The Scottish Government has launched a green paper on post-16 education, confirming its promise of a place in education or training for every 16 to 19-year-old in Scotland. It also outlines plans to force universities to widen access and ease progression between schools, colleges and universities.
The plans could see the number of colleges reduced, while universities will be expected to collaborate more closely and consider mergers where it makes "educational and financial sense".
The Government paper Putting Learners in the Centre, also unveils plans to reform the careers service.
Mr Russell said he planned to legislate to ensure fairer access to higher education and introduce tougher measures, including financial penalties, to ensure young people from disadvantaged backgrounds got the chance to study at university. Student support will be strengthened by introducing a minimum income of pound;7,000 per annum for the lowest-income students.
To meet the economic challenges Scotland faced, employers had to be more closely involved, and skills development prioritised in key sectors, he said.
But changes also had to be made to the delivery of post-16 education to ensure this was done efficiently and effectively, said the Education Secretary. The college sector's structure dating back to 1993, when it was reformed under Thatcherite policy to introduce greater competition between institutions, had in some cases "led to wasteful duplication". He wanted to see regional groupings of colleges emerge, as well as changes to the college funding model, which was complex and lacked transparency. Governance arrangements at colleges also had to be reviewed.
He recognised universities' role in growing the economy through training and contributing research, but this also meant the Government had to focus its investment on excellence and closer alignment with national priorities.
"This Government spends close to pound;2 billion each year on post-16 education. We therefore have a duty - to learners, employers and taxpayers - to give them every confidence that public funds are being invested wisely and are delivering teaching and learning of the highest possible quality," Mr Russell said.
John Spencer, convener of Scotland's Colleges' Principals' Convention, said his "very real concern" in the Government's direction of travel was that it appeared to be seeking efficiencies "in having fewer colleges, but delivering the same teaching activity to the same numbers of learners".
"Our priority will be delivering quality education for learners, and we will want to ensure that reform does not have a negative impact on the learner experience or distract colleges from delivery," he said.
Alastair Sim, director of Universities Scotland, said universities would not look to "duck difficult questions".
Students would be delighted by the focus on improving student support and making access to education fairer, said Robin Parker, president of NUS Scotland.