This news comes after a report published by the Public Accounts Committee found that £3.84m of public money was given to ineligible EU students through student loans.

Amid growing concern about the amount of public money being channelled into loan funding, it has emerged that students enrolled just at St Patrick’s College accessed £96m in loan and maintenance grant funding in 2013.

The college had its Tier 2 and Tier 4 sponsor licence suspended on February 19, a Home Office official confirmed to the THE.

While the reason behind the investigation into St Patrick’s College has not been disclosed, there has been a huge increase in the amount of students enrolling at the college over the last few years.

In 2011, 50 students enrolled were claiming student loans funded by the British taxpayer. However in 2013, the number shot up to almost 7,000.

Speaking on Radio 4’s Face The Facts programme this week, Kavin Kanasagabai, who was a business lecturer at the college between 2012 and 2013, described how he believes the focus of recruitment was centred around financial gain.

“I had a student in my class who told me that he used to go round and talk to individuals on the street, at bus stops, train stations, job centres, going around asking anyone, randomly approaching people asking: “Do you want money?” Yes? Ok. They get enrolled, they’re in the class.”

He added to host John Waite, “I think that’s quite powerful when there are people without jobs. You’re just converting a need to your own advantage.”

“What I don’t accept is that the broadening of access to funding for students, so they get funding if they go to a broader range of colleges is somehow a scandal”

Furthermore, external examination body Pearson Edexcel told Face The Facts that it has sampled student work eight times in the past 12 months, and said they were all of an ‘unacceptable standard’.

The latest licence suspension at an Alternative Provider (AP) follows new rules for APs revealed at the end of January, with institutions with non-degree awarding powers now obliged to seek designation every year, while directors at APs may be subjected to ‘fit and proper’ tests by a rapid response fraud team.

However, David Willetts MP, who served as the Minister for Universities and Science between 2010 and 2014, defended the decision to open up loan and maintenance grant funding to the private sector, which happened on his watch.

“I simply don’t agree with this language of scandal,” he said. “What I do accept is that as we changed the system, there were some individual examples of abuse which we cracked down on.

“What I don’t accept is that the broadening of access to funding for students, so they get funding if they go to a broader range of colleges is somehow a scandal. I think it is exactly the opposite.”

Waite challenged Willetts, saying that £1 billion in public funding had been paid to student applicants “without anyone really knowing what sort of education qualification they are getting”.

St Patrick’s College is part of the Global University Systems network which also owns LSBF and other brands.