The government has survived a vote trying to block its plans to cut funding from students taking a second undergraduate degree.
The £100m is to be diverted to students taking their first degrees
A Tory motion in the House of Commons opposing the withdrawal of funding was defeated by a majority of 53.
But a number of prominent Labour MPs also spoke against the plan and called on the government to re-consider.
The universities secretary wants to re-direct the £100m savings to students taking first degrees.
The change in funding would not affect students moving from an undergraduate to a postgraduate degree - but would affect those who wanted to return to university to take another degree at the same level or lower.
It is estimated that 170,000 students, mostly part-time, would be affected.
Opponents have said this will prevent people wanting to re-train, such as mothers returning to work, and is against the ambition for "lifelong learning".
Conservative university spokesman, David Willetts, told MPs that the funding change was "not the right approach to education and it is a real barrier to people who are trying to change jobs, shift careers, move forward".
"We do not want to live in a country where if at first you don't succeed, you don't succeed. We want people to have a second chance. We want people to have new opportunities," said Mr Willetts.
An early day motion opposing the withdrawal of funding was signed by 86 Labour MPs - and former Cabinet member, Frank Dobson, told the House of Commons he was "disappointed and concerned" by the proposals.
Barry Sheerman, chair of the children, schools and families select committee, urged the government to delay its decision.
John Denham, the Secretary of State for Innovation, Universities and Skills, rejected the calls for a re-think, arguing that the priority was to widen access to those who had not previously been to university.
"I believe that both economic success and social justice argue that public money should go first to those who have never had the chance of higher education," said Mr Denham.
The funding changes, to be introduced in 2008-2009, with MPs highlighting particular concerns for the impact on the Open University and Birkbeck College, London.
The Open University, which has been campaigning against the funding changes, says it will leave 29,000 of its students without funding and will cost it £32m in teaching funding.
There have been warnings from universities that fees for such students will be forced up above £7,000 per year.
Mr Denham wrote to the Higher Education Funding Council for England in September, explaining the changes.
"While there may be much benefit to an individual, or their employer, in them retraining for a second qualification at the same level, this is not, in my view, usually as high a priority for public funding as support for students who are either entering higher education for the first time, or progressing to higher qualifications.
"In many cases, it may be appropriate for the employer to pay at least a proportion of the costs of such re-training."
There will be exceptions to the funding withdrawal, including foundation degree courses.