With a good set of A-level results behind her, higher education seemed the obvious step for 18-year-old Sarah Holmes, but nervousness about student debt stopped her from applying to university. When a careers adviser told her she could study for a degree at her local college, she jumped at the chance. Three years on, she has just completed a BA (Hons) in business administration and management at St Helens College, and is now busy applying for graduate training schemes.

Holmes is one of a growing number of higher education studentschoosing college instead of university. Of the 353 colleges in England, 270 now offer higher education courses, representing around 178,000 (around 10 of all higher education students.

Degree-level courses delivered at colleges are usually funded through franchises and partnerships with universities. Many now offer two-year foundation degrees (FdA), which combine academic study with skills needed for the workplace, and can be «topped up» to a full degree with a third year of study at a university. An increasing number of colleges can deliver this «top-up» year themselves.

Other options include the higher national certificate (HNC) and higher national diploma (HND) – equivalent to the first and second years of university courses, respectively – which, with additional study, can also be turned into degrees later on.

One of the biggest benefits of choosing college over university can be cost. According to Pat Bacon, president of the Association of Colleges (AoC) and principal of St Helens College, tuition fees for degree courses are usually lower (around £2,000 a year, which compares favourably with universities, which can charge up to £3,225). «This makes them more affordable for students concerned about incurring debt,» she says.

This has certainly proved true for Holmes, who estimates her total debt at around £13,500. According to the latest Push Student Survey, the average student debt is now around £23,000. Like many students who choose to study at their local college, she lived at home with her parents, saving thousands of pounds on accommodation and living costs. She was also able to hold down a regular part-time job, which can be difficult for students at campus-based universities, many of whom live at home outside of term time.

But choosing college over university is not always just about saving cash; it can also be about value for money. Class sizes are typically smaller, lecturers may take a more «hands-on» approach to teaching and learning, and there are more opportunities for one-to-one support. «We have an open-door policy,» say Mike Franco, senior tutor for higher education at St Helens College. «So if a student is 'stuck' on something or feel they are not doing so well in a particular area, we can provide the individual support they need. We can also show them exactly what they need to do to improve. I'm not sure how many students get that quality of teaching and learning in a typical university environment.»

It was this that prompted 20-year-old Savannah Bailey, who is currently doing an FdA in fashion interpretation and practice at New College Nottingham, to study at her local college rather than go away to university. At 18, she didn't «feel old enough» to go to university.

«I did go and have a look at a few universities, but I knew there would be much bigger groups than at college, so I wouldn't get as much one-to-one help,» she says. «My tutors all have hands-on experience in the business. I didn't see what else I'd be getting at university.»

Mike Tanner was just 17 when he finished college and also didn't feel ready to move away to university. He opted for an FdA at City of Bristol College, where he had successfully completed a BTec national diploma in graphic design. «There are just 15 in my class, and I knew most of the tutors already so it hasn't felt like such a step up to degree level,» he says.

Living at home with his parents and working 16 hours a week stacking shelves at a local wholesalers has allowed Tanner to keep afloat financially. Once he has completed the FdA, he is planning to top up his qualification to a degree with a year's study at Plymouth University. He estimates his total student debt will be just £7,000 for three years' study.

Holmes believes that the small classes and quality of teaching she received at college have boosted her achievement. «I got two Cs and a D in my A-levels, so didn't really consider myself a high-flyer. I started off getting 2:2s in the first year of the course. I got mainly 2:1s in my second year. In my final year I got 2:1s and firsts. I feel fairly confident of a 2:1 and hope I might have a chance of getting a first overall. I don't think I'd have come this far without the constant support and feedback I got from my tutors.»

«A lot of it is about confidence and motivation,» says Franco. «We get to know all our students, and give them one-to-one support where we can, which is reflected in their results. We retain a high proportion of our students and do as well as, if not better than, local universities, particularly where it comes to the highest grades.»

What colleges also offer students is much greater flexibility, says Shane Chowen, vice-president (FE) of the National Union of Students. «I'm a big fan of higher education at FE colleges because it's flexible and offers value for money, which is vital in the current climate. There are lots of part-time opportunities or shorter qualifications, like the FdA, that can be topped up at a later time. There is also greater flexibility in terms of entry requirements, which often take into account relevant professional or work experience, which is important for widening participation in higher education.»

But critics might argue that while higher education students at colleges benefit from smaller classes and more «hands-on» teaching, they miss out on being around lecturers who are actively involved in research, being published in journals or writing books.

But, as Sedgemore points out, this can have its drawbacks. Teaching can be far lower down the list of priorities for academics than research, while in further education «students are it». FE colleges are well positioned to offer smaller classes and lower tuition fees because staff typically have much more contact time with students, she says.

If the «cap» on tuition fees is lifted (which, along with higher interest rates for student loans, has been enthusiastically recommended by the Russell Group of universities) interest in higher education at colleges could be set to grow. But how do employers view college graduates in comparison with those who have studied at university?

Franco says that a degree delivered at a college is validated by a «partner» university, so employers should see it on a par with other education providers. He points out that recent graduates from St Helens have moved on to master's degree programmes and into teaching. One beat off stiff competition to win a place on the Tesco graduate scheme. «If a prospective student asks me how I think employers will view the fact they've chosen college over university, I ask them whether the prestige of an institution or class of degree is more important to them. They usually say the latter. The FE approach to higher education gives students the very best chance of achieving their potential, which is what really counts.»