Universities and colleges providing substandard courses or paying lip service to helping disadvantaged students progress would be more likely to face sanctions under proposals outlined by a government watchdog.

The plans by the Office for Students (OfS), the independent regulator of higher education in England, are designed to raise the bar of standards and ensure more students – particularly those from groups underrepresented in higher education – get to the end of courses and find better-paid work.

A few lesser-known providers have been penalised in the past by the OfS, which has the power to impose fines of up to £500,000 or remove universities from registers, which means they cannot access public funds. The proposals could ultimately allow sanctions to be used against larger universities with lots of disadvantaged students or those from particular backgrounds, but where grades have been substandard.

They include new definitions of quality that set out what universities, colleges and other higher education providers would need to do to satisfy the OfS’s conditions of registration, aiming to provide “a minimum level of protection for all students – whatever and however they are studying.”

“We have previously been clear that we are determined to stamp out any pockets of low quality, and these proposals would not only raise the bar in terms of the quality overall, but would enable us to monitor quality at a subject level, as well as taking into account issues which might be affecting students from particular groups,” said Nicola Dandridge, the OfS chief executive.

‘We are also making it clear that we do not accept that expectations should be lowered for students from disadvantaged backgrounds.”

The universities minister, Michelle Donelan, said: “We must have robust regulation of our higher education system, which includes strong action if standards slip and principles which protect students’ interests.”

While welcoming the consultation, the director of an education policy thinktank said the proposals came against the backdrop of “an obsession” among policymakers about what some regarded as “low-value” courses.

“Government regards itself as having a role in ensuring there is quality and standards,” said Nick Hillman, the director of the Higher Education Policy Institute and a former special adviser to the government.

“But the difficulty is that universities are legally autonomous bodies, and the problem with the approach to date is that there has been an eagerness to judge courses purely on the basis of the earnings graduates make afterwards.

There’s obviously a problem with that when you apply it to, say, people who are in nursing or other roles.”

The announcement came as universities in the UK said they were drawing up a charter to take what were described as “low-value, low-quality” courses, following pressure from government and others. A Universities UK advisory group will initially focus on areas including “best practice” and the use of metrics.

The move was greeted with scepticism by some, with suggestions that a perception had wrongly been allowed to arise that university courses are not reviewed for quality.