Funding chiefs have praised Welsh colleges for expanding courses, while meeting quality targets.
The annual report of the Further Education Funding Council for Wales shows enrolments were more than 12 per cent up last year and more than 90 per cent of programmes were classed as good or better.
Part-time enrolments rose 15 per cent.
In the report FEFCW chief executive Professor John Andrews said: "Whilst a few institutions have found themselves in difficulties of one sort or another they have pulled themselves round and, despite the severe squeeze on funding for further and higher education, our institutions are continuing to produce first-class education and training."
He praised colleges' efforts to develop the principality's economy, pointing to work with the South Korean electronics company LG.