Teenagers in England are having to make choices about university on the basis of too little information, a report by the Public Accounts Committee warns.
The PAC report says this is due "in large part to insufficient and inconsistent careers advice".
It also says students have limited redress if they are unhappy with the quality of courses and that shorter and part-time courses have not emerged.
The government says a review of higher education will address such issues.
The report says it's "deeply concerning" that most students in England don't have the advice they need to make an informed decision.
"The substantial financial commitment required and wide variation in outcomes from higher education mean prospective students need high-quality advice and support to make decisions that are right for them," it says.
"The complexity of the market and the volume of information available makes it difficult for prospective students, most of whom are teenagers, to assess the quality and suitability of higher education institutions."
The report also warns that students who are dissatisfied with their course are more likely to drop out than switch provider, with only 2% of students transferring provider each year.
"An effective market requires empowered consumers who can switch provider if they are dissatisfied, but this is not the case in the higher education market."
What does the report conclude?
The PAC report makes five critical conclusions:
- the Department for Education (DfE) is treating the higher education sector as a market, but not one that works in the interests of students or taxpayers
- young people are not being properly supported in making decisions on higher education, with lack of careers advice a crucial factor
- students have limited means of redress if they are unhappy with the quality of their course, even if they drop out
- the DfE does not have enough of a grip on actions to widen participation in higher education, and is over-reliant on the actions of some universities
- the new Office for Students has not yet articulated how it will support the varied and complex interests of students.
What does the head of the committee say?
PAC chair Meg Hillier said it was "deeply concerning" that the government's approach to the higher education sector was letting down students.
"The advice available to help students, in the overwhelming majority of cases teenagers, make informed choices is inadequate," she said.
"Should students then be unhappy with the course they choose, they are not sufficiently empowered to switch providers or get their money back.
"At the same time, the government can provide no evidence that competition between institutions will drive up the quality of education they provide.
"These are not indicators of a market working in students' best interests. Rather, they are the symptoms of failure.
"If the government is to deliver the promised benefits of its reforms then it must be far more rigorous in measuring progress against its objectives and where necessary move swiftly to take remedial action.
"Much rides on the ability of the new Office for Students to function as an effective regulator and, as a priority, we expect it to set out in detail exactly how it will approach the task of safeguarding students' interests."
What does the government say?
The Department for Education maintains that studying for a degree is an investment and can boost earnings.
It is currently carrying out a review into post-18 education, which, the department says, will make sure students are getting value for money and genuine choice between technical, vocational and academic routes.
What does the Office for Students say?
The OfS said it welcomed the report's "sharp focus on student opportunity, choice, quality and value for money", saying its job was to "protect and promote" students' interests.
Chief executive Nicola Dandridge said: "The committee is right to highlight the difficulties that prospective students can face in deciding what and where to study. Improving the quality of information, advice and guidance for students is a priority for us.
"Our process for ensuring that all registered higher education providers meet challenging standards of quality and student protection will ensure a common threshold."
Ms Dandridge added that further, faster progress was needed to widen participation in higher education.
"Progress to date on access and outcomes for under-represented groups have been incremental and that is not good enough."
The National Union of Students said a market-driven system needed to be rethought.
NUS vice-president Amatey Doku said: "There is a real danger that channelling information, advice and guidance along the lines of salary calculators will narrow the focus of higher education too much to merely a transaction in return for a job - this does not capture the full experience that a student gains from higher education.