CANBERRA, June 1 - The Turnbull Government says the new legislation, being introduced to parliament on Thursday, will keep the gate shut on dodgy organisations who have been booted off federal funding lists.

"This is a pre-emptive strike against the rorters and shonks the Turnbull Government has shut out of the vocational loans system after we closed down Labor's failed VET FEE-HELP scheme," Education Minister Simon Birmingham said.

"We want to ensure that dodgy vocational education providers cannot transition their operations into the higher education and international education sectors."

The Government shut down the old vocational student loan scheme at the end of 2016 after it blew out from $325 million in 2012 to $2.9 billion in 2015, and replaced with a program that has tougher criteria for providers to qualify.

The new legislation makes a range of changes including allowing agencies to share information and monitor unscrupulous people moving from one sector to another, powers to cap the value and number of loans, and excluding failed applicants for six months.

AAP