Four academics from RMIT University have been stood down after allegedly charging students to sit online tests.
The major Melbourne university has now called in auditors to investigate the scandal.
College of Business students were told they had to purchase textbooks written by their lecturers to access the mandatory tests.
These textbooks were sold on a website which Fairfax Media has found is owned by an RMIT lecturer.
The site sells textbooks written by a number of RMIT Business lecturers.
Business student Adam Yehia repeatedly raised concerns with the university about what he said was an "unethical as hell" practice.
"As part of the course, about 50 per cent of our tests are done online and they are done through that website," the 20-year-old said.
"You can only access your online tests by buying the textbook".
Earlier this year he bought a $52 online textbook from the site which was written by his lecturer.
When students bought a book from the site they received a password, which they then used to access the tests.
Mr Yehia said students asked their lecturer if there was any other way of obtaining the test.
"He would say 'no, you have to buy the textbook'."
Another business student, who did not want to be named, also raised concerns about the situation.
"Your grades are behind a paywall and your money went into the course coordinator's pocket," he said.
Another student, Renata Majdandzic, said she only bought a textbook from the site so that she could sit her tests.
"I just wasted $60 on a book for nothing," she said.
"I never even looked at these books but we have to pay for them just to do a test that should be included in the [university] fees".
RMIT's pro vice-chancellor of business, Professor Ian Palmer, said auditors PWC were investigating the conduct and four staff had been stood aside on full pay.
He said students who were taught by the four academics had not suffered any academic disadvantage.
"There is no suggestion that the materials or tests were lacking in quality - rather, the alleged unauthorised sale of e-books in order to do online quizzes appears to go against university policy," he said.
"While academics are encouraged to publish and promote their work, materials and assessments must comply with University governance arrangements."
RMIT would not confirm whether the academics involved could face dismissal for their conduct.
National Union of Students president Sophie Johnston said the academics had abused their position of authority.
"This is a complete breach of trust. Students are paying a lot of money to attend university," she said.
"It is concerning to think that it didn't just happen in one course but multiple courses."
She said textbooks were already a huge expense for students.
"Students are grappling with huge costs of living and the cost of textbooks are an added pressure.
It can be the difference between being able to complete your studies or not."