The Turnbull government will freeze payments to private colleges as an emergency measure in an early move to overhaul the scandal-plagued vocational loans scheme.

From next year, loans to private colleges accessing the VET FEE-HELP scheme – a HECS-style loans system for vocational training students – will be frozen at 2015 levels.

Former National Party minister Luke Hartsuyker could lose the seat of Cowper in a late challenge by the independent Rob Oakeshott. Credit:Alex Ellinghausen

This means that if a training provider billed the government $40 million this year, it will not be able to access any more than that amount next year.

Payments will also be suspended for providers if they are believed to be dodgy and colleges will now be paid in arrears rather than in advance.