Higher education watchdog the Office for Students (OFS) is understood to be launching a review of how £1.3bn per year of funding might give more support to "priority" subjects in the spring.
The OFS will not consider tuition fees - with the government set to publish a separate response to calls to cut fees.
According to the BBC Universities UK warns it will matter "how much" funding is left after the review, as well as how it is allocated.
The Tory party has promised to tackle what it calls "low-quality courses" in university - and the OFS review will examine how funding can be targeted for priority subjects.
While most university funding is delivered through tuition fees, the government still provides a significant direct stream of grants.
This includes subsidies for subjects that are more expensive to teach, such as medicine, science and technology. There will also be money available to improve access to higher education for disadvantaged youngsters. At present the funding is widely distributed, to more than 300 higher education providers. But the future allocation and focus of the money is to be examined by the OFS review.
The Russell Group, representing some of the UK's major research universities, says the annual grants represent 13% of funding for undergraduate places.
The university group has raised concerns about these grants being cut, arguing that funding for many courses is already stretched.
The education secretary has told the OFS he wants to prioritise support for the government's industrial strategy, which aims to invest in "skills, industries and infrastructure".
There will also be a push for more effective ways to spend money allocated for recruiting disadvantaged students, and support for specialist institutions.
