The Government's plan to save £100 million by cutting funding for students studying for second degrees faces the "intrinsic" risk that university applicants will simply fail to declare their past qualifications.
Board papers released by the Higher Education Funding Council for England indicated that there is no certain way of checking students' claims about whether they have taken higher education qualifications before 1996 or have studied overseas.
The Government announced its controversial decision last autumn to cut funding to students studying for higher education qualifications equivalent to, or at a lower level than, those they already held.
Universities have warned that they could be forced to raise fees to more than £7,000 a year for ELQ students, £4,000 more than for first-time students.
Last month, Bill Rammell, the Higher Education Minister, told the Innovation, Universities and Skills Committee there would need to be "a random checking process" and, in some cases, universities may need to check with previous employers and education establishments.
David Eastwood, chief executive of Hefce, told the committee that there would probably need to be "some additional dipstick-type checking mechanism in order to have a robust audit process".
Now a Hefce board paper says that "there is little at present that we can do to mitigate this risk", which the funding council believes is "intrinsic to the ELQ policy".
It adds that "many institutions" feel that the Government's policy will lead students to report their qualifications inaccurately. In the long term, Hefce says that there may be "limited means" to share with universities the data from historic academic records for the purpose of checking students' claims. However, the earliest data held go back only to 1995-96.
"Neither would we be able to check study undertaken at institutions that do not make returns to the Higher Education Statistics Agency or the ILR (Individualised Learner Record), such as institutions outside the UK," it adds. A Hefce spokeswoman said it would issue guidance to universities shortly.
The Hefce document, which reports the outcome of the funding council's consultation into how it should implement the cuts, describes "a great deal of opposition" to the Government's policy among the 312 responses, as well as "resentment" that the decision to make the cuts was not subject to consultation.
It says: "It is likely that if we had explicitly asked whether respondents agreed that we should remove funding for ELQs, we would have received a negative response."
Meanwhile minutes from a meeting of Hefce's audit committee say: "The board complimented the professional and measured treatment by Hefce staff of some hostile responses."
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