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With the stress of A levels a distant history, students have little time to revel in relief as they face a brutal reality check – their dreams of heading out to university this year could most likely be shattered as one of the unforeseen casualties of the current economic downturn and the recent changes in local government organisation has been the lack of placements for those students who do a placement year.

UK A level students are part of the record shattering figures as they are being turned down from the country's leading universities, as institutions declared themselves full more than a week before the clearing system, which allocates last-minute places, opened. More than a quarter of students who applied to university to date still have not secured a place and hope seems bleak as vacancies are vanishing into thin air. The university admissions service, UCAS, said 187,488 applicants were still in clearing, the process which matches students who missed their offers or applied late for unfilled places on degree courses. That is almost 28% of the 675,465 students who applied for undergraduate courses this autumn. The figures also show that over 46,000 more students still have no place at university this year compared to the same time last year when there were 141,130 students in clearing. There are thought to be only 18,000 courses with vacancies compared with 32,000 in 2009, and at a number of universities many of the places are reserved for foreign students. Many courses are now only available to overseas students, some of whom pay £20,000 for undergraduate degrees.

Mary Curnock Cook, chief executive of the University and Colleges Admissions Service said a "very large number" – up to 60,000 – were deciding not to go to university this autumn and may re-apply next year. Some 8,395 students have so far opted out of the system, Ucas said, compared with 6,834 last year.

If Birmingham, Bristol, Edinburgh, Oxford and Cambridge and Warwick were on your list, its about time to cross them out as they are few of the many universities that have declared that they have no places left on any of their courses. The London School of Economics and St Andrews said they would have to turn down students who narrowly missed the offers they received from other universities.

Manchester University says it would have 50 places in clearing, but those in humanities would need to be straight-A students.

Nottingham has declared it has under half the number of places in clearing it had last year – below 50. "Tough competition means we will be turning away some very highly qualified students with two As and a B rather than three As," a spokeswoman said.

Many students who did not shine in their GCSEs are discriminated against by universities, who use the exams to short list candidates for degree courses. Martin Stephen, the head of St Paul's school, west London, said: "The A* is being used as a crude, preliminary filter which is hugely regrettable because it simply discriminates against the late developer."

A spokesman for Universities Scotland said: "Those who applied in advance and achieved their entry qualifications have nothing to worry about. But those who didn't get their results are going to find it one of the toughest years ever.

"Universities do not like to turn away qualified candidates but once full there is nothing they can do."

Universities have also been overly cautious about taking on too many students; for the first time this year 60 universities and further education colleges had a run in with law for over-recruiting 4,235 students and were penalised £15.67m.

The Labour government planned to provide 20,000 places for this autumn but this number was halved when the new administration came into power. The universities minister, David Willetts, has said that sixth formers who fail to secure a university place should start a business or apply for an apprenticeship instead. Pat McFadden, Labour's shadow skills secretary, said cutting the number of university places reduced opportunities for people to improve their skills. "This is very short sighted," he said.

"It is anticipated that the clearing process for this summer will be briefer and tighter than in previous years. However, universities are very experienced in handling high numbers of applications and they have been preparing for this peak time for many months now along with UCAS."