​VET FEE-HELP Scrapped

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5 October 2016

Today’s decision by the Federal Government to abandon the disastrous VET FEE-HELP loans scheme should be a catalyst for lifting investment in TAFE, the AEU said today.

Education Minister Simon Birmingham announced that VET FEE-HELP would be replaced by a new loans scheme from 2017, and promised far tougher standards to ensure the rorts and shonky operators which plagued VET FEE-HELP are not repeated.

VET FEE-HELP was a terrible program, which cost taxpayers $2.9 billion in 2015, and led to a drop in quality of training as low-quality private providers helped themselves to big taxpayer-funded profits by luring students into useless courses.

AEU Federal TAFE Secretary Pat Forward said that getting rid of VET FEE-HELP was a first step to reforming the sector, because all it had done was reduce the quality of courses, rip off students and saddle taxpayers with huge debts.

“We will wait and see the details of what Minister Birmingham is proposing, but the decision to scrap VET FEE-HELP is a first step to restoring sanity to the way we fund VET in Australia.

“All governments now need to admit that privatisation of vocational education and training has failed and make properly funding TAFEs a priority.

“The flawed VET FEE-HELP scheme went hand in hand with cuts to government funding for TAFEs.

“With VET FEE-HELP gone we need state and federal governments to restore funding to TAFEs to ensure Australians have access to quality vocational training.

“We need to take that a step further and ensure that at least 70 per cent of all government funding is reserved for TAFEs.

“TAFEs’ share of government funding has fallen by 24 per cent in the last eight years, as they have been asked to compete for funding with low-quality, and in some cases fraudulent, private operators.

Still questions over details of new scheme

Ms Forward said the AEU still wanted to see final details of the new loans scheme, but did not support any loans scheme that made it possible for for-profit providers to access government funds.

“There are still major questions about how the new loans scheme will operate. While banning brokers is a positive step we still need to ensure that private providers are required to meet rigorous standards, including minimum hours for courses,” Ms Forward said.

The lack of regulation of private providers has seen repeated horror stories emerge of dodgy operators signing up students without their consent, or through gimmicks such as free iPads, and landing them with huge debts for low-quality or non-existent courses.

These included people with an intellectual disability, the long-term unemployed and elderly residents of nursing homes.

Several providers have been investigated by the Australian Competition and Consumer Commission and required to payback taxpayer funds due to the poor quality of their courses.

While we are still waiting for details of the new system VET Minister Birmingham indicated today that it would include:

  • A ban on brokers signing up students on behalf of private providers
  • Loans to be capped in three bands - $5000, $10,000 and $15,000 - depending on course delivery cost.
  • Higher barriers to entry for new providers.
  • Limiting eligible courses to those deemed to provide good employment opportunities.
  • Requiring all students to be active through a national online portal
  • Private operators required to provide completion rates, rather than just enrolment

Birmingham admits TAFE outperforming private operators

In an admission that TAFEs are delivering high quality, good value education Minister Birmingham said they would not be required to apply for registration under the new scheme, whereas all private operators would be required to.

Ms Forward said that investing in TAFE was essential to restore trust in the vocational education system.

“We have seen enrolment in vocational education crash by 11 per cent in the last year – due to the loss of trust which has been created by dodgy private operators,” Ms Froward said.

“Vocational education remains the worst funded sector of our post-school education system.

“The attempt to hand responsibility to private operators through VET FEE-HELP has failed miserably.

“Governments need to abandon the idea that private VET operators can substitute for proper funding of the sector. It is now time for them to invest in TAFEs so they can continue to provide skilled graduates for industry, and ensure all students have access to a quality vocational education.”

The decision to scrap VET FEE-HELP has been praised by employer organisations and TAFEs. Representatives of private providers have admitted that reform is ‘long overdue’ but have raised concerns that the process has been rushed.

The 144,000 students currently undertaking VET FEE-HELP funded training will be able to stay on the scheme until the end of next year.