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The University has suffered a huge cut in funding from the Higher Education Funding Council for England (HEFCE), but has fared better than many other institutions, including several Russell Group members.
However, recent expansion leading to a £127m net debt means the University could be left in a difficult financial position with this added pressure.
York's initial recurrent grant for 2013-14 has been put at just over £44m. This compares to £51m for 2012-13, a 14.7 per cent cut.
Although the figure is slightly higher across the sector it is newer universities that have been hit the hardest. The total grant for all higher education institutions fell 17 per cent to £4.47bn, while some universities were hit with cuts as high as 40 per cent.
However it is York's funding for teaching which has suffered the most and could be of particular concern. This has nosedived 28.8 per cent from £23m in 2012-13 to £16m in 2012-13.
Research funding fell slightly from £25m to £24m, a three per cent decrease.
Nouse reported earlier in the year that the University was relying more on fees as debt increased.
This combined with a higher gearing ratio, a measure of the University's dependence on borrowed money, means this latest announcement could make the financial situation even tighter.
YUSU President Kallum Taylor commented on the funding cut, saying, "Nobody should be surprised with the government's frightening slaying of funding for Universities; we're seeing cuts right across the public sector.
"However, Higher Education should have been one of the exceptions to the rule. Now, we face the very harsh reality of an incredibly risky experiment with people's futures, and the UK's long term intellectual capital."
He added that the University now needed to focus on what is best for students. "It's wholly imperative now that our University here at York list their priorities wisely, and do everything they can in placing a top-class student & learning experience at the top of that list. This is what the best prospective students of the future will see, hear and value - and as other institutions fall by the way-side we have to do what we can to stand out.
"The near 30 per cent cut to York's teaching grant is absolutely criminal given £9k fees. The University will have to be more creative, and perhaps more compromising, than ever in winning and generating private income... Whether it fits our politics or not, the main thing is that our students do not lose out during their time here, and have stronger prospects than most once they leave here."
A spokesperson for the University stressed that York was prepared for the cut in funding.
"We welcome the announcement by HEFCE of its initial allocation of grant funding for 2013-14. The total allocation of £44m is in line with our expectations and will support teaching and research and the aspirations of our academic departments, staff and students.
"As expected, HEFCE grant has fallen from the previous year's allocation of £51.5m, which reflects the gradual change in teaching funding from grant support to tuition fees across the sector."
Other universities suffered similar cuts to teaching, particularly the Russell Group. Durham saw a 24 per cent cut to teaching funding and a 17.5 per cent cut overall, while Bath suffered a 29 per cent drop in teaching income and 17 per cent overall.
Warwick suffered a 24 per cent cut to teaching funding but only an 11 per cent reduction for overall funding while Exeter received a big cut of 31.7 per cent for teaching funding and 19 per cent overall.
Imperial College London was one of the comparative winners, only losing 10.7 per cent of teaching funding and a four per cent drop overall.
Leeds saw a 14.7 per cent cut in teaching funding but only 13.5 per cent overall while Lancaster suffered a 33 per cent cut to teaching funding and a 15 per cent cut to funding overall.
Oxbridge also suffered cuts to teaching but held up over all with high research funding. Oxford saw a 22 per cent cut to teaching, while Cambridge suffered a 21 per cent drop, and overall they lost four per cent and 4.7 per cent of funding respectively.