University students will be asked to meet minimum entry standards to receive government loans in a move that will add to pressure to ease graduate repayments, under new plans being considered by the UK government.
Ministers will lay out plans within weeks to limit access to student loans as the government seeks to deal with concerns about proliferation of underqualified students on poor-quality courses.
The focus will be English language skills, with ministers considering imposing a minimum of a GCSE pass in English to qualify for student loans.
However, they will also consult on a lower bar that would allow alternative English-language qualifications, according to people familiar with the plans.
Britain’s more established universities have become increasingly vocal about the need to restrict access to loans to free up funding for an increasingly financially stretched higher education system.
They have argued it is illogical to require five GCSEs to study A-levels while having a lower bar to start a degree.
Adam Tickell, vice-chancellor of the University of Birmingham, said it was “imperative that students are suitably qualified for their course”.
“The naive belief that everyone should have a right to funding for a degree serves no one: students accumulate debt without improving their life chances, the student loan book grows uncontrollably, and public cynicism about the value of our brilliant universities grows,” he added.
One in 12 undergraduates starting full-time courses last year had no formal qualifications, up from one in 62 a decade earlier, and six universities admitted the majority of their home students without A-levels, GCSEs or equivalents, according to FT analysis of official data.
The increase has largely been driven by the rise of for-profit franchise providers who recruit from migrant and minority communities with few formal qualifications.
These companies are likely to lobby against restricting access on the grounds it would deny opportunity to underprivileged groups ignored by traditional universities.
However, Libby Hackett, chief executive of the Russell Group of research-intensive universities, said considering minimum entry standards was needed “to make sure a university education delivers value for money for both students and taxpayers.”
This could help deal with the cost of higher education that is “disproportionately placed on individuals relative to government funding,” she added.
Currently, the student loan system, where government pays fees and maintenance costs upfront which graduates repay using a portion of their salary, is available to all students with UK residency accepted on to qualifying courses.
But as student numbers have risen, ministers have pushed more of the cost of education on to graduates, provoking a backlash over onerous repayment terms.
UK Prime Minister Andy Burnham used his speech to the Labour Party conference to acknowledge the complaints of graduates who were “trying to save but looking at a student loan which never gets any smaller”.
About 50,000 students started courses last year without qualifications. While savings dependent on future loan repayments are highly uncertain, if all were caught by the new policy it would save about £750mn a year.
Oliver Gardner, founder of the student loans campaign Rethink Repayment, said: “The government should use any savings that they find from such a policy to fix the broken and unfair student loan repayment system.”
“Millions of graduates are furious that despite acknowledging that the loans system is ripping off our generation, the government is showing no desire to fix it,” he added. “These savings would give them the perfect opportunity to do just that.”
The Department for Education confirmed it would look at “a range of options” for a minimum English language requirement to access student loans.