The drive to increase participation rates and meet national education targets is being severely hit by swingeing budget cuts, colleges warned this week.
Principals warned that efforts to raise participation rates were being undermined by a funding squeeze which was limiting recruitment now and in future years.
Colleges blamed financial problems for the crisis, and said minority courses were being closed to make ends meet.
Many institutions surveyed by the Association of Colleges said they were recruiting more students than they expected to be paid for - pushing down unit costs by increasing class sizes and axing courses.
The survey, which was conducted for The TES, found most sixth-form colleges and a third of general FE colleges had dropped subjects. Another 34 per cent of colleges said they had cut extra-curricular activities to make ends meet. The survey comes as MPs prepare for the first full investigation of FE funding since colleges won their independence in 1993. Members of the Commons Education Select Committee will question funding chiefs on Tuesday.
The survey also showed wide regional variations in recruitment, something which principals confirmed this week.
Several colleges in the north of England pointed to stable or low recruitment, and suggested that Modern Apprenticeships were hitting enrolment on traditional A-level courses, even among able students.
But there was increasing evidence of selection within the college sector, as sixth forms coped with record applications, and turned away thousands of students.
Nick Goffin, principal of Gateway Sixth Form College in Leicester, said he had closed A-level courses in German and Italian to make savings, although collaboration with neighbouring colleges was helping to maintain courses.
And Colin Greenhalgh, principal of Hills Road Sixth Form College in Cambridge, said access courses for adults had already been axed, and more could go if the funding squeeze did not ease.
He said: "The situation in colleges is diabolical and I feel very strongly that it is high time the Government made a statement. Class sizes in sixth-form colleges have gone up by 25 per cent since incorporation and there's no fat left.
"AS-levels for example, have reduced considerably because we cannot afford to run sets with less than double figures."
Christine Cassidy, Stoke-on-Trent Sixth Form College principal, said she had not denied students places this year, but faced cuts to accommodate the extra numbers. The college's plans, however, anticipated drawing back efforts to raise participation because there was no cash to pay for the drive.
She said: "We have a Government which wants us to increase participation. There's only one solution and it does require some more funding - the justification is very clear."
The squeeze has not hit all colleges, however. David Linnell, principal of John Leggott Sixth Form College in Scunthorpe, said he had exactly hit recruitment targets. But he warned that the popularity of Modern Apprenticeships was even luring away some able potential candidates from A-level study.