Teenagers who obtain lower A-level grades after being given unconditional university offers are more likely to drop out of degree courses, the regulator has warned.

Students who accept an offer of a degree place regardless of their exam grades can underachieve at A-level – and this can lead to higher university dropout rates, the Office for Students (OfS) suggests.

The watchdog has warned that it is “becoming increasingly clear” that unconditional offers – especially those with conditions attached – can have a negative impact on students when they make key decisions.

It comes as the latest figures from the OfS show that two in five (39.5%) 18-year-old university applicants from England received at least one offer with an unconditional component last year.

More than a quarter (26.8%) of these applicants also received at least one “conditional unconditional” offer in 2019, according to the watchdog’s analysis.

“Conditional unconditional” offers – which have been banned until September 2021 – give students a place regardless of their exam grades on the condition that they make a university their firm first choice.

School leaders have warned that unconditional offers, which they argue can lead to students becoming “disengaged” with their studies, are being used as a way of “getting bums on seats” by universities.

The OfS analysis finds that – even after controlling for a range of characteristics associated with dropout rates – A-level entrants who accepted an unconditional offer in 2017/18 had a continuation rate between 0.4 and 1.1 percentage points lower than would have been expected had they taken up a conditional offer instead.

This equates to between 70 and 175 of the 15,725 A-level entrants placed through unconditional offers that year, who would have continued with their studies if they had been placed through a conditional offer, the report says.

It comes after an analysis from Ucas in December found that applicants holding a firm unconditional offer were, on average, 11.5 percentage points more likely to miss their A-level predicted grades by three or more grades than if they had received a conditional offer.

“If holding a firm unconditional offer is associated with lower A-level attainment, relative to predicted grades, as this research suggests, this could then have a negative impact on the continuation rates of entrants placed through unconditional offers,” the OfS report says.

But the analysis finds that the continuation rates for BTEC students in 2017/18 who were placed through an unconditional offer were usually higher than those placed through conditional offers.

Unconditional offers can lead to students underachieving compared to their predicted A-level grades, choosing a university and course that may be suboptimal for them, and ultimately being at increased risk of dropping out entirely

Nicola Dandridge, chief executive of the OfS, said: “It is becoming increasingly clear that unconditional offers can have a negative impact on students.

“Unconditional offers can lead to students underachieving compared to their predicted A-level grades, choosing a university and course that may be suboptimal for them, and ultimately being at increased risk of dropping out entirely.

“Dropout rates are overall low in England, so this is a small effect. But we remain concerned that unconditional offers – particularly those with conditions attached – can pressure students into making decisions that may not be in their best interests, and reduce their choices.”

Geoff Barton, general secretary of the Association of School and College Leaders (ASCL), said: “We have long warned that certain types of unconditional offer are not in the best interests of young people and this report provides yet more evidence.

“One of the clear problems with unconditional offers is that they can encourage students to undertake university courses which are not the best choice for them, and this leads to them becoming disengaged with their studies and ultimately dropping out.

“The problem is that unconditional offers are used as a way of getting bums on seats in a fiercely competitive environment between universities.”

Alistair Jarvis, chief executive of Universities UK (UUK), said: “It is an important principle for universities to be able to decide independently which students they accept when factoring all of this in; but alongside that comes a responsibility to explain why and how places are awarded, and to show the public and students why different types of offers are made.

“No student should ever be rushed or pressured into a decision by the offer that they receive, and as a measure of commitment to this principle, universities have proactively adopted our Fair Admissions Agreement to suspend the practice of conditional unconditional offer-making during the Covid pandemic and supported the introduction of a temporary student stability measure over this recruitment cycle.”