Parts of Careers Australia may be picked up by other training providers so services can continue now the company has entered voluntary administration, federal Education and Training Minister Simon Birmingham says.
Apprentices have been told to stop work immediately and staff have been stood down as administrators David McEvoy and Martin Ford of PPB Advisory go through the company's books.
Senator Birmingham said the education and training provider had tuition assurance protection through TAFE Directors Australia, which would protect students if trading ceased.
"It's important to draw the distinction that at present they've entered into voluntary administration," he told reporters in Sydney on Friday.
The government's first consideration was for students and staff and it had been in touch with administrators to make sure support was in place, he added.
There have been discussions about how different parts of the organisation might continue to operate in the future.
"It is possible that some of them could be picked up by other training providers of repute and continue to provide training services around the country," Senator Birmingham said.
He blamed Labor's troubled VET FEE-HELP scheme that saw costs blow out from $325 million in 2012 to $2.9 billion in 2015 as providers raced to sign up students for loans, in many cases for courses they had no ability or intention of finishing.
Careers Australia has 13 campuses in Sydney, Melbourne, Brisbane, Perth, Adelaide and the Gold Coast.
The Electrical Trades Union said the collapse affected 15,000 students and 1000 staff just six weeks after the company was stripped of its accreditation to deliver VET-funded courses.
Students and staff had been promised training would continue as usual for the remainder of 2017, the union said.
ETU national apprentice officer Mark Burgess said while the union was happy to see the end of Career Australia's "substandard apprentice program" it would have a huge impact on staff and apprentices.
"The union's number one priority is to help these electrical apprentices find alternate training providers as soon as possible so that they can continue their trade training with as little disruption as possible," Mr Burgess said on Friday.
Victorian Training Minister Gayle Tierney called on the federal government to step in to help out affected students.
The administrators are expected to update staff and students next week.
