With reference to the Literacies for Learning in Further Education TLRP project, this article suggests that teachers' and students' views of students' literacy capabilities are often influenced by a deficit model of literacy which does not take account of students' everyday literacy practices. The article revisits some of the literature on 'teacher expectancy', which has indicated that students' experience of education is affected by their teachers' expectations of them. We propose that these expectations are often shaped in turn by beliefs and attitudes about teaching, learning and literacy. We suggest that a recognition and respect of students' everyday literacy practices will enhance teachers' understanding of their students and increase potential for negotiating the borders between vernacular and curriculum literacies, thereby improving students' experience of Further Education.