Top-up fees could make the task of raising credit more difficult for some English universities, widening the gap between rich and poor institutions, according to analysts Standard & Poor's.
Institutions that experience a drop in student applications after the introduction of top-up fees in 2006 could find their financial viability hit, with a knock-on effect on their credit ratings and their ability to borrow money.
According to Standard & Poor's' Public Finance Report Card: Global Higher Education , student numbers are not likely to be affected at more prestigious institutions, as these enjoy greater financial flexibility and have greater research income.
But the report says that applications to "less competitive" institutions could be affected and that these institutions may enjoy less financial flexibility. "This may further widen the credit perspective within the sector."
Standard & Poor's gives credit ratings to five English universities.
Nottingham University has been upgraded from an AA-stable rating to an AA-positive. The switch to a positive rating means Standard & Poor's believes the institution's rating will rise again in the next two to three years.
Nottingham's rating rise was due in part to its "forward-looking debt and demand profile" and to an expectation that it could further improve its research status. An AA rating signals a very strong capacity to meet financial commitments and falls just short of the highest AAA rating.
Bristol University is given an AA-stable rating. Its long-term debt has increased to £72 million to finance capital investments, but the agency expects that net debt will fall after cash-generation operations and substantial land sales.
King's College London has an AA-stable rating. Debt levels at the college are expected to remain stable and the debt-to-income ratio should fall. But the agency warns that a high-cost structure could make financial targets more difficult to reach in future.
Sheffield University's AA-stable rating demonstrates a "strong and stable" financial position.
Lancaster University's rating has risen to A-positive, implying the potential for a further rise. The university is said to be enhancing its research base and developing a £103 million off-balance-sheet student accommodation project that should boost the recruitment of international students.
Ratings are more prevalent in the US, where raising credit for developments has been established for years.