Former federal member for Cook Bruce Baird, who issued the independent review, listed a litany of problems ranging from students being lied to and poached from other institutions by unethical agents taking huge commissions, to institutions so flawed and financially unstable they should never have been allowed to be established.

The sector has been rocked in recent months by the collapse of several private college operators, leaving thousands of international students stranded, while others have gone into administration.

The Federal Government announced changes to skilled migration laws recently in an attempt to decouple education and skilled migration to stop students signing up to hairdressing, cookery and other courses as an easy path to residency.

Mr Baird called yesterday for a shake-up of the sector to stem the damage that had been inflicted on Australia's international reputation.

''First and foremost is the problems of colleges that have been established with inappropriate regulatory control, without checking the finances and the level of risk in establishing their operation; wrong information provided to students, a skewing of the income into Australia in relation to permanent migration outcomes; and also the lack of attempts to integrate students into the Australian life,'' Mr Baird said.

''We have permanent residency factories, [and] if you ask any of the good providers they'll quickly name those who they believe are the dodgy operators rorting the system.''

For more on this story, see the print edition of today's Canberra Times.