The collapse has particularly come as a major blow for the Australian Government, which has been working hard to rebuild the industry's battered image. The Department of Immigration had placed hundreds of Sydney-based students in the school after their previous school, Global College, went broke in 2008, the ‘Sydney Morning Herald’ reports.

The future looks uncertain for 500 Sydney students enrolled in English language, design and commercial cookery, most of them are hoping to secure permanent residency after completing their courses.

“I made the biggest mistake coming to study in Australia. The quality of education here is shit. We have nothing but the media to rely on now,” Karun Sachdeva, 24, said adding that he did not know whether he would be refunded the $2500 he had paid for the next semester.

On Thursday afternoon, teachers at the Meridian International Hotel School were called to a meeting and within minutes were told they had lost their jobs.

“They said they do not have enough funds to pay us and we would have to leave straight away,” Terrence D'Souza, who taught commercial cookery there, said.

Ten private colleges catering to international students have been closed down this year in Australia.

The Victorian Registration and Qualifications Authority said the immediate priority was to ensure students doing VCE exams experienced no disruption.

“The VRQA has sent senior staff to the secondary school today to ensure that all VCE examination papers are secured and that students are properly briefed on the situation and where they will be undertaking their examinations,” Director Lynn Glover said.