A number of post-1992 universities have been surprised by a last-minute clarification of the AAB policy that could deprive them of thousands of pounds of extra tuition fee income.

Institutions will not be able to recruit some applicants with high grades in BTEC courses outside their student number cap, according to guidance from the Higher Education Funding Council for England issued days before A-level results were announced on 16 August.

This year, universities and colleges can recruit an unlimited number of students with grades of AAB or higher at A level, or the equivalent in some other qualifications, as part of the coalition's attempt to stimulate competition in the sector.

Hefce said on 9 August that the grades of applicants who combined certain BTEC qualifications would not be accepted as equivalent to AAB at A level, and so they would count towards an institution's cap on undergraduate numbers.

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The head of one post-1992 university, who did not wish to be named, said this would deprive his institution of at least 10 students and cost it "well in excess of ?250,000" in tuition fees over three years.

Students from state schools and low-participation areas would be hit hardest because they are disproportionately likely to apply with BTECs, the vice-chancellor added.

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Under a system introduced in 2010, three types of BTEC are offered: extended diplomas, diplomas and subsidiary diplomas.

In terms of Universities and Colleges Admissions Service points, the extended diploma is equivalent to three A levels and will be accepted as equivalent to AAB at A level if a student earns at least three distinctions. A diploma is equivalent to two A levels, and a subsidiary diploma is equivalent to one. But a student who combines these smaller qualifications to achieve the same number of Ucas points as an extended diploma will not count as an AAB equivalent, according to Hefce's guidance.

Pam Tatlow, chief executive of the Million+ group of universities, called the move "clearly biased" against students who did not take A levels.

Million+ also argued that the guidance was "contrary to the advice received by some universities previously", and this claim was backed up by Janet Graham, director of the Supporting Professionalism in Admissions group, in an email to institutions.

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Hefce insisted that the guidance was a "clarification", not a change in policy, that would affect only a "fairly small" number of students.

A total of 10,802 students achieved a double distinction in a BTEC diploma in the year to 31 May and 16,008 got a distinction in the subsidiary diploma.

david.matthews@tsleducation.com.