Once upon a time (well, specifically about nine months ago) there was a fictional sixth-form boy, living on a council estate, who wanted to go to university. Let's call him Bob. From an early age - ever since his mother started force-feeding him flashcards, in fact - Bob had been interested in books. This had persisted throughout school, despite his mates occasionally calling him a spod, a swot and a wanker (and some even less pretty names that they certainly had not learned from flashcards).

Bob was well up for university then, until he looked at the figures. Autumn 2006 would be the first year that universities were allowed to charge up to £3,000 per year in tuition fees, and most were going the whole hog. Given his dad's job as a casual labourer and his mum's part-time job as a teaching assistant, their combined household income was only about £17,000, so this wasn't such a problem - Bob would just about qualify for the government's non-repayable yearly maintenance grant of £2,700. He might also get a small yearly bursary from whichever university he attended, and, taken together, these two grants would probably cover the costs of tuition.

The problem was . . . staying alive. Bob calculated that, conservatively, this would cost about £9,000 a year. Even if he landed a part-time job that brought in half that, he would still need to take out yearly loans for £4,500. Allowing for a few variables, Bob knew that realistically he was looking at about £20,000 worth of debt by the time he graduated. Suddenly university didn't look so tempting. In fact, the thought made him nauseous.

And Bob's experience doesn't seem so fictitious when you read the latest data on university attendance. This past month's Ucas figures showed that university applications in the UK are down by 3.5 per cent this year. Figures released simultaneously by the Higher Education Statistics Agency showed that the percentage of students from lower socio-economic groups attending university - already perilously low - has actually fallen since 2003/2004.

This is hardly surprising, considering the cost of further education. Twentysomethings are easily the most indebted generation in history, and although they are often derided for this - accused of having racked it all up on binge drinking - the fact is that, right now, embracing debt is the only way to get ahead. To go to university or buy a home, two of the key indicators of social mobility, involves facing up to debts that are difficult for people of all backgrounds. For middle-class kids, however, there is at least less of a psychological hurdle involved, in that they will probably have grown up expecting to go to university, and - through their parents' experience of having a mortgage, et cetera - will have more of a sense that debt can be paid off successfully. For working-class kids, whose families have always operated without a financial safety net, that degree of confidence is unimaginable.

So, for instance, one of today's young first-time buyers can still get on the property ladder, even without a generous deposit, but it involves a much higher mortgage premium than ever before. Keen to encourage this group, banks and building societies have begun offering mortgages lasting as long as 45 years. Although they do offer a lower monthly outlay, they could end up costing as much as £150,000 more than you would have paid on a 25-year mortgage, even for the most modest home.

All of which the government shrugs off. If they are cool with debt, we should be, too. They justify the cost of university by painting the experience in entirely utilitarian and acquisi- tive terms, as a conduit to a highly paid job: on proposing tuition fees, they suggested that each graduate would earn £400,000 more than a non-graduate over the course of his or her career. In fact, experts at Swansea University have found that male arts graduates are likely to earn a fairly negligible extra £22,000 throughout their working lives, which reflects that a) there are only so many highly paid jobs available and b) graduates aren't always just chasing the money - wouldn't it be horrible if they were? Many students attend university because they are interested in their subject and, often, they want to do something worthwhile at the end of it.

By making people pay for any potential advancement, the government has offered the working classes a shoddy deal: if they try to break out of the ghetto of poverty by attending university, they must face the ghetto of debt. Naturally, in this situation, many Bobs become risk-averse: they might be happy to take on some incremental credit-card debt (which, as we all know, has a destructive habit of building up), but it seems ridiculous to think of plummeting head first into the magnitude of debt that a university education or home ownership requires.

In 1990, the richest 10 per cent of the British population held 47 per cent of the wealth, and the richest 1 per cent had an 18 per cent share. Those figures have now risen to 54 per cent and 23 per cent, respectively. While the government expects everyone - and especially the working classes - to take a huge financial gamble in order to get on, the gap between rich and poor is fast becoming a gulf.

Kira Cochrane is the Guardian women's editor