Soundwell College in Bristol has become the first institution of the millennium to fail a Quality Assurance Agency teaching inspection.
Two other further education colleges have been ordered by the QAA to produce action plans to address serious quality problems.
In a report published this week, the QAA said three of Soundwell's higher education courses, covering a small number of students in business studies and leisure and tourism, were failing.
Soundwell was given 13 points out of 24 for the provision, one of the worst grades in the sector. The sector average is about 22.
The college admitted that its approach to higher education courses was "unplanned and rather opportunistic".
The report said: "The reviewers identified serious inconsistencies of practice in monitoring and managing (students') progression between years." There will be another review within a year.
Mid-Kent College of Higher and Further Education was given an overall score of 17 out of 24 for the quality of its business and management teaching.
Inspectors found significant weaknesses in three of the six areas assessed at Mid-Kent.
Basingstoke College of Technology was given 16 out of 24 for teaching in business and management and in leisure and tourism. Inspectors found weaknesses in three areas.