University applications from UK students for the first year of higher tuition fees are down by 8.7%, according to figures from the admissions service.
With fees rising to up to £9,000 per year, the impact has been biggest for England's universities - down by 9.9%.
In Scotland, where Scottish students do not pay fees, there was a fall of 1.5%.
Universities UK said the "dip is far less dramatic than many were initially predicting".
Universities Minister David Willetts said school-leaver applications from the most disadvantaged areas had not been disproportionately affected by the fees increase - with a decline of only 0.2%
"It is encouraging that applications from people from some of the most disadvantaged backgrounds remain strong," said Mr Willetts.
But Sally Hunt, general secretary of the UCU lecturers' union, said the "figures are very worrying and once again highlight the government's folly in raising tuition fees to as much as £9,000 a year.
"Applications in England are down over 50% more than in any other part of the UK as a result of the government making it the most expensive country in the world in which to gain a public degree."
A breakdown of the UK figures show a 4% fall in applications in Northern Ireland and 1.9% in Wales.
The figures published by the Ucas admissions service show that by the 15 January deadline there were 462,507 applications for courses beginning in September.
This represented a 8.7% drop in applications from students in the UK - but an increase in overseas applications meant that the overall figure was 7.4% lower than at the same point last year.
Wendy Piatt, director general of the Russell Group of leading universities, says that the underlying longer-term trend remains an increase in demand for university places - with these latest figures considerably higher than three years ago.
"Despite all the hype, fee reforms are unlikely to cause a long-term decline in applications. In the past a fall in applications in the first year of higher fees has been followed by increases in subsequent years."
But the gap between men and women going to university looks set to widen. Women are already in a majority - and the application figures show a sharper fall among men than women.
When gender differences are combined with differences within the UK, wide variations are revealed.
Northern Ireland has a much higher rate of applications among 18 year olds - and it means that women in Northern Ireland are more than twice as likely to apply than men in Wales.
There is also a breakdown by age group - and this shows that among 18 year olds, across the UK, a decline of 3.6%, compared with last year, with greater drops in applications among older students.
National Union of Students president, Liam Burns, expressed concern about this "worrying drop in the number of those aged over 21 making applications".
"These are likely to be unemployed people looking to gain skills for work, those who had been shut out by student number controls, or those with a range of other financial commitments and pressures."
There had been much debate about whether students would be influenced by fee levels - and the private BPP University College, which charges £5,000 per year for a three-year course, is reporting that applications have more than doubled.
The Ucas figures include an analysis comparing applications from school leavers in the poorest and richest areas of England.
In the most disadvantaged areas, the steady increase of recent years has stopped, dipping by 0.2%.
But in the wealthiest areas, where youngsters are more than three times as likely to apply, there has been a bigger fall, down by 2.5%.
Ucas chief executive, Mary Curnock Cook, said: "Widely expressed concerns about recent changes in higher education funding arrangements having a disproportionate effect on more disadvantaged groups are not borne out by these data."
Labour's higher education spokeswoman, Shabana Mahmood, said the increase in fees and the drop in applications showed "how out of touch ministers have become from the needs and aspirations of families up and down the country".
The 1994 Group of research intensive universities said that figures showed that some UK students "have obviously been wary of applying this year".
The group's chairman, Professor Michael Farthing, said "the uncertainty caused by the government's haphazard approach to reform has not helped".
Nick Davy, higher education policy manager at the Association of Colleges, said: "We are concerned by the drop in student applications, particularly at a time of record levels of unemployment among young people."
There have also been signs of an increase in UK students applying overseas.
Maastricht University in the Netherlands, where fees are £1,500 per year, is reporting a surge in applications.
The university is forecasting that they will receive 600 applications from UK students during the current admissions cycle.