Hadlow College, a land-based institution in Kent, was threatened with closure or merger after being rated "inadequate" in 2004, and its finances were so poor that staff recall poring over bills to decide which ones they could pay.
But having hired a former City auditor to stabilise its financial position, the college has gone on to earn top grades in its latest inspection, with inspectors particularly praising the way it uses commercial activity to subsidise its education mission.
"Value for money is outstanding," the inspectors said. "The college has improved outcomes, while increasing enrolments, often of less traditional learners, and while extending its estates. Resources are managed efficiently and effectively to benefit learners. The college has self- funded major initiatives, while sustainable management of resources and efficiency are monitored carefully."
As enrolments rose from just 330 full-time students in 2005 to 930 last year, the college invested pound;16 million of its own cash in new buildings, having sold off some to stay afloat seven years ago. Inspectors praised the college's "low dependency on public funding".
A spokeswoman for the college said: "It is run as a business with the core and most important element being education. Commercial enterprises include three farms, three farm shops, an award-winning tearoom, 10-acre landscaped gardens open to the public, a garden centre, fisheries, and a lot more."
Although many of these facilities cannot be replicated by colleges which are not agricultural, she said Hadlow could nevertheless be a blueprint for institutions trying to raise income against a background of public sector cuts.
Students are also able to work part-time in the commercial facilities and earn while they learn, she said. The inspectors believe this helps prepare them for the world of work. Inspectors also praised students for their outstanding practical work and teachers for their excellent vocational knowledge and ability to inspire.