In a move to root out unscrupulous operators in the visa-driven sector, Education Minister and Deputy Prime Minister Julia Gillard yesterday introduced legislative changes forcing all 1300 registered colleges and universities to re-register under tighter guidelines.
A rash of shutdowns by colleges that fail to meet the new standards will leave the industry having to find new places for students or footing the bill for refunds.
The move is likely to be greeted with caution by the states.
Victoria last night expressed concern the proposed changes could complicate its own 'rapid audits' of the sector.
To re-register under the Commonwealth Register of Institutions and Courses for Overseas Students, providers will have to demonstrate a commitment to education and standards. They must re-register by the end of next year.
Gillard told parliament, "The message to providers is: if you are not providing your students with a quality education in a safe environment, clean up your act or risk being shut down."
The country's elite universities this week called on the government's new Tertiary Education Quality and Standards Agency to take over the lead from the states in cleaning up the system.
In its submission to a Senate inquiry, the Group of Eight universities accused the states of showing a 'lack of interest' in enforcing the commonwealth's Education Services for Overseas Students Act that Gillard is amending.
The Australian Council for Private Education and Training said a clear plan, and possibly additional support, would be needed to protect students if there were a significant number of shutdowns.
Repeated assaults on Indian students in 2009, have hampered the 15 billion worth industry's reputation. The industry is Australia's third-largest export earner.