Sydney college mis-sold diplomas to vulnerable students, watchdog says

Only a tiny fraction of the college's students graduated in the second half of last year

A private college in Sydney has been accused by Australia's consumer watchdog of mis-selling diploma courses to vulnerable students, earning itself millions of dollars in federal loans.

The watchdog says Unique International College misled students about loan repayments and the cost of courses, calling its conduct "unconscionable".

Media reports say it will ask the college to repay A$57m (40.6m; £26.6m) in government funding.

The college has not yet commented.

A claim against the college has been filed in the federal court following an investigation by the Australian Competition and Consumer Commission (ACCC) and New South Wales Fair Trading.

According to a statement on the ACCC's website, the college enrolled more than 3,600 students in diploma courses during the 2014-15 financial year, which earned it A$57m in government funding.

But fewer than 3% of students graduated in the second half of last year.

'Misleading or deceptive'

The ACCC alleges that college sales agents went door-to-door and offered free laptops as an incentive to sign up for online courses.

Many of the people it targeted were from Aboriginal communities in some of the most disadvantaged areas of New South Wales. Some were illiterate or with disabilities.

Those alleged to have been targeted include a 19-year-old disabled man, under the care of his grandmother, who was signed up for a student loan despite not being informed of the course or the college, Fairfax media reports.

According to court papers, students would be asked to sign forms that some did not understand, and were not made aware that they would be liable for up to A$25,000 in debt repayments under the government's VET FEE-HELP scheme once they were earning more than A$54,000.

The ACCC accuses the college of engaging in "misleading or deceptive or unconscionable conduct" when selling the diploma courses.

"It is important that colleges are upfront with prospective students and clearly explain the price of the courses they are offering," said NSW Fair Trading Commissioner Rod Stowe.

"Consumers need to be able to fully understand what they are agreeing to before making a decision to sign up to a course. The VET FEE-HELP loan incurred by students is a lifetime debt."