Further education colleges will be offering cut-price degree courses for students when the new £9,000 a year fees regime comes into force next year.
A survey of more than 30 colleges which receive government funding to run degree courses shows the majority want to charge less than the £6,000 a year minimum fee suggested by the Government.
Of the 31 who replied, 19 said they would be charging less – while the rest would opt for between £6,000 and £9,000 a year.
The findings are likely to mean many youngsters will switch to doing their degree courses at colleges – rather than attend universities with a lower ranking than the elite in university leaguer tables.
Universities Secretary David Willetts is also keen to persuade the FE colleges to act as a franchise for better-known universities – offering students to chance to study at them while living at home but using course materials supplied to the college by elite universities.
Nick Davy, higher education policy manager at the Association of Colleges, said: “Many colleges teach higher education in areas without a university or where a university does not recruit locally.
“They are likely to have smaller class sizes and score well with students for time given over to tutorials.”
They frequently have lower overheads than universities because of the rang of courses the provide including GCSE, A-level and a range of vocational courses..
Mr Willetts and Business Secretary Vince Cable have praised the “distinctive value” and vocational emphasis of higher education provision in FE colleges.
Throughout the further education sector, over 260 colleges teach around 160,000 students on higher education courses. Less than half of these are funded by the Government's higher education funding watchdog, the Higher Education Funding Council for England. The rest operate through franchise agreements with partner universities.
“Most colleges have yet to declare their fee level but our study shows that most will want to charge under £6,000,” Mr Davy said.. “Traditionally college fees have been lower than universities.
“All this combined means that college higher education is an extremely attractive choice for young people. We would expect it to become even more so as students and parents place greater scrutiny on weighing up their options to see how they can keep debts to a minimum.”
The decision by colleges to undercut university fees (two out three universities have opted to go to the maximum fee of £9,000 a year) is the second attempt to offer reduced price courses for students in 24 hours.
Yesterday Mr Willetts announced the doubling of loans to students who studied through private education providers to £6,000 a year.
His announcement was immediately followed by announcements from private providers than they intended to charge £6,000 a year or less next year.
Mr Willetts saw the move as opening the gateway to more private sector provision of higher education courses.
However, university vice-chancellors warned an expansion offer-profit higher education could jeopardise the quality of courses on offer if they were not subject to the same checks on standards as state-funded provision.