Students on vocational courses are responsible for the record pass rates achieved last year, figures show.
Pass rates for 19-year-olds are a year ahead of target, with nearly 482,000 gaining level two qualifications (the equivalent of five good GCSEs), while more than 313,000 completed A-levels, or their vocational equivalent, at level three.
The biggest growth has been in vocational subjects and at colleges and training providers. Colleges are now responsible for a sixth of level two successes, up from an eighth three years ago. And more than one in 10 level three passes are now in vocational subjects, nearly three times the rate in 2004.
Rob Wye, director of young people's learning at the Learning and Skills Council, said: "Not only are young people choosing to stay in learning, more and more are progressing on to level three.
"The FE system is really delivering to increase the number of young people - particularly the more disadvantaged - achieving a level two or three, giving 1.5 million young people a head start in life.
"This is testament to the quality of teaching being offered by FE, as well as the work being done to secure a place for every young person in learning. so that employers feel confident that young people have the right skills to get on at work."
And students who fail to get five A*-C grade GCSEs - the minimum the Government expects for skilled employment - are also doing better, with the proportion who catch up by achieving level two rising more than 4 per cent to 44.5 per cent.
Ed Balls, Children, Schools and Families Secretary, said that the increasing success of vocational qualifications proved that those who dislike academic study can be brought back into education.
He added that it supported the Government's proposal to make education or training compulsory until the age of 18 by 2015.
"I believe that those who claim many young people won't want to remain in training or education until 18 have got it wrong," he said.
"I believe those who are not currently fully engaged with school will study the new more applied qualifications or do an apprenticeship. There must be something for everyone, including those who feel that traditional academic qualifications are not for them."
Barry Lovejoy, of the University and College Union, said that staff should be properly rewarded for their part in achieving these results.
"This is further evidence of the high quality being achieved by teaching professionals in colleges, despite difficult conditions and increasing workloads," he said.
"Sadly, this success is not reflected in the pay and conditions of lecturers, who earn on average 6 per cent less than equivalent schoolteachers. And it is not reflected in the treatment of the FE sector, which is being undermined by increasing marketisation and insecurity."