STUDENTS ARE to be offered insurance to cover tuition fees and loans if they drop out of university after failing their exams, falling ill or drinking too much rather than studying.

An insurance company is launching a policy for the new academic year to cushion parents and older students against the financial repercussions of abandoning a university place. The annual cost of an undergraduate year can be pounds 7,500 and the policy would cover repaying tuition fees and loans. The policy helps those who leave university through ill-health, exam failure, pregnancy or accidental injury, even students forced to quit because of criminal proceedings or alcohol or drug dependency. Those who leave because they have chosen the wrong course are not covered.

Details of the Saxon Insurance policy, Uni-shield, are in student packs sent out by the Universities and Colleges Admissions Service (Ucas). The policy, with premiums at pounds 13.50 per month, is offered to students over 25 and parents.

Brian Wright, Saxon Insurance's managing director, said: "Certain things we have put in, such as cover for pregnancy, prison sentences or exam failure, have frightened the underwriters to death."

Saxon plans to sell around 9,000 such policies after piloting a similar policy last year.

University lecturers yesterday told sixth-formers they "bitterly regretted" having to call an admissions boycott on Thursday and Friday to disrupt the annual rush for university places, which starts this week.

David Triesman, general secretary of the Association of University Teachers appealed to sixth-formers to press vice-chancellors and MPs for an end to their dispute over pay. In an open letter to students, Mr Triesman said: "It is not intended to prevent you from progressing with your education, although we know any delay will be inconvenient and may be distressing. We bitterly regret that after years of underpayment and months of unresolved dispute we have had to resort to action affecting university applicants."

University employers say their 3.5 per cent pay offer is the most institutions can afford. Academics want 10 per cent.

Exclusive official Ucas vacancy lists appear in The Independent on Thursday (August 19) and continue until mid-September.