​New Government must tackle VET FEE-HELP disaster


7 July 2016

The VET FEE-HELP student loan scheme must be abolished and a full inquiry held into the vocational education sector, as new figures show an 11 per cent drop in government-funded training places in the last year.

AEU Federal TAFE president Pat Forward said the figures were another sign that cuts to TAFEs, underfunding and the disastrous privatisation of VET were hurting students.

Student numbers fell more than 190,000 to less than 1.6 million in 2015, making a decline of almost 20 per cent since 2012.

The AEU’s submission is in response to a government discussion paper on “Redesigning VET FEE-HELP”.

Ms Forward said that whoever formed government needed to recognise that tinkering with the failed VET FEE-HELP scheme would not be enough, and it needed to be abolished.

“VET FEE-HELP is a massive failure and needs to be scrapped due to low completion rates, high rates of doubtful debt, the gap between actual course costs and fees charged to students,” Ms Forward said.

“This is the only way to stop the deliberate targeting of vulnerable and disadvantaged students by unscrupulous providers.

“The VET FEE-HELP scheme was introduced without any real consultation with the sector, which is part of the reason why it has proved to be such a disaster.

“Now is the time for an inquiry which allows discussion and debate around the purpose and future of TAFE colleges in Australia, and the level of government investment in them, as well as VET FEE-HELP.”


Ms Forward said the cost of VET FEE-HELP had ballooned to over $4 billion per year, almost as much as the $5.2 billion in direct government funding to vocational education.

The Federal Government’s Discussion Paper admits that, far from leading to a more accessible and equitable VET system, VET FEE-HELP has resulted in.

  • The targeting of vulnerable people through cold calling or door knocking of neighbourhoods of low socio-economic status
  • Rapid and unsustainable growth, as a result of VET FEE-HELP in public borrowings in the HELP scheme
  • Evidence that a large proportion of VET FEE-HELP loans are not expected to be repaid
  • Significantly lower completion rates for VET FEE-HELP courses compared with the VET sector as a whole
  • Significant increases in the cost of courses as a consequence of VET FEE-HELP, and therefore of higher debt to students

“It is hard to imagine a more comprehensive failure of public policy,” Ms Forward said.

“It is clear that VET FEE-HELP has reduced quality, increased costs for students, delivered huge profits to substandard private providers and led to a proliferation of courses with no links to industry needs or job outcomes.

“VET FEE-HELP has not helped students get a quality vocational education, it is part of a broader policy of cutting government funding to VET and turning it into a user-pays system.

“This is not in the long-term interests of students, or the Australian economy.

“We need to stop pouring money into VET FEE-HELP and return to a system where governments properly fund vocational education.

“This must include a guarantee that 70 per cent of funding is reserved for TAFEs to ensure they maintain their position at the heart of our vocational education system.”