Students who already hold a degree will not count towards Government-imposed recruitment limits from 2010-11, the funding council has announced.
Currently, students aiming for an equivalent or lower qualification (ELQ) to one they already hold are not subsidised by the state and are not eligible for public student loans.
However, they are included in limits set by the Higher Education Funding Council for England on the number of UK-domiciled students each university is allowed to recruit. Hefce has threatened to fine universities that take on more students in 2010-11 than they accepted in 2009-10 and 2008-09.
From the next academic year, however, ELQ students will not be included in these limits unless they are exempt from ELQ policy and receive Hefce funding. Areas that are exempt include teacher training, social work, architecture and veterinary science.
It has also emerged that following the change in policy, university places currently taken up by ELQ students will not become available for additional funded students.
It is feared that this could penalise universities that recruited large numbers of ELQ students in 2008-09 by offering them discounts, as they will not be able to transfer these places to funded students.
A Hefce spokesman said: “Universities have argued that we should not be controlling ELQ because they are not funded and are not eligible for student support.
“They can’t have it both ways, but they will be able to appeal against the number [of student places] that we are about to set them.”
Les Ebdon, vice-chancellor of the University of Bedfordshire and chairman of the Million+ group of new universities, said that the numbers had already been removed from the allocations in September 2008 after the ELQ policy was introduced.
Institutions were told they would be able to bid for additional student numbers for first-time applicants in the ELQ students’ place, but then the Government identified a hole in its budget and recruitment limits were imposed.
Professor Ebdon acknowledged that ELQ students were a new source of fully funded applicants, “like home-based international students”, but he predicted that the universities most likely to benefit would be those that are already relatively well off.
“I imagine that the universities of Oxford and Cambridge will be able to attract the most ELQ students paying full fees,” he said.
Under Hefce’s new policy, students who start doing a foundation degree at one institution and apply to join a different university in the second or third year of a degree course will be counted as “new entrants” for the purposes of the recruitment limits.
Some universities have complained that this will act as a disincentive to set up access arrangements through which students automatically progress from further education colleges into university.