Melbourne: Nearly a fifth of Australian private colleges are "permanent residency factories", a new report in the education sector has revealed.

A string of assaults on international students, particularly Indians, has affected the education sector, which is the country’s third largest export industry. The claims of exploitation of overseas students have also not helped matters.

Education Minister Julia Gillard had asked former MP Bruce Baird to review the international education sector. He released his report in Canberra on Tuesday.

Baird said the education industry had been "distorted" by unscrupulous people cashing in on foreigners' desire to live in Australia.

"We have permanent residency factories, (and) if you ask any of the good providers they'll quickly name those who they believe are the dodgy operators...

"It is those groups that we should be directing our attention to. I certainly think that they represent... about 20 per cent of the vocational sector," Australian news agency AAP quoted Baird as saying.

The report recommends the development of clear, enforceable standards, and fines for non-compliance.

"High-risk applicants... won't be allowed in. If they are medium to lower-risk, they would have to pay a higher rate of registration and they would be monitored more regularly," he said.

He suggested that foreign student hubs be set up to provide information and advocacy services and wanted the government to expand its 'Study in Australia' website to include a manual available in major languages.

Baird said, "We need to do more work in terms of social inclusion, and part of the idea of the education hubs is actually to encourage greater interaction with students and the Australian community."

Gillard said, "We're saying to international students, come, study in this country, it's a great place to study."

"But the purpose of coming here as a student is to engage in study and end up with a qualification, not with an immigration pathway," she was quoted as saying. IANS