I agree. I'm at 4th level right now and I do not sign players for tokens. If it is free, I promptly sign a contract and sell it. At least you can use that money to bid the player that is better your youth.
More stars doesn't mean a player is automatically better, that's silly thinking... Shame I don't have stats saved to show you how Youth Academy token player (had 2 stars at that moment) plays twice better than his scout partner in defence through entire season...