Senate Inquiry report shows why Federal Government's VET FEE-HELP changes won't stop dodgy providers

15 October 2015

The Federal Government’s so-called crackdown on dodgy providers in the Vocational Education and Training (VET) sector, will make no improvement to what is a fundamentally broken system, the AEU said today.

A Senate Inquiry into the funding of VET released today has found serious flaws in the VET FEE-HELP scheme, and stated that its continued operation poses an “unacceptable risk to the Commonwealth”.

The Inquiry has also found that controls on providers have been “unacceptably loose” and there is “no effective price control” in the private VET system.

AEU Federal TAFE Secretary Pat Forward said the new standards would make no difference unless regulators were given the capacity to enforce them, and while dodgy providers still had lucrative incentives to mislead students.

She said the Government should heed the Senate Inquiry’s call for a review of VET FEE-HELP, but should go further and immediately stem the flow of public funds by halting any new VET FEE-HELP sign-ups.

“If the Government is serious about stamping out dodgy behaviour it needs to go a lot further than fiddling around the edges,” Ms Forward said.

“Regulators are overwhelmed and do not have the capacity or resources to enforce the regulatory standards which currently exist.

“Fees in the VET sector remain completely unregulated, in total contrast to HECS fees for universities. Some of our most vulnerable students have incurred debts of tens of thousands of dollars for worthless qualifications.

“We have seen VET FEE-HELP debts go from $25 million in 2009 to an expected $4 billion in 2015, as State Governments shift the cost of training onto students and taxpayers through loans.

“Three-quarters of VET FEE-HELP loans are going to private providers, and this is channelling funds away from TAFEs.

“We need to ensure that at least 70 per cent of funding for VET is reserved for TAFEs to ensure that they can remain at the heart of the training system. If we lose the quality, capacity and experience of TAFE, the standards of vocational training in Australia will fall.