The education secretary has pulled student loan funding from the private Oxford Business College over concerns about admissions practices.
Bridget Phillipson said the "management of recruitment and attendance" at Oxford Business College, which is not a university itself but offers courses from some English universities, had "fallen well short".
She said she wanted to "stamp out any abuse of the student support system", amid allegations that people are claiming millions of pounds in student loans without planning to study.
Oxford Business College said there had been "no findings of malfeasance" and it would challenge the decision, which it said was "unlawful".
In a written ministerial statement, Phillipson said she became aware last year of "credible concerns about the recruitment and attendance of students" at the college and commissioned an investigation by the Government Internal Audit Agency.
She wrote: "It is clear to me that the management of recruitment and attendance at the college has fallen well short of the standards I am entitled to expect; this is unfair on those students who have genuinely wished to study.
"In particular, the investigation has not been able to provide me with assurance that students' prior attainment, including their competence in the English language, has been adequately assessed, or that their attendance on their courses has been adequately monitored."
She said the college had been told new students on its courses would not be eligible for student support with immediate effect.
Oxford Business College said: "The Department for Education's lengthy investigation into Oxford Business College (OBC) concluded with no findings of malfeasance.
"Despite this clear outcome, the DfE has indicated that courses will be de-designated as of September 2025 – a decision OBC firmly believes is unlawful and will challenge through judicial review.
"Safeguarding our students' interests remains our absolute priority."
