The Sydney Film school is facing an exodus of students after the Federal Government took away their access to Commonwealth loans.
It is part of a crackdown on the funding of private colleges under the Federal Government's new Vocational Education Loans Scheme (VET).
"It's catastrophic for us," said the Director of the Sydney Film School, Ben Ferris.
"There's going to be a huge proportion of our local students who will go elsewhere."
From next term, the college's students will not be able to get a HECS-style loan and will have to pay $19,000 upfront.
Mr Ferris said 40 per cent of students could not afford the fees.
Caitlin Redmond is one of them.
"I'd love to be able to stick to my passion and I'd love to be able to stay here and do what I love to do but I just don't know if that's what I'm going to be able to do," she said.
The Federal Government has tightened the eligibility criteria for the VET Loans Scheme, largely to restrict access by questionable providers.
Colleges are now assessed according to their financial viability and the completion rate and employment rate of their students.
Sydney Film School 'isn't one of these shonky providers'
Earlier this year, Careers Australia went into voluntary administration after it was denied access to the loans.
Mr Ferris said it was unfair that the Sydney Film School had been affected by the changes.
"Sydney Film School is definitely not one of these shonky overnight providers," he said.
"We've been around for 13 years and we've been delivering really high quality education in that time and frankly, it's quite insulting to be tarred with that same brush."
Vocational Education Assistant Minister Karen Andrews said the changes were designed to "protect taxpayers and students by ensuring they are enrolling in courses that lead to good employment prospects".
"Under the program, training providers must provide positive outcomes for students," Ms Andrews said.
"Sydney Film School did not meet the criteria to be approved."
