David McHugh’s mind wandered as his lecturer droned on, repeating the words of a PowerPoint slide that the students could already read on the overhead screen.

McHugh was wondering if it was worth it. He had already failed a couple of first-year modules. Should he keep going on a computer studies course that he found disappointing, running up tens of thousands of pounds in debt just so he could tell employers that he had a degree?

The 19-year-old from Cow-bridge, in the Vale of Glamor-gan, has now done his sums and made up his mind: he will leave Swansea this summer for a job in the computer industry.

“There was such strong pressure at school for everyone to go to university,” said McHugh, who attended a local comprehensive and had only scraped into Swansea with A-level grades of B, C and E. “At the time I thought it was the right thing to do but now I’m not so sure.”

He has calculated that the higher starting salary he would be paid as a graduate - about £5,000 more - does not justify his predicted £25,000 debt from the three-year course.

McHugh’s experience may not be typical of Swansea - a popular university with a low drop-out rate. But it will be recognisable to tens of thousands of families across Britain for whom the prize of a degree has lost its lustre.

According to a parliamentary report published last week, £800m spent by the government over the past five years on various schemes to cut student drop-out rates has had no impact - 22% of students fail to complete their degrees, almost exactly the same proportion as in 2002.

The performance of individual universities also varies widely, with just 1.4% of Oxford undergraduates dropping out in their first year. By contrast, at Bolton, which became a university only in 2005, more than 18% fail to make it into their second year.

Comparisons with the past are difficult because of the conversion to universities of the former polytechnics in the early 1990s. But a 1988 survey suggested that the rate of students failing to complete their courses at universities was 10%. South Bank polytechnic, the only one to release figures, had a rate of 11%.

So why do nearly a quarter of students now think getting their degree is not worth their while and what can be done about it?

HIGHER education has been expanding for half a century. There are more than twice as many 25-year-olds with degrees today than there were 18-year-olds with A-levels 40 years ago.

In 1999 Tony Blair decided to increase the pace of change and announced his target that 50% of underthirties should be university educated by 2010. He justified it with a typically jaunty but vacuous turn of phrase, saying: “In today’s world there is no such thing as too clever.”

Progress has been slow. About 42.8% of the underthirties have now been to university, up from 39% in 2000.

Many observers believe, however, that the drive for higher education is dragging people into the university system who are not suited to it, which leads to the drop-out rate remaining stubbornly high.

Leo Enticknap, a lecturer in cinema at Leeds University who taught at a former polytechnic until 2006, said many students at his previous employer should not have been in higher education at all.

“Too many school-leavers lack skills such as the concentration to read a monograph, understanding the pertinent points from a lecture or knowing basic grammar and punctuation,” said Enticknap.

“There are some people who may come out of it with a meaningful career, but for many degrees it’s a minority. A lot really struggle.”

Even the former head of an Oxbridge college said it had been ill-prepared for “widening participation”, the Labour buzz phrase. The policy in its early days had been “disastrous”, the former head added: “It led to all sorts of psychological problems, even suicide attempts, for people who simply had no idea of what was going to hit them.”

The universities are in a tricky position. While their funding is linked to a number of parameters, the simple equation is that the more students they teach, the more money they get from central funds.

Losing students is financially perilous - especially as the cost to the universities is far higher in the broadly science-based subjects that account for the highest drop-out rates (see panel). When a science student drops out it costs the university £13,684 in income, compared with £2,521 for an arts degree. Many universities are spending hard to attract and retain students and have slipped into the red. Manchester racked up a deficit of £12.4m in 2006-7, while Nottingham Trent’s figure stood at £7.4m. Sunder-land and Thames Valley - which are both near the bottom of the drop-out table - had deficits of more than £4m.

“The government has blown the system up like a balloon,” said Alan Smithers, director of Buckingham University’s centre for education and employment research. “The most selective universities have few drop-outs. But others have to fill places to draw their full funding and they may be taking more risks.”

The risks are not only in the calibre of the students entering the courses. There is also the question of the staff used to teach them once they get there.

Last week’s report by the Commons public accounts committee warned that the expansion of universities had led to many losing the “human touch” - the direct contact between academics and students that can be the most effective way of stimulating minds.

A report last year found that students in English universities received an average of 14 hours of “contact time” a week. In total, students were working seven hours less a week than the European average of 33 hours. In Germany and France the totals were 34 and 35 hours respectively, while the Portuguese put in 41 hours a week.

A lack of interaction with tutors is one of the most commonly cited reasons for students who drop out. Many senior academics take little interest in teaching undergraduates as most grants from the government are based on their output of research papers.

Some students complain of being taught only by postgraduate students or of going through their entire course with no academic knowing who they are.

Rachael Smith, 23, dropped out of her degree in theatre studies at Royal Holloway, University of London, in November 2005. She is now studying a non-degree-level drama course at Bristol Old Vic.

“A lot of the lecturers there were PhD students who seemed to be more concerned about finishing their papers,” said Smith. “I felt like I walked into the drama department and no one knew who I was. A lot of my friends said they felt anonymous.

” Other reasons why students drop out range from McHugh’s cost-benefit calculation to an inability to cope with academic pressure. Some find the grim concrete bunkers occupied by many institutions crush their will to continue.

“There was no natural light and it was altogether grim and bleak,” said Sam Baylis, 25, who dropped out of Birmingham City University after a year on a marketing and communications degree. He is now a nightclub promoter.

Like the concrete, the course was underwhelming for Baylis: “We were studying an arts course in a business department and we didn’t have the right resources. Even the library books we needed were at a different campus so we’d have to catch a bus just to get the appropriate material.”

Birmingham City takes such criticisms seriously. It is spending £250m on a new campus and says it is working hard to “make sure prospective students have enough information before they arrive and to help them with any problems they have once they’re here”.

Yet clearly the efforts to reduce the number of students giving up on their courses are not working. This would be easier to accept if it were not so expensive for taxpayers. University drop-outs cost the exchequer £450m a year in wasted fees every year.

Bill Rammell, minister for universities, accepts there is more that institutions can do to keep their students. He has commissioned the Higher Education Funding Council for England (Hefce) to research the best ways of doing this.

The methods range from the simple, such as providing transport for students living at home, to more subtle techniques, such as providing skilled mentors able to pick up signs of stress.

Wolverhampton University, which receives more than £3.5m a year to cut its drop-out rate, uses computer software to alert supervisors if a student has missed a worrying number of lectures or seminars.

Universities have to be careful, however, that the supervision of students does not become too intrusive. “It is a delicate set of judgments,” said Kevin Whitston, Hefce’s head of widening participation, about the Wolverhampton programme. “It is not disciplinary. It is making sure alarms are set off appropriately. With university students, you are talking about adults who are entitled to make their own decisions.”

Given the rising cost to students since the introduction of tuition fees, perhaps condensing more courses into two years is a good option. This would cut living costs, which account for the majority of graduate debts. More than 33,000 students a year are already enrolling in such foundation courses.

THE government’s critics, however, believe that drop-out rates will be cut significantly only by dispensing with the target culture and preparing students better for an academic education while they are at school.

David Willetts, the shadow universities secretary, said that drop-out rates were still high “partly because of this artificial target [of 50% entering higher education]. You should not have tractor production-style targets. The task for everyone should be to raise standards in schools”.

While that is the long-term solution, many academics believe they cannot win what has become a numbers game as more and more students flock to their institutions.

For its part the government has been trying to wriggle away from the 50% figure that it was saddled with by Blair. By the time of the 2005 manifesto, the “target” had become an “aim”. This weekend Rammell moved still further.

“We are increasing participation in higher education towards 50% of those aged 18-30, with growth of at leasta percentage point every two years to the academic year 2010-11,” he said.

The numbers entering the system are still rising. Although the increase of tuition fees to £3,000 a year brought a temporary dip in applications two years ago, figures published earlier this month showed that the number of people applying to university had gone up more than 7% ina year to more than 420,000.

Rammell said the high level of applications showed universities were able to cope with expansion. “Student retention rates in England compare well with other developed countries,” he said. Indeed, in America 46% of students drop out while in Germany the figure is 27%.

For the likes of Smith such comparisons will not mean anything. “With hindsight I should have left earlier,” she said. “In my parents’ eyes it was a complete waste of money. It makes me feel quite bitter.”

Additional reporting: Morwenna Coniam

The facts and figures of university drop-outs

WORST DROP-OUT SUBJECTS

Maths and computer sciences 11.9%
Engineering 11.7%
Business studies 11.1%
Architecture 10.7%
Veterinary science 10.6%

- About 28,000, or 8.1%, of students who start a full-time degree each year drop out in the first year

- Britain’s overall drop-out rate of 22% compares well with America and Germany, where respectively 46% and 27% of students fail to complete their courses

- Japan tops the global completion table with 92% of those starting a course getting a degree. In Ireland, the European leader, the figure is 84%

- An average 23-year-old graduate earns £18,096 a year, while someone who left school at 18 will be earning £16,172 by the same age

- In a lifetime, the average graduate can expect to earn about £160,000 more than the average nongraduate The average student graduates with £14,000 of debts, compared with £2,200 in 1994

- Average starting salaries range from £14,107 for someone from Trinity College, Carmarthen, to £27,755 for an LSE graduate

Times Recommends

• Third of Muslim students back killings
• Curfew tames feral yobs of Cornwall
• £3,000-a-month drug free abroad