Federal cabinet is expected to consider reforms to the vocational education loans scheme as early as Tuesday to meet a pressing need for legislation before year's end to address a blow-out in education debts and a proliferation of dodgy colleges.

The government has a range of proposals under consideration to deal with the fallout from the VET-FEE Help loans scheme that has seen educational loans blow out from about $300 million in 2012 to $3 billion – much of which is not expected to ever be recovered.

It emerged that dubious operators were exploiting the scheme – originally designed to spread the income-linked university loans scheme to the vocational sector – and offering suspect courses to people who were unlikely to ever be able to complete them, including people with a disability. It then emerged that the government had few legislative means to rein them in. It has already undertaken 16 different reforms to address unethical behaviour and abuse of student entitlements

Education Minister Simon Birmingham says the new university reform package deserves to pass the Parliament. Louise Kennerley

Measures the government is considering include restricting access to loans by high risk private providers, greater checks to ensure students have the capability to complete a course, and a new system of regulating the tertiary financing system.

Some stakeholders have proposed reducing the lifetime loan limit on individual students as a way of putting a better price signal into the market for both students and colleges, and/or having a more differentiated range of subsidies in place for different courses that directs resources to "areas of national economic, employer and student need" as occurs under state vocational training subsidy systems.