Plans which will restrict recruitment levels will be spelled out by the Further Education Funding Council for Wales when the provisional cash allocations for 1996-97 for colleges are announced next month.
The council is concerned that quality will be sacrificed if the current growth rate is maintained as there will not be enough cash to go round. But many colleges are angry about the proposal.
One principal said: "We have succeeded better than any English region in hitting our targets. We were assured by the Government when colleges left local education authority control three years ago that such success would be rewarded."
Student numbers in Wales expanded rapidly from 102,150 at incorporation in 1992 to 137,000 in 1993-94 and 144,259 in 1994-95. Current student numbers stand at 169,995. The Government's expansion target for Wales is around 190,000 for 1998-99.
Many colleges say this is an unrealistically low target and shows the refusal of Government to pump more money into the system. Robin Trebilcock, chairman of Fforwm, the association of Welsh colleges, said the sector had already made record efficiency gains, cutting student-staff ratios by 40 per cent since 1989.
Wales has higher participation rates than the rest of the UK but double the number of anticipated school-leavers without qualifications. "These efficiency gains are the last straw as far as many colleges are concerned."
Higher grants from the Welsh Office and sustained support from local education authorities for transport to rural areas and grants for economically-deprived regions, have helped encourage recruitment and sustain growth.
But local education authority cash is unlikely to be sustained. And the FEFC funding formula, which is currently being revised, has allowed the larger colleges to expand at the expense of smaller ones. The differences were brought sharply home for Coleg Harlech, a small residential college of 140 students, which costs Pounds 8,950 per student compared with the Welsh average of Pounds 2,800.
The FEFC has hinted that it should look for radical measures to cut costs including possible merger with a larger institution (TES, March 22). But it is not just the tiny specialist institutions which must rethink their futures.
Unless the very rapidly expanding colleges lower their sights, many of the slower-growing ones, often in areas of severe social and economic need, will be struggling to maintain standards as the cash per head is spread ever more thinly.