A Sydney clinical aesthetics college run by an Order of Australia medallist has been told by the federal Department of Education that it intends to cancel the college's accreditation.

The Australasian College of Health and Wellness in Glebe is the second education provider owned by Maureen Houssein-Mustafa OAM that could close if it does not successfully appeal against the Department's show cause notice.

Beauty college owner Maureen Houssein-Mustafa. Credit:Louie Douvis

More than 500 students were left in limbo just before Christmas Eve when another one of her beauty colleges, Australasian College Broadway, suddenly went into administration and closed its doors.

The Glebe college was approved to deliver a degree backed by taxpayer-funded student HECS loans in applied health in 2015, despite Australasian College Broadway remaining under a NSW police investigation into whether it enrolled hundreds of "phantom students" into diploma courses they never completed. Ms Houssein-Mustafa has always strenuously denied the allegations.