Sydney, July 31 - Following the closure of a Sydney college where many Indians were studying, the Australian government has assured foreign students that they will be granted 'a comparable place to complete their course' or a refund in fees.

Financial troubles forced the Sterling College here to suddenly close down, jeopardising the futures of more than 500 people, including many Indians. Their courses have stopped and they face the loss of thousands of dollars in fees.

It is the third major private vocational college in the country to close down in the last 18 months.

Australian Education Minister Julia Gillard said Friday that foreign students in colleges that close down will be compensated.

'...the Australian government stands behind the scheme and our guarantee is clear, if an international student is enrolled in a college that closes for whatever reason, we will find them a comparable place to complete their course or we will refund their fees.'

No one was willing to underwrite the fund set up by the government to cover the transfer of students if their chosen college closes, a media report said.

Gillard said the scheme was formerly insured by AIG that has been hit by the global financial crisis.