Careers Australia collapse sparks concern

The collapse of Careers Australia has stirred ongoing political argument about vocational loans as the future of work placements and apprenticeships is plunged into uncertainty.

Thousands of students were this week told to stop work immediately and staff were stood down without pay as administrators David McEvoy and Martin Ford of PPB Advisory went through the company's books.

Administrators said they didn't have sufficient funds available to meet payroll costs that would allow trade on a "business as usual" basis.

Careers Australia has 13 campuses in Sydney, Melbourne, Brisbane, Perth, Adelaide and the Gold Coast.

The collapse was said to have affected 15,000 students and 1000 staff six weeks after the company was stripped of its accreditation to deliver VET-funded courses.

The Electrical Trades Union claimed they had been promised training would continue for the remainder of 2017.

"Dozens of electrical apprentices are going to have the completion of their training delayed, preventing them from practising their trade or earning a living wage," ETU spokesman Scott Reichman said in a statement.

The union also slammed Careers Australia's "substandard" apprentice program which "relied on unsupervised, self-directed online training".

Federal Education and Training Minister Simon Birmingham said Careers Australia had tuition assurance protection through TAFE Directors Australia that would protect students if trading ceased.

The government has contacted administrators and discussed how different parts of Careers Australia may continue to operate.

"It is possible that some of them could be picked up by other training providers of repute and continue to provide training services around the country," Senator Birmingham said in Sydney.

He said the background of the predicament involved the troubled VET FEE-HELP scheme that saw costs blow out from $325 million in 2012 to $2.9 billion in 2015 as providers raced to sign up students for loans.

In many cases, they had no ability or intention of finishing the courses.

Under the government's new program, the number of courses eligible for loans has been more than halved to about 350 and loans are capped at $5000, $10,000 or $15,000 based on what it believes delivery costs should be.

Labor remained sceptical of the "rushed implementation" of changes.

Vocational education spokeswoman Kate Ellis was concerned about the possibility of students being left with partial refunds instead of complete qualifications.

'We need a clear guarantee that the government will step in to make sure that no student is left worse off and that every single one of them can complete their course at TAFE or a quality provider," she said.