A quarter of students entering higher education have not heard of bursaries and more than half feel poorly informed about how they work, according to the first major national study of their impact.
Research for the Office for Fair Access, published on 3 December, surveyed almost 5,000 full-time undergraduates in receipt of a full or partial grant, as well as universities, parents and higher education advisers in schools and colleges.
The report, Awareness, take-up and impact of institutional bursaries and scholarships in England, states that many of those surveyed are poorly informed about bursaries, and that students often look for information only when it is too late to influence their choices.
The net result is that 61 per cent of all students surveyed are unlikely to be influenced by bursaries in their study decisions.
"The overall success of bursaries has been limited by the lack of awareness, knowledge and understanding of bursaries on the part of many students, parents and higher education advisers," says the report by Claire Callender, professor of higher education policy at Birkbeck, University of London, who conducted the research with the National Institute of Economic and Social Research.
"Despite great efforts by universities and colleges to give students information, bursary messages are not always getting through," it says.
Students feel less informed about bursaries and scholarships than any other form of financial support, it adds. Black students are among the least likely to have heard of bursaries - almost a third have not - despite being the most likely to come from the poorest households.
Only two fifths of students say they looked for information on bursaries before submitting their Universities and Colleges Admissions Service application forms.
There are also significant gaps among advisers: one in ten had not heard of bursaries despite their key role in informing students about financial support. More than half of parents (55 per cent) and advisers (59 per cent), along with 40 per cent of students, believe that bursaries are "too complex".
There is also a widespread perception that receiving a scholarship is "stigmatising".
But the research suggests that there is considerable potential for bursaries and scholarships to have a greater impact on students' decisions. They are proving to be an effective recruitment tool for a significant minority of students, helping them to overcome financial barriers.
Nearly three out of ten students surveyed believe bursaries are important when deciding where to go to university, and a quarter of students who had heard of them report that the size of the award did influence their choices.
Importantly, bursaries had the biggest impact on the decisions of students anxious about the costs of higher education - some 37 per cent of students in this group think they are important.
Sir Martin Harris, director of Offa, said take-up of bursaries was expected to have reached 96 per cent or higher in 2008-09.
"The mechanisms of bursaries now seem to be working well," he said. "The question is whether every student thinks about bursaries soon enough and, if they do, whether they have clear, straightforward information early enough.
"It seems to me there is more work to be done here."