Caulfield Grammar School has been rocked by allegations that a VCE student hacked into a teacher's computer in order to cheat on high-stakes assessments.

The prestigious private school is investigating a Year 12 student over allegations that that they "gained improper and early access to assessment tasks while studying VCE Unit 3-4 Business Management" last year, principal Reverend Andrew Syme told The Age.

It is understood the student hacked into their teacher's computer to gain early access to their school assessments, called School Assessed Coursework, or SACs.

Reverend Syme said the school has contacted the Victorian Curriculum and Assessment Authority to inform them of their investigation.

"Caulfield Grammar has clear policies for its students whilst undertaking coursework in the VCE and the investigation is continuing," he said

"The VCAA has fully supported the school's approach."

A source who did not want to be named said Caulfield students were disappointed when they found out about the alleged cheating.

The source said the alleged cheating was "terrible," even if the results were unaffected.

Students sit a number of these in-house assessments throughout their VCE years. Their performance on the tests provide a pre-determined grade, or a rank.

A high rank serves to boost a student's final mark.

The VCE watchdog investigated 38 alleged breaches of exam rules in 2014, and punished five students for "serious breaches" of VCE exam rules, including two students who copied their classmates' multiple-choice answers.

Cheats who had been found to use mobile phones to search for answers and copy their classmates' work had their VCE grades downgraded.

Serious cases of cheating are referred to the Victorian Curriculum and Assessment Authority Review Committee, which conducts a hearing to determine an appropriate penalty.

The repercussions range from reducing the students' marks to receiving reprimands or a caution where there was "no intention to cheat".

A former VCE student at another school told The Age last year how they cheated in their in-house VCE school assessment, calling their method the "headphones-in-sleeve trick".

Before the test, they recorded themselves reading out a pre-marked essay, which they were asked to reproduce in an exam.

The student secretly played back the recording while they were sitting the exam, and transcribed it.

Research by Monash University's professor of education, Neil Selwyn, warned school students were routinely using their teachers' passwords, setting up their own networks or learning hacking techniques to access websites that had been blocked by the Victorian Department of Education's filtering software.

Nearly 60 per cent of 1200 Victorian secondary students surveyed by Monash University researchers have admitted to bypassing internet filters, mostly to use social media sites at school.

Similarly, Associate Professor Phillip Dawson, who is the associate director of Deakin University's centre for research in assessment and digital learning, said hacking was a serious risk at schools.

He said schools needed to better protect their software, especially when certain tests such as NAPLAN were going online.

Do you know more? timna.jacks@fairfaxmedia.com.au