A brother and sister are seeking a judicial review of tuition fee and student loans regulations. In a test case, Lucy Knight, 20, and her brother Christopher, 19, argue that there is no reason why their education funding should suffer because of their parents' bankruptcy.
In the High Court this week Mr Justice Dyson said he was "naturally sympathetic" to their plight and would be asking for an explanation from the Department for Education and Employment.
The students' lawyers are attacking as "irrational and perverse" government regulations that require parents Lynda and Denis Knight to make contributions they cannot afford.
They were declared bankrupt in April 1998 following the failure of Mr Knight's sports shop business in Eastleigh, Hampshire, where they live. Although Mrs Knight has a well-paid job as a barrister's clerk, the couple have pledged to pay all their surplus income to their trustee in bankruptcy so that their creditors would be paid.
But in August last year the local council said the couple would have to make a parental contribution of Pounds 1,325 to the cost of Lucy's degree course in mechanical engineering at Southampton University - Pounds 300 towards her upkeep and Pounds 1,025 tuition fees.
The council later assessed the same parental contribution in respect of Christopher, who began his seven-year architecture course at Portsmouth University last September.
The DFEE informed them that the payments they make to their trustee in bankruptcy would not be taken into account when assessing their parental contributions.
The family's counsel, Mr Richard Egleton, told Mr Justice Dyson: "Certainly there is nothing to stop a bankrupt going to university, why not the son of a bankrupt?"
He argued that interpretation of the 1998 Education (Mandatory Awards) Regulations amounted to a breach of Lucy and Christopher's right of "access to education" enshrined in the European Convention on Human Rights.
After a brief hearing, Mr Justice Dyson said he was "naturally sympathetic" to Lucy and Christopher's plight.
Adjourning the case for 21 days, the judge said it raised difficult and important issues to which the DFEE should be allowed to respond.
"I would like to hear what the secretary of state has to say to all this," he said.
Mrs Knight said later that her son and daughter were living at home to keep their costs to a minimum, but she still feared they might not be able to complete their higher education because of financial pressures.
"We feed them, but we can't given them any money. This case raises an important point of principle."