4bn for teaching, to fund more student places: about 11,000 full-time and 10,900 part-time, which Hefce calculates as 17,045 "full-time equivalents".
In addition, there are some 4,800 places which are not new, but unfilled from this year.
Although direct comparisons are difficult, provisional figures from the admissions service, Ucas, show that 9.4% more people have applied already this year than last just for full-time places in England: 29,834 more.
Most of the extra places are for two-year, vocational foundation degrees - 5,700 full-time and 9,900 part-time, plus 1,700 full-time and 4,000 part-time brought forward from this year.
There have been only about 13,000 applicants in total for foundation degrees, so those who apply for these are likely to find them easier to get.
Hefce's chief executive, Sir Howard Newby, was asked whether it would be harder for people to find a university place.
"Probably, yes, it will be harder," he said. "It's likely it will be more competitive."
Sir Howard said more people were getting better A-level grades, and demographic changes meant there were going to be more people aged 18 to 21 up to 2011 in England.
"To go to uni is, they believe, essential to the lifestyle they aspire to. It's becoming more normal to go to uni."
Higher Education Minister Kim Howells said there was a "continuing and steady rise" in university funding.
Next year total government spending would be more than £2bn higher than three years ago, rising to more than £9.5bn in 2007-08.
Research funding is rising by 10.8% overall to £1.25bn. That covers an expansion of research areas.
In keeping with government policy this is concentrated on research departments which had the best ratings in the last national assessment exercise four years ago.
Those are getting a 4.6% rise, while second-tier departments get 2.53% - the rate of inflation. Those further down get nothing.
Lecturers' union Natfhe said this meant teaching and research in many English universities was once again "playing second fiddle" to the needs of a few elite, research-centred institutions.
It said this would weaken efforts to "widen participation" - to students with no family history of going into higher education - and would weaken many institutions.
Universities UK, representing university vice-chancellors, argued that the core funding was going up by only 1%, well below inflation.
The other main lecturers, the Association of University Teachers, accused it of "targeting academics' pay".
"Universities would be unable to increase student numbers and widen participation without the hard-working members of the academic team," it said.
National Union of Students vice-president Hannah Essex also said there needed to be greater recognition of the value of learning and teaching.
"The many departmental and course closures at campuses across the country have demonstrated the impact that favouring research over funding can have on students and teachers.
"We can't encourage students to go to university only for them to find that research is prioritised over their own academic development and even worse, for their course to be cancelled as a result."
Have you applied to university for this autumn?
What do you think of the issues raised here?
Send us your comments.
The BBC may edit your comments and not all emails will be published. Your comments may be published on any BBC media worldwide.
This is a cross-section of the views we have received:
I have applied to university for this autumn and to be honest, hearing that application numbers are on the increase has calmed me slightly- it may explain why it has taken so long for my university offers to come through. I was never worried about getting a place as I applied to a couple of "safe" places as well to some more demanding ones, which I thought was the wisest thing to do for the sake of my own confidence- I just wanted offers from anywhere to reassure myself that universities wanted me!
Amy Longsden, Keighley, West
I have just received my offers from the universities I chose to go to this autumn. I think there is too much stress involved with preparation to exams in the summer as well as selecting a university where you will be studying for the next four years of your life! The fact that it is going to be harder to get into university for students in the future is very worrying.
May I ask what is the point of everyone going to uni? I myself graduated with a first class BSc in Maths and am finding it hard to find employment. I think that only if you attend the top three or four unis in the country is it worth studying towards a degree.
Most people think before they start uni, they just want to get to any uni, and believe they will find employment automatically on completing their degree. This is not true, and I think students should be made aware of this. What is the point of students going to uni, studying towards a degree that isn't going to get them anything or anywhere in life!?
As a first year student studying Ocean Science here at Plymouth, I am not surprised at a lack of places. University offers are now much higher than before with many other students left without a place at all by bureaucracy creeping into the university system. Surely there should be more emphasis on other achievements and not just on academic ability. Some people struggle with coursework and others exams and the people who go to university on the whole, are good at both, but this does not make them 'better' students.
Graham Symonds, Plymouth University
The reason why university applications are so much higher this year than last is because of the government's proposed rise in tuition fees which comes into effect in 2006. Instead of taking gap years, all students are applying this year to save themselves thousands of pounds.
Benj Bentley, Cambridge
Going to university should be a privilege, not a right. The culture among young people that everybody has a right to go to university must be stopped. People are able to attend university based on two Es at A Level, which has tarnished the status and value that used to be accorded to a degree. There are simply too many institutions and too many courses available such as Beckham studies or surfing studies which simply are useless and wasteful.
Funding of these institutions and courses are starving the best institutions of our country such as Oxford and Cambridge of vital funding, to worrying extents. This must be stopped and useless Universities and courses cut in order to preserve the country's leading institutions. Only those who work hard and are sufficiently capable should be privileged enough to attend university.
Kerry Maxwell, Oxford University
I am a second year A-level student and feel that the government need to realise that not everyone is that academically minded and therefore it is ridiculous to aim for 50% of teenagers to go for HE. You only have to go to my FE college to see that.
The government needs to spend more money on training dentists and doctors instead of these frankly (seen to be) second rate vocational courses!
Ranjit Bains, West Midlands
Why is it a requirement that the majority of school-leavers attend university or continue in education? I am a 30 year old mature student in my first year of an undergraduate degree, and around me I see a large number of students who, although they make a little effort, are relatively uncommitted to their course. Sure, if you want to study to be a doctor, or a barrister, or an academic, or any similar occupation, university is the ideal place for you. But so many people seem to be here for a three-year breathing space that will allow them to put off working for a bit longer and create a social circle outside school.
Working was great fun, made me feel as if I was contributing and that I was more part of the adult world. Now that I've come back to education, I am completely focused on my studies and know that what I'm studying is what I really love. I wish that all students felt the same way. They should!
I think it has been incredibly hard to get into university this year. I myself have been forced into deferring - meaning I will have to pay top up fees and work out my gap year. Furthermore, I have two friends who applied for law - one of whom achieved AAAAB in her AS levels and has only had one offer, the other AAAAA student has only had two offers, neither of which either wish to accept. It seems pointless even applying.
Specifically in response to Jatinder of London's comment, which I broadly accept and agree to be true, I would point out the following: at its end, life is all about weighing up causes of regret against causes of happiness and deciding, in hindsight, whether it was all worth it.
With that belief in mind, I know that even if I can't expect to just walk into a job at the end of a degree course, I don't want to be in a position in five or ten years' time where I can't get the job I want because I lack the qualifications. Maybe it will prove to be a waste of money and, far more importantly, my time but at least it'll save me from asking "what if...?"
Luke, Basildon, Essex, UK