Colleges are already a distinctive part of the mainstream higher education (HE) sector. This article discusses whether the prospect of an increased role in the provision of HE could prove the silver lining for colleges in an otherwise tough spending review settlement. The financial picture seems to be mixed. Colleges, like universities, are faced with having to raise fees to over 6,000 British Pounds per year just to maintain their funding. This may deter applicants, particularly those from poorer families who are disproportionately attracted into further education (FE). Although some colleges will feel the need to cut costs in order to charge lower fees and thereby gain a competitive edge, there is not much scope for reducing spending without impacting on standards. To charge significantly below the average also risks sending the wrong message about quality. On the other hand, increases in HE fees to date have not resulted in the numbers of applicants falling; nor has it widened the gap between the number of applications from the richest and poorest social groups. Despite changes that save the taxpayer money, student loans still represent a good deal for students and grant support for the most disadvantaged remains in place. The government is planning for a 10 per cent increase in student numbers, not a reduction, though it has also signalled that expansion does not mean more of the same.