Applications to British universities are up 6.4 per cent this year, despite the introduction of top-up fees.
Figures released today by university applications service Ucas show 395,307 people applied to enter higher education in 2007, some 23,624 more than in 2006.
"These figures are encouraging for all who believe the expansion of higher education is good for individuals and good for our society," said Ucas chief executive Anthony McClaran.
"Not only has last year's dip in applications been reversed, but application levels are now higher than in 2005 which had previously broken all records."
Education minister Bill Rammell expressed his "delight" at the figures, which he claimed proved the opposition to tuition fees was misguided.
"These highest ever figures show that tuition fees are not putting students off applying to university as many predicted. The critics of the new system are being proved emphatically wrong," he said.
"It seems ... our young people continue to appreciate the value of higher education, and given the scale of global competition it is critical for the economy that more people get a graduate level education. Going to university is the best investment young people can make."
However, the Liberal Democrats were less convinced.
"The fact that more people are going to university is really good news, but the government must be careful not to take false comfort in these early figures," said Lib Dem higher education spokesman Stephen Williams.
"Ministers must not assume this gives them the green light to increase fees yet further.
"We need a closer understanding of the demographic make up of these applicants before we can conclude that top up fees aren't deterring young people from poorer backgrounds."
He pointed out we are yet to see the new wave of students graduate with higher debt levels than ever and there are still "serious questions" over how increased costs are impacting on the subjects chosen by students.
"It would be tragic if subjects valued for centuries, like archaeology and astronomy, fall by the wayside because they are not deemed economically attractive now that huge fees are required," Mr Williams said.