Two teenagers are seeking a judicial review into the government's decision to allow university tuition fees to almost treble to up to £9,000 from next year.
Public Interest Lawyers, which specialises in human rights cases, is representing Callum Hurley, 16, from Peterborough, and Katy Moore, 17, from London.
The pair claim minsters broke the law in the way in which they decided to raise fees from £3,375 a year this autumn to up to £9,000 next autumn.
They believe the increase penalises students from poorer homes and from ethnic minorities, who are disproportionately from lower-income homes.
Their lawyer, Phil Shiner, argues that the fee rise is a breach of Article 14 of the European convention on human rights and said the government had failed to fully assess whether higher fees would comply with equality legislation. The case is being paid for through legal aid.
The government has said that clever students from low-income homes will be eligible for up to two years of free university tuition under a £150m scholarship scheme. Government guidance will demand that universities improve their performance in attracting a wider mix of students, including ethnic minorities, people with disabilities and teenagers from areas with no tradition of going on to higher education.
However, Hurley claimed the fee increase risked "the future of our country and its ability to produce professionals so vitally needed in our economy". Moore said she was being forced to decide whether a degree was "worth being in such large debt".
Shiner said: "The government has rushed these changes through parliament in the wake of the 2010 spending review without pausing for real thought, analysis or consultation on the likely significant impact of the coalition policy. It is disgraceful and our clients seek to challenge its lawfulness."
The application for a judicial review will be lodged in the high court in March.
The action comes as Demos warns that the number of unemployed 16- to 24-year-olds is likely to grow to 1.2m over the next five years. In 2009 the number of school-leavers not in education, work or training – neets – topped a million.
In a study to be published in the next few weeks, the thinktank argues that some qualifications harm young people's chances of securing a job. National Vocational Qualifications at levels one and two, which are equivalent to GCSEs, do nothing to protect young people against unemployment, the thinktank has found.
National insurance contributions for under-25s should either be waived or reduced to encourage more young people into work, it says.
The Office for National Statistics will shortly publish the number of UK neets between October and December last year. Unemployment figures published last week showed that 965,000 16- to 24-year-olds are unemployed, the highest since records began in 1992.
Demos warned that while the norm for youth unemployment in the 1990s was between 10% and 15%, the recession and failures in the education system have made 20% the new norm.
Jonathan Birdwell, author of the thinktank's study – The Forgotten Half – said the UK had a shortage of jobs for young people, adding that "young people who spend long periods unemployed at the beginning of their careers work less and earn less throughout their working lives".
Meanwhile, Labour's shadow universities minister, Gareth Thomas, has said the government may be forced to cut student places and research grants because it has "significantly under-estimated" how much institutions will charge in tuition fees.
The government pays students' tuition fees in the first instance and students pay the government back when they graduate and earn £21,000 a year or more. Ministers predicted that, on average, universities would charge £7,500. If this is too modest an estimate, the government will have higher up-front costs and will be forced to cut other areas of the higher education budget, Thomas said.
The Guardian, Jessica Shepherd, 24 February 2011