Vocation's new chief executive, Stewart Cummins, is learning some tough lessons in cleaning up the mess he inherited. 1100 student qualifications are being withdrawn and $8 million repaid. Photo: Sasha Woolley

Embattled education group Vocation will provide a fresh financial forecast for its slimmed-down operations in late May after finding itself in hot water again, with the firm paying back $8 million in funding and scrapping the qualifications of 1,100 students as it tidies up legacy issues from its controversial Victorian businesses.

Vocation announced early on Monday it would repay about $8 million in funding to the Victorian Department of Education and Training over the next 18 months and that 1,100 students would have their qualifications withdrawn because the quality of the training wasn't up to scratch.

Chief executive Stewart Cummins, who took over the running of the company in late 2014 and embarked on a series of asset sales to appease nervous banks, said the company had been working with the Victorian Department of Education and Training over the past few months, along with the Victorian Registration and Qualifications Authority.

"It's obviously disappointing but it's part of the game plan that was needed to re-set the business," Mr Cummins said on Monday.

Vocation has responded to the findings of fresh regulatory audits which happened in early 2015, and to address the legacy issues from the closure of the controversial BAWM training business. There were also some legacy issues related to the Learning Verve business.

Mr Cummins said the financial impact of the repayments has already been covered by the provisions taken by Vocation in its first half-results for 2014-15. Vocation intends giving a fresh profit forecast to the market soon. 

"Trading is stable generally," he said, but pointed out that there was a lot of focus on internal issues as the company fixed the legacy issues.

He said the company has reached an in-principle agreement with the Victorian department for the recall of 1100 student qualifications. Mr Cummins said each of the cases is different for the affected students, but in general they are able to re-enrol with other providers and claim credit for parts of their courses.

Mr Cummins said Vocation felt it was right to encourage them to go to a rival training organisation because of the issues they encountered. "We felt it was the right thing to do. It's cleaner to be able to do that".

The withdrawal of qualifications applies to students who undertook four programs during 2014 in Aged Care, Children's Services, Business Administration and Competitive Systems and Practices. They also apply to students who did two specific units in First Aid, and Assist Clients with Medication.

Mr Cummins said Vocation had undertaken a comprehensive process to identify and address compliance issues, and had fully adhered with directives from regulators.

Vocation, which floated on the Australian Securities Exchange in late 2013, lost more than $700 million in sharemarket capitalisation in the space of a few weeks after an initial brush with regulators was revealed in September, 2014, shredding investor confidence because of poor disclosure by the company. The share price continues to languish at around 14.5¢ after having hit $3.40 in early September, 2014. But it has been as low as 6.8¢.

It sold the biggest business in its stable, the natural health training courses business, Endeavour College of Natural Health, for $75 million in March, 2015 to British-based global company Study Group, to help stabilise its balance sheet. The banking syndicate to Vocation, comprising National Australia Bank, Westpac and Commonwealth Bank, insisted on hefty asset sales before they would agree to continue as financiers.