But it admits it has no clear idea why the proportion of bursary funds being spent on study expenses increased by 88 per cent from 1996-2000 and on travel by 19 per cent, while spending on maintenance fell by 9 per cent.
The council has now begun consulting the sector on a number of solutions. These include making permanent a spending cap introduced this year, setting out rules for bursary expenditure on travel and study costs, or restricting bursaries purely to living costs.
Policies on bursaries, which were worth a total of pound;47 million this year, do not stipulate conditions for funding study or travel expenses. One explanation for the soaraway expenditure may be the growth in the number of part-time students, who now account for 84 per cent of enrolments. Few qualify for maintenance support but they may be able to claim for study and travel expenses.
The council's paper adds: "Colleges have almost unfettered discretion in how they use bursary funds towards such expenses. The scale of the growth is concerning, and the council does not yet know the full reasons for this."
But doing nothing is not an option. Bursaries, the council says, "should be applied fairly and consistently throughout Scotland. If colleges retain the high level of discretion currently given to them in using these funds towards students' study and travel expenses, student bursary applications are likely to be assessed differently college by college, leading to potential unfairness."
The funding council also points to decisions taken by ministers to bring student support for FE students into line with that for higher education students. This requires similar approaches to travel and study support in both sectors.
The consultation paper acknowledges there will be disadvantages in capping expenditure. Funds would be frozen at each college's historic levels, which might not necessarily be related to the needs of its students.
If the cash was paid through general funds instead of bursaries, colleges would be able to meet their own needs, the council says, but this could in turn mean greater inconsistency in how students' expenses are met.
Mandy Telford, president of the National Union of Students, said the problem stemmed from the discretionary nature of FE bursaries. "We want to see them based on an entitlement, as in higher education, so a student knows at the outset what he or she is going to get, without having to rely on what each college has left in the pot."