If we don't substitute anything, we get the sentence from your title:
Nonetheless, university students would have to choose study over work, especially if they are undertaking a degree in theoretical subjects.
I think that substituting "will" for "would" is the correct answer in this case:
Nonetheless, university students will have to choose study over work, especially if they are undertaking a degree in theoretical subjects.
If we ignore the second half of the sentence, it is saying "Students will have to choose to study instead of working". I would use "would" if there were a hypothetical situation. I will use "will", especially if the situation is not hypothetical. The last sentence isn't idiomatic - I just constructed it to help make my point. The "especially if" changes the final clause from a hypothetical situation to a condition that makes it even more likely that I will have to do it.
You would have to study more if you were undertaking a degree in a theoretical subject.
You will have to study more for your doctorate, especially if you are undertaking a degree in a theoretical subject.
I wish I could explain a little better why "especially" makes a difference here, but it is something I know intuitively. I will think about it some more and maybe someone else will offer a suggestion on how to make it more clear.
I don't really like "a degree in theoretical subjects". I would say "a degree that involves theoretical subjects", but I don't know that it is obviously incorrect. We say "a degree in economics" or "a degree in psychology", so when I read "a degree in theoretical subjects" it sounds like the entire course of study is about the nature of "theoretical subjects" and not composed of subjects that are theoretical in nature.
This is more about a strategy for answering test questions than English, but I think it might be helpful... You might be able to make a correct sentence by changing more than one part of the sentence in the question, but for these sorts of questions you should focus on the one thing you can change. If you change one thing and the sentence is obviously incorrect, you can remove that option from your choices. For this question, you only need to look at 4 sentences and then try to decide which one is the correct one.