The Office for Students' full powers came into force on 1 August.
Commenting, Sir Michael Barber, chair of the Office for Students, said:
'The 2017 legislation which established the Office for Students provided for the phased transfer of its powers from the Higher Education Funding Council for England, Office for Fair Access and DfE. Today marks the final step in that process. In addition to the powers we already have, from today we are able to impose substantial financial penalties where universities are evidently not acting in the best interests of students and taxpayers in the short, medium and long term.
'We have been clear from the outset that we would much prefer to resolve problems such as grade inflation or unconditional offers without using our formal powers; but also that we will not hesitate to use them if necessary.
'Our world-class higher education system is immensely important to the economy and society and we will do whatever it takes to ensure its success in the future.'