SWINDON College has stepped in to help more than 500 students whose funding was cut off by the closure of the Individual Learning Account (ILA) scheme.
The college said it would honour the payment of all fees for students affected by the Government's surprise move.
Its principal Mike Hopkins promised that no student already enrolled at the college would have to pay any shortfall in their fees as a result of the collapse of the scheme, provided that their ILA paperwork is complete.
"My first concern is for those students who feel they have effectively had the rug pulled from under their feet," he said.
"They will not be required to pay any shortfall in their fees."
Students and course providers were warned earlier this month that the Government would be closing the scheme on December 7.
But last week, the shutters came down without warning, leaving many students in difficulties.
They found the ILA website had closed, and a recorded message had been left on the telephone help line.
Nationally, the scheme has been the subject of widespread fraud, and further police action was given as the reason for the sudden shutdown.
Although Swindon College potentially stands to lose as much as £37,000 because of the ILA closure, Mr Hopkins said it was important that it acted quickly to make sure students could continue with their studies.
"The college remains absolutely committed to the principle of lifelong learning," he said.
"It will continue to work with relevant organisations on support schemes in post-16 education."
The Government launched the ILA scheme as a key part of its policy to encourage lifelong learning.
Anyone aged 19 or over could apply for an ILA card which could be used to pay for up to 80 per cent of fees on a wide range of courses, but particularly in computing and maths.
Some 530 students had registered for ILA courses at Swindon College, but the £37,000 shortfall from their fees is not expected to affect the college's other services in any meaningful way.
Mr Hopkins and other college principals are now likely to form an alliance to claim their money back from the Learning Skills Council, the Government body responsible for running the ILA scheme.
Comments: Our rules
We want our comments to be a lively and valuable part of our community - a place where readers can debate and engage with the most important local issues. The ability to comment on our stories is a privilege, not a right, however, and that privilege may be withdrawn if it is abused or misused.
Please report any comments that break our rules.
Read the rules hereComments are closed on this article