Sydney: Coupling paper qualifications with green cards has helped turn Australia's higher education sector into an industry bigger than tourism.

Linking diplomas with permanent residency visas has helped draw in almost 500,000 foreign students and annual revenues of 15 billion Australian dollars ($12 billion).

But a bonanza that saw the fees from foreigners generating 20 percent of the higher education sector's income is coming to an end.

The lax regulation that allowed unscrupulous operators to flourish damaged Australia's brand and made the US, Canada and Britain more attractive to those wanting prestigious degrees.

A crackdown on shady operators coupled with tougher immigration rules is also crimping numbers because colleges can no longer promise that their diplomas will lead to a visa.

"We're just on the threshold of dealing with all the social, immigration and other issues that arise from allowing this juggernaut to go unchecked," said Bob Birrell, a demographer at Melbourne's Monash University.

Birrell has long railed against a system where a qualification from a local institution counts toward getting a visa.

In recent years, diplomas in cookery, hairdressing or other vocational disciplines were worth enough points to deliver permanent residency.

It wasn't long before colleges were promising youngsters from abroad that a course in cookery would come with a visa without the bother of actually working in a kitchen.

Most of the growth was at the vocational training level, which was likewise where most of the money has been made and most of the problems are emerging.

Sydney's Sterling College, for instance, went bankrupt in July, leaving its 500 mostly Indian students in the lurch.

"The people who run this place should be jailed," an aggrieved Gaurav Garg said after turning up for lectures only to find a closure notice pinned to the front door. "They've cheated us, and the Australian government has been asleep."

Garg, 29, is hoping to complete his studies elsewhere before his student visa expires or his money runs out.

Five years ago, there were about 4,000 Indian nationals enrolled in vocational training courses. Now, the number is 52,000. Indians, second to Chinese in overall foreign student numbers, are the biggest ethnic block in vocational training. IANS