Colleges providing higher education for a small number of students could suffer under new funding proposals, the Association of Colleges has warned. The Higher Education Funding Council for England takes responsibility for funding all degrees, Higher National Certificates and Higher National Diplomas from the Further Education Funding Council in 1999-2000. HEFCE's funding method assumes HE student numbers remain similar from year to year. But in smaller FE colleges, numbers can vary, effectively penalising them financially. "HEFCE needs to look at how its methods affect smaller institutions," said John Brennan of the Association of Colleges.