Students that fail to achieve three Ds at A-level will not qualify for a student loan to go to university under plans being developed by an independent review of higher education, it has been reported.

The review chaired by Philip Augar, a former investment banker, is also expected to recommend cutting the £9,250 annual tuition fee to between £6,500 and £7,500 a year, The Sunday Times reports.

According to the newspaper, under proposals to be published in the new year, teenagers with lower than three D grades would no longer be eligible for student loans to cover the cost of a degree.

Instead an estimated 20,000 pupils with these grades, or their equivalent, would be offered loans for cheaper vocational courses in further education colleges.

University leaders criticised the proposals. Alistair Jarvis, the chief executive of Universities UK, said: “What kind of message are we sending to thousands of students sitting their GCSEs next summer — that the transformative experience which university provides is not available to them?"

The news follows data published by Ucas this week, which provided further evidence of a "buyer's market" in university admissions.

The likelihood of students being accepted with lower A-level grades has grown, with more than 80 per cent of applicants holding A-level points equivalent to DDD accepted to university in 2018.

In 2017 fewer than 80 per cent of applicants with this number of points were accepted, and in 2013 fewer than 75 per cent were.

Data published by Ucas at the end of November also showed that more than a third of 18-year-olds applying to university in 2018 received a form of unconditional offer before completing their qualifications.

The Department for Education declined to comment on “speculation” about the higher education review.