Pupils who fail their maths and English GCSEs will be banned from taking out student loans under new government plans.

Ministers will publish a series of new proposals this week, including the return of student number controls, aimed at limiting the huge cost of universities to the taxpayer and cracking down on low-quality degrees.

It marks the biggest shake-up to higher education funding in a decade and rows back on policies pioneered by New Labour and the coalition government, which sought to encourage as many students as possible to go to university.

The Department for Education will announce plans to set minimum entry requirements to ensure students “aren’t being pushed into higher education before they are ready”.

The proposals, which will be put to consultation, will suggest that students who fail to gain a Grade 4 – equivalent to a C in the previous grading system – in GCSE maths and English should be barred from accessing student loans.

Roughly a third of students fail their maths and English GCSEs each year.

Alternatively, this ban could be aimed at those who fail to achieve EE at A-level, although there would be exceptions to this rule for certain groups, such as mature students.

Ministers are also proposing to impose controls on student numbers “so that poor quality, low-cost courses aren’t incentivised to grow uncontrollably”.

It is likely that “low quality” will be defined as those with a high number of students dropping out and a low proportion getting a graduate job or entering further study once they have completed their degrees.

Student numbers have soared

The number of students at university used to be tightly controlled by the Government. But when tuition fees were tripled to £9,000 in 2012, the cap on numbers began to be lifted.

Within three years, it was lifted altogether. This meant that universities could recruit as many students as they saw fit and many began to expand aggressively.

But Whitehall officials are concerned at the cost to the taxpayer of the increasing numbers of university students who fail to earn enough to pay back their student loan.

Ministers have been particularly critical of so-called “Mickey Mouse” degrees, which saddle students with debt but add little to their job prospects. They have previously accused universities of running “threadbare” courses in a rush to get “bums on seats”.

On Thursday, the Government will publish its long-awaited official Augar review into higher education.

Led by Sir Philip Augar, the former equities broker, it is the first review since 1963 to be ordered by the Government into higher and further education.

The Education Secretary will announce a £900 million investment in subjects that support the NHS, such as medicine, dentistry, nursing and midwifery, as well as science and engineering degrees. It will be the largest single increase in university funding for 10 years.

The Lifelong Loan Entitlement will be formally launched, which adults can use to fund four years of flexible training or education.

University debts may never be repaid

Ministers believe that while university degrees benefit some students, others graduate saddled with debt that they will never be able to repay and will ultimately be picked up by the taxpayer.

Research by the Institute for Fiscal Studies showed that almost eight in 10 graduates will never pay back their full student loan under the current tuition fees system.

The think-tank found that arts graduates cost the taxpayer £35,000 each with degrees in “creative arts” subjects, which include music, drama, fine art and design studies – the most costly to the taxpayer, since so few alumni earn enough money to pay back their student loan in full.

Of the £9 billion that the Government spends on higher education each year, more than £1 billion is on creative arts courses alone. Three-quarters of the total amount dished out in loans is picked up by the taxpayer, the IFS report from 2019 found.