Private training colleges could face bans on using brokers to sell their courses and restrictions on the types of diplomas that attract government funding in the latest bid to protect vulnerable students from exploitation.

After growing concerns about high-pressure sales tactics and students being saddled with debts, the Turnbull government has frozen the funding available to each college under the loan scheme while it plans a new system for 2017.

As the focus shifts to the forthcoming overhaul, the vocational education and skills minister, Luke Hartsuyker, said “all options” were on the table including a ban on brokers or greater curbs on their activities.

“One thing that I think is important is the future of brokers and agents,” he told Guardian Australia.

“A lot of the problems hark back to these unscrupulous brokers who didn’t have any real interest in education. One option on the table is that there are no brokers in the 2017 model. That would be one option that has been suggested by some.”

Hartsuyker hinted the package could include curbs on the types of courses for which vocational education and training (VET) colleges can be funded under the loan scheme known as VET Fee-Help, shifting the emphasis towards the employment market skills needs.

“One of the things that I’m very interested in is that we’re looking to invest our training dollars in those areas where we have growth and are going to contribute positively to economic activity,” he said.

“We want training that’s going to lead people into jobs and one of the elements that I’ll be looking at very carefully is the eligibility of various training courses for VET Fee-Help funding going forward.”

The minister also called for an improvement in the information available to students about courses they were considering, saying he wanted “a more efficient market and a more informed market”.

The government announced late last year that it would rethink the entire funding model, but Hartsuyker’s comments provide an insight into his thinking as he begins work on that task.

The Australian Council for Private Education and Training, which represents private providers and is due to meet with the minister this week, acknowledged the concerns about brokers.

But the council’s chief executive, Rod Camm, said he favoured “real quality controls” through regulation over an outright ban on brokers.

“There’s no question that the unregulated approach to brokers has created enormous problems in our industry. That means there are only two options: regulate them or ban them,” he said.

“The challenge we’ve got is brokers have become a big part of the industry. There are good brokers out there. Good colleges tell me it’s really difficult to find students without them.”

Camm said he did not have a problem with the government exploring the courses that were eligible for VET Fee-Help, but authorities did not have a good track record of “picking winners”.

Last year, the government and regulators came under pressure to clamp down on the VET sector after increasing reports of vulnerable students being encouraged to sign up to courses for which they were ill-suited.

A Senate committee, dominated by Labor and the Greens, called for sweeping changes to the system because easy access to government loans had left students and taxpayers as “the victims of a provider-led feeding frenzy”.

Colleges were accused of aggressively increasing their enrolments to receive more funding under the VET Fee-Help scheme. Students who dropped out of the courses were left with debt obligations, even though some of them had been told the qualification would be “free”.

The number of students accessing VET Fee-Help rose from 55,115 in 2012 to 202,776 in 2014, according to government figures, while the total value of loans increased from $325m to $1.76bn in the same period.

The Australian Competition and Consumer Commission launched four federal court cases against private providers and brokers late last year.

The Labor leader, Bill Shorten, who has been touring marginal electorates, said on Wednesday he would stop the “rampant privatisation of Tafe” if he won this year’s election.



“We’ve seen all the scandalous behaviour of some in the private sector training industry, where we’ve seen iPads given out to hook people in for courses which go nowhere and achieve nothing,” Shorten said in a press conference in Cairns.

Hartsuyker said he was building on the work initiated by the education minister, Simon Birmingham, which included bans on laptops and other inducements being used to spur enrolments from April last year.

Hartsuyker, who took over the training portfolio after Malcolm Turnbull became prime minister, announced the funding freeze in parliament’s final sitting week before the summer break. It means a college that accessed $1m from VET Fee-Help in 2015 cannot exceed this level in 2016.

“The bottom line was that the scheme was losing the confidence of the public and something had to be done,” he said. “One option was to shut the scheme down altogether and deny students the opportunity to receive training ... my clear preference was to move to make the scheme sustainable.”

Hartsuyker declined to put a deadline on his consultations.