Three quarters of all universities in England are facing budget cuts this year - with potential repercussions for recruitment.
There is concern that the budget squeezes will force many institutions to cut the number of places on offer - meaning that there would be fewer graduates. The unions have already warned that this will make jobs more difficult to secure, particularly for those from low-income backgrounds.
On the other hand, some analysts expect that a reduction in the number of graduates would actually make it easier to get jobs. Keith Wymer of Pitman Training said, "Degrees are great, but for many professionals a training course is a far more effective, faster and cheaper way of finding a well-paid job." Mr Wymer believes that embarking on a short training course, rather than a three-year degree, would enable prospective employees to get into the labour market more quickly.
If the expected reduction in graduate numbers does take place, employers will be forced to rethink their recruitment requirements. Many firms require degrees, but these criteria may have to be loosened to include relevant training courses.
There is currently a rise of about 23 per cent per year in the number of people applying to university. Acceptance rates are now expected to fall.