Thousands of students of at least four colleges have been left in limbo with huge debts following the collapse of one of the country's largest vocational education companies.
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At least 500 administration and teaching staff have also been affected by the collapse.
Aspire College of Education, The Design Works College of Design, RTO Services Group and the Australian Indigenous College were placed in voluntary administration on Tuesday. Aspire alone has about 20 campuses around Australia.
All of the colleges are owned by Global Intellectual Holdings, which is also in administration with debt owing to ANZ Bank.
The fallout follows a federal government crackdown on the scandal-plagued vocational education sector, which included bans on inducements like free laptops and freezing funds to private colleges accessing VET FEE-HELP to 2015 levels.
There has been widespread rorting of VET FEE-HELP, a HECS-style loans system for vocational training students.
"There's thousands of students that have been left high and dry," a source said.
One employee said that the administrators took all the employees' keys and credit cards and padlocked the gates at The Designworks College of Design campus in West Burleigh in Gold Coast.
The colleges have campuses across Australia, including several in Melbourne and Sydney, and receives tens of millions of dollars in government funded student loans. The Australian Indigenous College only enrols indigenous students.
The source said the colleges had exploited the VET FEE-HELP scheme by enrolling as many students at possible, with little regard to their ability to complete the course.
"They would recruit as many students as possible. They weren't interested in the students or their ability to complete the course. They were interested in anyone that came out of the dole office, single mums, and they targeted poor areas."
A letter from the administrator to employees said that major federal government changes to the VET FEE-HELP sector had "resulted in very significant pressure on the college's ability to operate."
"The owners of the colleges have exhausted all available means to continue operating and, with great reluctance, have been forced to place the colleges into voluntary administration."
ASIC documents show the colleges appointed administrators from Hall and Chadwick on Tuesday.
According to Global Intellectual Holdings' most recent accounts, the head company employs 501 people. It is unclear how much is owed to current employees of the colleges and to other creditors to the business.
Global Intellectual Holdings made $83 million in revenue in the year to June 2015, making it one of the largest vocational education companies in Australia.
The group's collapse comes despite Global Intellectual Holdings making a profit of $17.95 million in 2015. During the year it paid $14 million in dividends to its directors Roger Williams and Aloi Burgess. The accounts show the company held $19 million in debt.
Commonwealth Bank is listed as a creditor to Aspire College.
The colleges offer business, management, community services, graphic design, beauty, interactive digital media and teaching English as a second language courses.
The first meeting of creditors will be held at the Hilton Hotel in Brisbane on February 18.
