The University of Wolverhampton has been ordered to repay £3.5 million for understating how many of its students dropped out last year.

Fifteen per cent of the university’s 22,790 students failed to complete their studies – but bosses claimed it was less than that and now have to repay the extra cash.

Wolverhampton’s bill to the Higher Education Funding Council for England forms part of its wider £8m debt.

The HEFCE, which provides funding for teaching and research at universities around the country, today told the Express & Star it had conducted an audit of the city university but the details would not be made public at this stage.

Spokesman Roger Grinyer said the HEFCE had been in talks with Wolverhampton and agreed on the actual non-completion rate of 15 per cent.