The future of Telford is now in the Government's hands.
However, the uncertainty has frustrated some potential students, including those now unable to request student financial aid.
Taratahi, which ran the Telford agricultural training campus near Balclutha, was placed in interim liquidation at the request of its board last month.
Southern Institute of Technology (SIT) chief executive Penny Simmonds said it submitted its proposal on Friday to Education Minister Chris Hipkins to assume operations of the Telford course.
Students are unable to apply for Government loans and allowances for the course while it is in limbo.
St Bathans woman Sarah Read, whose son applied to study at the campus this year, said she was ''shocked'' by the letter StudyLink sent them last week.
It said he could not get financial assistance because he had ''withdrawn'' or was no longer attending the course.
''At no time have we said to StudyLink we're withdrawing from Jack's place at Telford, which he's worked hard over the past year to prepare for and secure.''
The family would still ''love'' him to take the course, she said.
''All we've had to go on are the news stories because there's no-one manning the phones at Taratahi or Telford due to the current situation. So our confidence is pretty low that he'll be starting on February 4.''
Ministry of Social Development client service delivery general manager Jason Dwen said letters were sent to about 40 prospective students planning to study at Taratahi courses, including Telford, declining their requests for student financial aid.
The letter to Jack Reid was a generic system-generated letter sent to let him know financial aid would not be possible, Dwen said.
A ministry spokeswoman said many of those who could not currently apply for student allowance because of uncertainty would be eligible for other financial assistance.
Clutha-Southland MP Hamish Walker said the uncertainty could lead to students dropping out, which could make the course unviable.
