Careers Australia collapses leaving 15,000 students in limbo

The embattled Careers Australia was placed into voluntary administration late on Thursday – six weeks after it was stripped of federal funding due to dismal completion rates and aggressive recruitment practices.

Classes have been suspended at the college's 14 campuses across Australia and teachers have been stood down.

Employees received a letter from administrators PPB Advisory on Thursday night, which said the company had insufficient funds to meet payroll and other costs.

"You have been stood down without pay until further notice effective immediately," it read.

The administrators, David McEvoy and Martin Ford, said they were working with management to "urgently" determine whether the business could be sold or restructured.

"The recent decision by the federal Department of Education and Training not to approve Career Australia's application to become a VET student loan scheme approved course provider has materially impacted the group's operations," they said in a media statement.

"Regrettably, we have had to suspend all classes and stand down employees while we assess all options available to the business moving forward."

In April, Careers Australia was told that it was among 150 private colleges that would lose its accreditation under the Turnbull government's new VET student loans scheme.

It earned more than $264 million in taxpayer funding between 2013 and 2015. But just 14.7 per cent of students graduated in this period.

One teacher from the Bowen Hills campus in Brisbane, who did not want to be named, said staff were called into a meeting yesterday afternoon and "told it was all over".

"People were crying and clearing out their desks," he said.

"We were all joking that this was going to happen, but it took a lot of people by surprise."

He said that the campus became a "ghost town" following negative media coverage which exposed the college's unscrupulous recruitment practices, which involved targeting vulnerable students and offering them free laptops.

"I am concerned about what it will mean for students," he said.

Master Electricians, the largest trainer of electricians in the country which signed a contract with Careers Australia to deliver training, said the job prospects of hundreds of electrical apprentices in Queensland "were in jeopardy".

Chief executive Malcolm Richards said while young electrical apprentices could move to another training provider, the funding for the courses would not follow them.

Mr Richards called on the government to provide support for young apprentices to complete their electrical training.

Careers Australia entered voluntary administration after unsuccessfully trying to appeal an Education Department's decision to cancel its accreditation.

An Education Department spokesman said that it notified Careers Australia that it had upheld its original decision on Thursday afternoon.

"The original decision was that Careers Australia did not meet three of the provider criteria: financial performance, management and governance and student outcomes," he said.

He said strong tuition assurance arrangements were in place to support students to move to another provider to complete their training, or receive a refund of unspent tuition fees.

Federal Education Minister Simon Birmingham said his office had been in touch with the administrators and tuition services to ensure "appropriate support" would be available to students.

But Victorian Training and Skills Minister Gayle Tierney took aim at the federal government for "taking a hands off approach" to students affected by college closures.

The minister said Careers Australia does not hold a current funding contract with the Victorian government, but there are about 150 continuing students who started training under earlier contracts, who would have the option of enrolling in a TAFE.

Careers Australia has campuses across the country, including Melbourne, Sydney, Perth, Adelaide and Brisbane.

The collapse comes after a series of college closures following a federal government crackdown on the scandalous VET FEE HELP scheme after costs blew out from $325 million in 2012 to $2.9 billion in 2015.

On Friday, the sector's regulator, the Australian Skills Quality Authority, cancelled the registration of a training organisation, Gurkhas Institute of Technology, which has campuses in Melbourne and Hobart.

The regulator found the organisation had insufficient resources and facilities including work placement and assessment practices did not meet requirements.

ASQA also suspended courses at a Queensland organisation, the Australian Academy of Business, due to non-compliance involving enrolment and assessment practices of diploma-level qualifications.

Careers Australia admitted it breached Australian consumer law and "engaged in unconscionable conduct" last year, after the Australian Competition and Consumer Commission successfully pursued the company.

The ACCC won a court-enforced order compelling Careers Australia to repay $44 million in debt for students who had been signed up to courses they believed were free or who had been lured through inducements such as iPads.

The case prompted the Electrical Trades Union to lash out over safety concerns for apprentice electricians.

Gurkhas Institute of Technology's chief executive Chandra Yonzon said they were "disappointed" with ASQA's decision and believe the organisation "is compliant with all its legal and other obligations". They will apply to have the decision reviewed by the Administrative Appeals Tribunal.

The Education Department is advising students with queries to contact TAFE Directors on 02 9217 3180 or the Department of Education and Training on 1800 020 108.