Universities and colleges in the West Midlands could be stripped of millions of pounds in funding used to give students from poorer backgrounds a fair chance of getting a degree.
The cash is at risk because the Department for Business, Innovation and Skills, which is responsible for Higher Education, needs to make savings of £1.4 billion.
Currently, Birmingham City University receives £4 million each year, University College Birmingham receives £1.9 million, University of Birmingham receives £1.7 million, Birmingham Metropolitan College receives £372,000, South and City College Birmingham receives £169,000 and Bournville College of Further Education receives £28,000.
The money, known as Student Opportunity funding, is allocated to universities and higher education colleges which succeed in attracting students from neighbourhoods where few people have traditionally taken part in higher education.
It also goes to institutions which succeed in retaining students in danger of dropping out, and to those that recruit students with disabilities.
Danny Alexander, the Chief Secretary to the Treasury, is reported to be pushing for Student Opportunity funding to be abolished, while Business Secretary Vince Cable and Higher Education Minister David Willets are lobbying to keep it.
Asked to comment on the reports, The Department for Business, Innovation and Skills said in a statement: “The Department is going through the process of allocating budgets for 2014-15 and 2015-16 and will set out plans in the usual way.”