Colleges are "piling" students into the wrong programmes, leading to persistent drop-out problems, the Further Education Development Agency has warned.
A survey of 9,000 students by FEDA found that of the 10 per cent of college students who failed to complete courses, most believed they had been mismatched to study programmes. A majority of drop-outs were also late applicants.
The drop-outs were also less satisfied with the quality of teaching they received, and were the least likely to believe that their course was interesting.
Ursula Howard, director of research and information at FEDA, said: "It is clear from this research that the biggest issue for colleges is ensuring that students are on the right programme".
FEDA chief executive Chris Hughes said: "Recruitment-led price-slashing in further education can distort retention rates. Piling 'em high and price wars are not the way forward for lifelong learning."
Drop-outs were most likely to be male, have difficult financial or family circumstances, and to have had their fees waived or reduced, the report found.
The authors also claim to have found the first conclusive evidence that the greater the distance a student has to travel to college, the more likely they are to drop-out.
As well as measures to improve advice and guidance, FEDA has called for a "dramatic increase" in access funds for colleges, the introduction of higher education-style loans to college students, and the abolition of child benefit for 16 to 19-year-olds in favour of a means-tested education allowance.