The exams are among the qualifications required for acceptance into colleges and universities in Canada.
Police say some foreign students unable to pass the exam hired a surrogate to write the test on their behalf.
To carry out the scheme, when the surrogate got to the testing centre, they presented a fake passport showing their picture along with the identification details of the person who hired them.
Police say the surrogate would then write the exam and receive a passing score, which would allow the student who paid for the service to be admitted into a college or university.
Once admission is secured, study permits for foreign students can be granted or extended by Immigration Canada.
Alan Yan, 25, Li Huang, 39, and Mengshi Yue, 27, all residents of the Greater Toronto Area, were arrested in relation to the scheme.
All three are charged with possession of a forged passport, possession of a forged document, personation at examination and personation to gain advantage.
Huang is also charged with public mischief related to providing a false name to police to divert suspicion.
The Canada Border Services Agency will be reviewing any possible misrepresentation by students who've applied for study permits.