TODAY is D-Day for thousands of school-leavers in the North-East. As their A-level results drop onto the doormat, many will feel their futures lie in the brown envelopes.

Prince William is going through the same nerve-wracking process and will be hoping that he has done well enough to get the grades he needs for university.

One problem that does not concern him, however, is the rising cost of higher education.

New research has revealed that 64 per cent of the UK population believes that people are being discouraged from higher education because of the cost, while two thirds of parents are afraid that they cannot afford to pay for their children to go to university or college.

They are right to feel concerned. Student loans are a main source of income according to 78 per cent of students, but parents, too, are an important source of support. Between 1998 and 1999, parental funding increased by £82m, rising to £522m.

Many students are also taking the increased financial burden upon themselves with 40 per cent taking jobs during term-time - some working up to 20 hours a week. Two thirds report that work adversely affects their studies - 30 per cent said they missed lectures because of work while one in five were late submitting essays or projects.

The study was carried out by freefund.com, a new Internet-based service which has been set up to help students locate scholarships and bursaries.

Iain Aitken, spokesman for freefund.com, says: "Thousands of students are sacrificing grades to make ends meet and with student debt continuing to rise, things will only get worse.

''The average debt per student is £5,286 but with the introduction of tuition fees and rising living costs, this could soon top £12,000.''

Rising costs, however, have not generally deterred applicants, according to the Universities and Colleges Admissions Service (Ucas). Total applications by June 30 this year were 404,706, a drop of just 0.4per cent compared to last year.

But there is also evidence to suggest that the growing cost of attending university is leading to an increase in the number of students trying to save money by staying at home.

Figures released by Ucas show a 2.3 per cent rise in applications from students wanting to go to their local university. Now more than one in six people - 71,639 - are choosing not to move away from home to study.

About 20 per cent of Durham University's students are from the region, and there has been a slight increase this year. Spokesman Keith Seacroft says the highest increases in applications were from students in the Darlington, Sunderland and East Durham areas.

Sunderland University has also seen an increase in students from the local area.

There has been an increase, too, in the number of school-leavers taking a gap year as teenagers try to earn money to support themselves at university. The number of gap year applications rose by 2.5 per cent to 29,232.

So how much does it cost to go on to university or college and where does the money come from?

FUNDING:

The cost of pursuing higher education falls into two categories - tuition fees and living costs.

From 1999/2000, new students made a contribution of £1,025 a year towards tuition fees, subject to family income and proof of UK residency for at least three years before the start of their course.

Any student whose parents' residual income is above £17,370 will have to make a contribution towards tuition fees on a sliding scale of up to £1,025 per year. A family income of approximately £28,000 or more will mean they have to pay the maximum fees.

The Government estimates that one third of students is exempt from fees, one third pays a contribution and one third pays the maximum fees.

Students on sandwich courses, part-time initial teacher training or an overseas exchange of at least 12 months will invariably have a lower fee band. Also, students receiving Disabled Students Allowance will not be means-tested.

RECENT CHANGES:

In Scotland, the Scottish executive has approved the abolition of up-front tuition fees for students from Scotland and other EU countries, but not from England, Wales or Northern Ireland. Fees will be replaced by a graduate contribution scheme where graduates will have to pay back £2,000 when they start earning £10,000 a year.

Earlier this year, the Government said it would adjust the means-testing of tuition fees to exempt a further 50,000 students from England and Wales from the £1,025 annual fees.

Furthermore, from next year, 10,000 of the poorest students in England and Wales will get bursaries. There will also be extra child care grants for students who are parents and assistance for mature students with the cost of their children's school meals.

STUDENT LOANS:

Loans of up to £4,950 a year are available with repayments linked to an applicant's income after leaving higher education.

A number of factors are involved in calculating how much a student will receive from the Students Loans Company. Students living in London will receive more than counterparts living at home and studying outside London. In calculating loans, the final year is always lower as it will not include a sum for the summer vacation.

UNIVERSITY SCHOLARSHIPS, BURSARIES AND AWARDS:

Little publicity is given to the awards offered by universities and colleges. An applicant may have to take a written exam or an audition for a drama and music award. This is in addition to high A-level or Higher grades.