Mature and part-time students taking degree courses at FE colleges will be "further marginalised" by the higher education Bill passed last week, key groups in the sector have warned.
The National Institute of Adult Continuing Education (NIACE) has questioned whether the Bill will mean a significantly better deal for the 71,000 full-time and 136,000 part-time HE students who study in FE colleges.
It has put forward two key proposals for the Government to address problems facing mature and part-time students. It wants full-time students over the age of 54 to gain access to student loans.
And part-time students earning less than pound;15,000 per year, who are not receiving support from their employer, should be allowed to defer fee repayment until they have completed their course and hit the income threshold.
Alastair Thomson, NIACE's policy officer, said: "This Bill is likely to further consolidate the existing nature of HE, with the gilded youth of Oxbridge at one end and poor, mature part-time FE students in the other."
He said full-time students can work the same number of hours as part-time students, have the same number of timetabled hours of study, but have the advantage of being able to defer tuition fees.
The Bill proposes to allow colleges to charge students up to pound;3,000 a year in tuition fees, which are repaid once they earn more than pound;15,000 a year.
NIACE, claims that it is unlikely that many colleges will feel able to charge higher fees given their local, often small-scale provision. It is also concerned about universities creaming off up to 40 per cent of cash designed to fund HE students in FE colleges.
Mr Thomson added: "The Government has not shifted in its intention to continue the indirect funding of HE in FE colleges with the money channelled through higher education institutions, which slice anything between 2.75-40 per cent off funds before passing them on to colleges.
"The consequences of universities 'top slicing' this funding are that students in FE have less spent on their HE experience than others. Research undertaken by NIACE for the Higher Education Funding Council for England suggests a clear need to review this financial relationship." NIACE was, however, delighted with one concession that indicates ministers may at last be listening to concerns about the treatment of part-time students.
Mr Thompson said: "More money will be made available for the teaching of students doing part-time degrees, and hopefully the quality of teaching will rise."
Natfhe, the lecturers' union, shares the concerns about the impact of the HE Bill on the FE sector. Liz Allen, HE national official at Natfhe, said:
"There is nothing in the Bill for HE provided in FE colleges. The funding problems of FE will remain."
The Mature Students Union described the passing of the HE Bill as "a major setback for mature students". Alan Coleman, the MSU's president, said: "We have been campaigning for equal access to HE throughout the life of this Bill but our concerns have been ignored."
A legal challenge to the "discriminatory provision" of student support is still under consideration by the MSU's legal advisers.
The Association of Colleges also wants part-time students earning less than pound;15,000 a year, and not receiving employer help, to be allowed to defer fees.
But it added that it believes that the revised proposals mean that college students can progress to HE without facing major financial obstacles.