More than 10,000 vocational education and training students have been hit with historical debts after a computer glitch.
A system failure resulted in government loans, worth a total of $24.2 million, becoming "stuck" in the student payment system, officials say.
Most are for amounts under $2000, but about three per cent of students have debts of more than $10,000.
The loans became repayable when the beneficiary's income reached a set threshold, however they were only transferred to Australian Taxation Office accounts after a recent IT update.
More than 90 per cent of the loans relate to study in 2017, with a total of 10,252 students impacted.
Skills Minister Brendan O'Connor said he had instructed his department to conduct an investigation and attempts had been made to individually notify and offer assistance to students.
"I have been made aware that a number of historical student loans have unexpectedly been applied to students' ATO profiles," he said in a statement.
"The previous coalition government had student loans held up in its systems for several years after the relevant study was undertaken and we are still discovering and fixing instances of carelessness and incompetence.
"I am determined to get to the bottom of what happened in this situation."
Mr O'Connor said the government would make every effort to put the wellbeing of students first.
"We understand personal circumstances have to be taken into account and I have directed the department to further investigate the causes of this issue, with a focus on preventing all unfair impacts to current and former students," he said.
The minister said the government was also working with the tax office to ensure issues related to older debts were managed fairly.
Deputy opposition leader Sussan Ley said the first notices to students were issued on September 12 but the government had been silent on the issue.
"The minister has significant questions to answer. He has been silent as more than 10,000 students and 100 providers across the country received communications from his department demanding that students pay up in full or face penalties," she said.
Ms Ley said it was also possible that some debts might not be legitimate but the onus had been put on students to find out if they qualified for redress measures.
