Colleges fear they will lose out on millions of pounds in funding under plans for a shake-up of the student visa system, announced this week by immigration minister Damian Green.

Proposals unveiled at the launch of a public consultation included tougher English language requirements for applicants, a ban on students taking part-time jobs during the week, and an end to students being allowed to stay in the UK and look for employment after finishing their courses.

The Home Office announced that student visas would be “largely” restricted to university and school-based qualifications.

Of the 273,402 student visas granted in 2009, about 112,000 - 41 per cent of the total - were for below degree-level qualifications.

Under the new proposals, only “highly-trusted sponsors” in the FE sector with a “proven track record of student retention and compliance” would be allowed to offer places to students from overseas, in a move to tackle “bogus colleges” which claim to offer qualifications in order to help non- EU residents obtain UK visas.

Research from the British Council revealed FE colleges in England received pound;42 million in tuition fees from their 66,500 international students in 200809.

The proposals have come under fire from Catherine Vines, director of international business and enterprise at Ealing, Hammersmith and West London College, which has 2,500 international students on its books - more than any other UK college - from more than 100 different countries.

”(The proposals) have funding implications, but fundamentally it’s about students’ entitlement to education,” she said.

“We are now telling the world `Britain doesn’t want you to come to study vocational courses’.

“At our health and social care department, we have students from Taiwan, Burma and South Africa who cannot get the same education in their own countries, and who have brought great experiences for our students in inner-city London.

“We have invested a lot of time and money in our international work. All of that will be taken away.”

She also expressed concern that students would not be able to take up part-time work off campus during the week, adding: “How are they supposed to pay their fees?”

John Mountford, the Association of Colleges’ international director, said about 140 colleges had not even applied for highly trusted sponsor status, so would not be able to accept non-EU students.

“The income we gain from international students and the cultural benefits they bring to our campuses are enormous,” he said. “To lose that would be devastating to the sector.”

But Mr Mountford welcomed the plans to ensure all providers met minimum standards for monitoring their students.

Mr Green said: “I believe attracting talented students from abroad is vital to the UK, but we must be more selective about who can come here and how long they can stay . Too many students coming to study at below degree level have been coming here to live and work, rather than studying. We need to stop this abuse.”

Sarah Mulley, associate director of the Institute for Public Policy Research, said international students “contribute a huge amount to the UK education sector and to the wider economy”.

The consultation ends on Monday 31 January 2011.

• Original headline: Student visa shake-up could affect funding, sector warns