Drop-out rates at Scottish colleges double after the deadline which makes them eligible for full funding, new figures show.
When a student has completed a quarter of a course, colleges can keep the money they receive from the Scottish Funding Council (SFC) even if that person leaves.
Before the cut-off date, when money has to be returned, the retention rate across Scotland is 95 per cent. Once the money is safe from being clawed back, it falls to 85 per cent a doubling in the drop-out rate from 5 per cent to 10 per cent. Part-time courses retain more students with 92 per cent completing their course, compared to 81 per cent finishing a full-time course.
The figures are revealed in the annual report on staff and student performance in Scottish FE colleges last session, published by the SFC.
However, the report also shows most colleges are meeting targets measured through Weighted Student Units of Measurement (WSUMs), which calculate performance by taking into consideration how resource-intensive the course is.
Another six institutions are within a two per cent leeway, which means no college will suffer a cash clawback because of under-enrolment. In 2004-05, the Scottish FE sector increased its student activity by 4.2 per cent above the 2004-05 target.
Finding employment and financial hardship are cited as possible reasons for students dropping out.
The report says: "Students may leave prior to the required date for a number of reasons, some of which may be considered positive." However there is no hard evidence, according to the report. "The vast majority of students do not inform the college of their reasons for leaving at this early stage," it states.
Of the 85 per cent completing their course, 78 per cent gained a qualification or progressed to the next year.
A spokeswoman for the Association of Scotland's Colleges denied the figures indicate colleges try harder to retain students before the financial cut-off.
She said: "It is certainly not a case of the colleges neglecting them after that time - they take their responsibilities for pastoral care very seriously.
"Colleges are consistently rated above universities for student satisfaction."
She argued that many are not actually drop-outs if they have found jobs, a target which is the aim of further education. "We are not as concerned purely with qualifications for qualifications' sake as the universities.
"Obviously they are important, but we can see some value in the learning experience beyond the piece of paper at the end."
A spokeswoman for the Scottish Funding Council said it was not overly concerned about the rise after the funding deadline.
She added: "It is not in colleges' interests to have students leave courses in the academic year.
"Some students leave before completing their course for a variety of reasons, even if the college does offer them financial assistance. Many do come back to study later on."
After a student has completed a quarter of the course, it is up to the college to reallocate that funding if he or she drops out, the funding council confirmed.
Funding averages at pound;189.63 for every 40 hours of study and is received on a monthly basis, so if a college receives funding for a student who pulls out early that cash is clawed back from later payments.
* The number of learners in FE colleges has risen from 335,658 in 1998-99 to 351,435 last year - a drop from 385,620 in 2001-02.
* 20 per cent of students are on full-time courses, using more than 65 per cent of provision.
* Social inclusion is steady, with 27 per cent of students coming from the 20 per cent most deprived postcodes.
* The biggest growth areas are health care, medicine, and health and safety which have increased by 83 per cent in recent years; for construction and property, the rise is 63 per cent.
* Of the 4,688 full-time teaching staff employed last year, 4,179 (89 per cent) held a teaching qualification.
* Students are happy with the quality of learning experience and with their college as a whole, with 92 per cent surveyed last year expressing satisfaction (although that drops to 35 per cent when students were asked if they were satisfied with the personal and financial advice available).
* Just 25 per cent of students were happy with the careers advice available at their college.