Grants and loans that will be supplied to students starting university this year will be frozen, but the tuition fees will be set to rise, according to Government ministers.

This means that the level of debt students find themselves in could rise.

Tuition fees will be increased by just over two per cent to a maximum of £3,290 per year, according to the Department for Business; Innovations and Skill, which is led by the Business secretary, Lord Mandelson.

The maintenance loans and grants that students can take out, will remain at the same level as last year; with the maximum grant level staying at £2,906.

As the inflation rate is as a low level, students may be forced to take out private loans, while building up large tuition fee debts because fewer jobs will be available once they graduate.

Wes Streeting, the president of the National Union of Students, said: "It appears the inflation rate is being applied where it suits universities, but not where it will improve student support."

David Willetts, the Shadow Universities Secretary added: "The Prime Minister, Gordon Brown said there would be an extra increase in financial support for students, but he has run out of money and has been cutting back support for students ever since.

"It's poorer students in particular who will be hit by these reductions. This is why we need to get on with the long-promised student finance review to do more to help students from poorer backgrounds."