TAFE students are worried that they will end up with massive university-style debts at the end of their courses under reforms to the sector.
The Smart and Skilled reforms, announced by NSW Education Minister Adrian Piccoli on Tuesday, will see TAFE NSW forced to compete with private providers for funds from 2014.
Only courses on a government-approved "skills list" will be eligible for subsidies at public or private colleges while, instead of an annual fee, students will pay a fee per qualification.
Save TAFE Illawarra spokeswoman Kate Morris said students were still reeling from the recent announcement that TAFE fees would rise by 9.5 per cent from next year, when courses in fine arts would only be offered on a fee-for-service basis.
"Since 1997, 48 per cent of the TAFE budget has been cut in NSW - that's $926 million," she said.
"It just seems like death by one thousand cuts and I think the announcement of these 'reforms', which will come into effect in 2014, will cause further damage to TAFE."
Mr Piccoli said student loans "similar to those offered to university students" would be available for approved government-subsidised diploma and advanced-diploma qualifications.
However, Ms Morris said TAFE often catered to a different market than university, and the idea of going into debt would stop many from obtaining training.
"Under the VET [Vocational Education and Training] Fee-Help student loan scheme, TAFE students will end up with massive debts," she said.
"A lot of people who do TAFE courses do so as a way to get back into society, to get back into the workforce after retrenchment, unemployment or motherhood - they do not need any more barriers to education.
"The government might be saving money in the short term, but it's going to be expensive for the community in the long run as people who may have found work, or even started businesses and employed others, will be left at home."
NSW Teachers Federation Illawarra TAFE organiser Terry Keeley said students in NSW were already facing "horrendous fee hikes" for some courses, and the reforms would exacerbate that.
"In some diploma courses there will be a 300 to 500 per cent increase in fees," he said.
"This will mean many courses, such as fine arts, will eventually not be offered at all."
Mr Piccoli said Smart and Skilled would make the training system more responsive to business and industry, and would enable TAFE institutes to become more "locally responsive, flexible and autonomous".
However, Shellharbour MP Anna Watson demanded that Mr Piccoli provide a guarantee that the reforms would not negatively impact on Shellharbour and Dapto TAFE campuses and requested a meeting with him.