They had been recently audited by the national regulator and were found to be compliant, with the largest college still under investigation.

As news of the closures trickled to concerned students on Thursday, former employees revealed the colleges recruited students from foster homes, homeless shelters, women's refuges, aged care homes and drug rehabilitation centres.

Aspire College of Education, The Design Works College of Design, the Australian Indigenous College and the affiliated RTO Services Group and National Training and Development were placed in voluntary administration on Tuesday, with at least 500 staff affected.

Students arrive at Aspire College of Education to find it closed. Photo: Justin McManus

Aspire College has 20 campuses across Australia, including one in Broadmeadows, where the blinds were drawn on Thursday.

Business student Ahmet Guler said he had "no idea what was going on".

He runs a popular kebab shop next door, on a tiny strip of Pascoe Vale road, which is teeming with training colleges and job service agencies.

The three colleges are owned by Global Intellectual Holdings, one of the country's largest vocational education company, which is also in administration. Global Intellectual Holdings made $83 million in revenue in the year to June 2015 and there are concerns more colleges associated with the company at risk.

A few doors up from Mr Guler's shop is Keystone College – a training college affiliated with the large company that is subject to a regulatory audit.

While company records show Keystone is still registered, the doors of the college were suddenly locked at lunchtime on Thursday, and the lights inside were turned off. A teacher from the college said his pay had been "frozen", and he was told to take his teaching equipment home.

The collapses follows a federal government crackdown on the scandal-plagued vocational education sector, including bans on inducements like free laptops and freezing payments to private colleges to 2015 levels.

Australian Indigenous College student Bianca Chatfield knew something was wrong when the college laid off its cook and campus auntie in early December. The college –which predominantly enrols Indigenous students – then stopped marking her work.

The Brisbane mother was close to finishing a diploma in business and has been left with $16,000 in VET FEE-HELP debt.

"They are teaching a diploma in business but they didn't have business ethics," she said.

It comes as the Victorian government starts a second quality blitz on training colleges, this time focusing on high risk qualifications like security, early childcare education and building and construction courses. The state government has withheld $12 million in funding while it investigates 12 providers with short course durations, high dropout rates and other anomalies.

Since July last year, the Victorian Education Department has started 43 investigations into private colleges and is reclaiming $30 million in funds.

Victorian Training and Skills Minister Steve Herbert called on the federal government to take a more "interventionist" approach. "They need a heavier hand. They need to review how they fund VET FEE-HELP, how they distribute the money and whether they continue funding courses with very low completion rates."

Aloi Burgess, who runs at least 10 different education providers, and his co-director Roger Williams did not return calls on Thursday.

Vocational Education and Skills Minister Luke Hartsuyker said his first priority was the welfare of students.

"There are procedures in place for these situations where providers suddenly close their doors."

VET-FEE HELP providers are required to have tuition assurance, with gives affected students assistance to move to another provider or to receive a refund for incomplete studies.

He said he was unsure how many students had been affected.

With Eryk Bagshaw