Fraud in higher education: Why Australia’s universities & higher education providers are a prime target

Australia’s higher education sector is one of the nation’s largest export earners, contributing around $51.5bn annually and educating 1.68 million students across 42 universities. But the same features that make it valuable such as vast personal data holdings, heavy reliance on international fee revenue, decentralised procurement ,and a culture built on trust also make it one of the most exposed sectors in the country.

The lesson was made plain in Victoria’s own backyard between 2013 and 2015, when a Warrnambool training company invoiced South West TAFE more than $1.8m for engineering training that was never delivered, with a parallel scheme netting a further $221,000 from Bendigo’s Kangan Institute. As government funding revenue fell from 55% in 2022 to 45.6% in 2024, dependence on fee and third‑party revenue has surged, concentrating both financial and integrity risk. For Boards and executives, fraud has moved beyond a peripheral concern to become a governance issue spanning admissions, research, payments, and payroll.

Why this requires robust oversight

Fraud in higher education rarely looks like a single large theft. It typically begins with a small control weakness nobody noticed, a provider who was never checked, a document that wasn’t verified, and an enrolment that was never real.

South West TAFE paid $1.8m for training that never happened because, as IBAC found, TAFE did not conduct any meaningful oversight of the training outsourced on its behalf, and an insider had recorded the unqualified provider as appropriately credentialled. Universities are complex, federated organisations where thousands of transactions, admissions, and grants flow through devolved faculties and third parties, each with their own processes. That complexity is precisely where fraudsters operate. The reputational damage and the misappropriation of public funds routinely exceed the immediate cash loss.

The fraud risks we see most in the sector

Admissions & qualification fraud

Just as South West TAFE never verified its provider’s credentials, universities face forged qualifications at the front door. In December 2025, authorities uncovered a nationwide fraudulent degree ring in India, seizing almost 100,000 fake degrees linked to 22 universities; Home Affairs subsequently raised four South Asian countries to Evidence Level 3, citing ‘emerging integrity issues.’ The University of Sydney detected more than 250 fraudulent applications in a single year up from just 15, many using fake diplomas and forged English language tests.

Third‑party delivery, ‘ghost colleges’ & visa‑fee rorting

The South West TAFE scam is an archetype, government money paid for training that was never confirmed to have taken place by using falsified enrolment forms and assessment workbooks the operators themselves called a ‘sausage factory.’ The same ‘pay‑without‑verify’ gap drove the VET FEE‑HELP disaster (an estimated $1.2bn in loans issued improperly across 2014–2015) and today’s ‘ghost colleges.’ As of late 2025, ASQA was handling 174 serious matters, 68% involving fraud including cash‑for‑qualifications schemes and fabricated assessments.

‘Ghost students’ & financial‑aid fraud

TayTell enrolled real people including already qualified Jetstar engineers without their knowledge to justify invoices. The modern equivalent fictitious or non‑attending identities created to extract funding is accelerating with online enrolment, with overseas regulators uncovering tens of millions in fraudulent aid and penalties running from $500,000 to over $10m per institution.

Research & grant fraud

In Australia’s first criminal convictions for academic fraud, University of Queensland researchers Bruce Murdoch and Caroline Barwood fabricated research that was never carried out, then used it as the basis for fraudulent grant applications; UQ was forced to return funds and retract publications. ‘Publish or perish’ pressure remains a key driver of data manipulation and fabrication.

Procurement fraud & conflicts of interest

The South West TAFE case turned on an insider who processed an unqualified provider through the system. Devolved purchasing and heavy consultant spending create fertile ground; the ANU spent around $54m on consultants in 2023, with contracts later revealed to have gone to a firm run by a friend of the Chancellor. Victorian audits have separately identified supplier-related fraud, such as false invoices and altered bank details, as well as undeclared conflicts of interest, contributing to multi-million-dollar losses where data analytics was not used to detect red flags.

Payroll & insider fraud

Universities employ tens of thousands of staff, and payroll remains a classic area of exposure. Ghost employees, unauthorised bank-detail changes, fictitious overtime, and payroll redirection can all occur when insiders who understand the controls exploit gaps in the system.

Contract cheating & blackmail

In February 2026, TEQSA warned all providers of aggressive commercial cheating services now operating on campus, coercing students through blackmail and exposing them to identity theft a fraud and welfare risk combined.

Warning signs boards and executives shouldn’t ignore

• Third‑party or subcontracted delivery paid without independent confirmation it occurred.
• Providers, trainers, or staff whose qualifications were never verified.
• Enrolments with no genuine student engagement or attendance.
• An insider processing approvals, records, or database entries without oversight.
• Pressure to secure agreements or hit targets in the wake of funding cuts.
• Supplier or staff bank‑account changes processed without independent verification.
• Anomalies surfaced by outside parties (students, suppliers) rather than internal controls.

Questions every university board and executive team should ask

• Do we independently verify that outsourced or subcontracted training actually took place before paying?
• How do we confirm the qualifications of providers, trainers, and staff, and who checks the checker?
• Can a single insider award, record, or approve without independent review?
• Are admissions, enrolments, and student identities genuinely validated?
• Do we use data analytics proactively to detect red flags before funds or contracts are committed?
• When did we last run a fraud risk assessment across admissions, third‑party delivery, research, procurement, and payroll?

How SW can help

SW’s forensic specialists provide independent, experienced, and objective investigations that stand up to scrutiny. We work collaboratively with People & Culture, in-house legal, and external advisors to deliver timely, robust, and fair outcomes, no matter how sensitive the matter. Our support includes:

• independent workplace investigations and serious employee misconduct reviews
• bullying, harassment, and discrimination investigations
• conflict of interest and nepotism reviews
• misuse of corporate IT systems and social media reviews
• whistleblower and protected disclosure investigations
• code of conduct and ethics breach reviews
• fraud risk assessments, control reviews, and investigation training for in-house teams.

Talk to us

Anthony Hodgkinson, Partner – Fraud & Forensics, has more than 30 years’ experience in fraud and corruption risk management and forensic investigations. To discuss how SW can support your team, reach out to your SW advisor or contact Anthony directly.