Figures from the federal government show that the top tier has 121 institutions and includes the largest universities,while the second tier has 1,042 and includes many TAFE colleges. The group called tier 3 includes Federation University,based in Ballarat,but is dominated by private technical colleges.

The federal government recorded 53,000 offshore student visa applications for tier 3 institutions last financial year but has recorded a fall of more than 60 per cent in visa grants for this group since the new migration strategy started in early December.

The government says the visa grant rate for the tier 3 institutions is the lowest since records began in 2005.

Home Affairs Minister Clare O’Neil fired back at the industry by saying some providers were exploiting the system.

“Australians are sick of the exploitation,profiteering and terrible damage being done to our international education sector by dodgy training providers,” she said.

“Our government is cleaning up this sector.”

In one example of federal policy change,O’Neil and Skills Minister Brendan O’Connor have put $38 million toward greater compliance tests for vocational education providers.

O’Neil will also gain additional powers in regulations due to be introduced in March that allow the immigration and home affairs ministers to issue suspension certificates to providers who are considered “high risk” and should be banned from recruiting overseas students.

She told this masthead she was willing to use those powers to shut down education providers.

“Now we move to the next phase – suspending the worst bottom feeders from being able to operate in the first place,” she said.

“If dodgy providers don’t lift their game,we’ll boot them out of the system.”

While many private colleges are suffering from the stricter rules,public TAFE colleges are not reporting the same scale of reduction in their student numbers.

There is some frustration about the pace of the visa processing for public TAFEs,one source in the sector said,but many support the government’s effort to change the system.

The main courses for these colleges include management and commerce,chosen by 35 per cent of the overseas students,and hospitality and personal services,chosen by 26 per cent.

A key concern for the industry association was the rejection of Indian student visa applications in December,when the tougher rules began.

“Feedback from our counterparts in India,along with input from various stakeholders within the Indian education sector,indicates a growing perception that the Australian Government’s approach to processing international student visas is causing significant damage to our national reputation,potentially to a degree that may not be easily reversible,” Williams said in his letter to Giles.

The government said the decisions in December turned away about 100 aspiring students from India in vocational education and training,while the January results showed visa applications were approved.

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