Traditional school sixth forms are often the best place for students to study the advanced Welsh baccalaureate, according to the diploma's project director.
Keith Davies, from the WJEC, the Welsh exam board, said some students could be held back in a college environment where they had more freedom and choice. He also claimed sixth forms were an integral part of schools that should stay.
But fforwm, the association which represents Wales's FE colleges, said students' eyes could be opened by the wider opportunities offered in the tertiary sector - which could also enhance their career opportunities.
fforwm's Gavin Thomas, who has been assigned to work on the Welsh bac, said post-16 education funding must be overhauled to promote learner choice, and to end the "recruitment war" between schools and colleges, which are currently funded according to learner numbers.
Inspection agency Estyn warned last week that a few schools are giving biased information to students about their options post-16, in a bid to keep them in their sixth forms. And it said a significant number of school-based learners would be better served in colleges.
Collaboration is already seen as the key to widening the range of vocational, work-based and academic courses available to students aged 14-19, as part of the Assembly government's learning pathways reforms.
fforwm has called for a review of the tertiary system, with more college-based provision, particularly in urban areas.
But Mr Davies said: "Students studying the bac at college are given more freedom to manage their own time and sometimes this can work against them as they struggle with their new freedoms."
Last year, college students taking the advanced diploma were twice as likely to fail or drop-out. Only 15 per cent of the 159 school pupils who completed the advanced bac course failed to gain the award, compared to 32 per cent of 145 completers studying in FE colleges. The drop-out rate across the board was high: less than half of those registered for the bac in February 2005 collected the advanced diploma that summer.
Mr Davies said drop-out rates would fall rapidly after first-year teething problems. Pilot schools have helped pupils by encouraging them to complete the bac's key skills requirements earlier.
Confidence in the qualification had also been boosted among teachers by sample questions and more understanding of the marking system, he said.
Dr John Greystone, chief executive of fforwm, insisted the results last year of students who completed the advanced-level bac in colleges were on a par with those in schools.
He added: "Colleges provide an excellent learning environment for students, with more than 40 A-level choices and a whole host of vocational qualifications."
An announcement is expected shortly on plans to pilot a foundation-level Welsh bac from September. A further evaluation of the pilot qualification is also due soon.
The bac was launched in 2003 at 16 schools, with roughly 2,500 students.
The first students to complete the two-year programme sat their A-levels and equivalent exams last summer.
Bac students typically take two or three A-levels as well as a "core" programme of study designed to broaden their skills and studies. This includes key skills; study of Wales, Europe and the world; work-related education; and an extended research programme.