Government ‘crackdown’ won’t solve VET-FEE HELP crisis

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25 August 2016

Today’s announcement by the Federal Government that it will try to crack down on private providers abusing VET FEE-HELP – the fourth crackdown in two years – won’t fix the massive rorts in the sector, the AEU said today.

AEU Federal TAFE Secretary Pat Forward said the Government needed to take real action including a total suspension of VET FEE-HELP and restoring funding to TAFEs which had been slashed as part of the VET privatisation agenda.

“Tinkering at the edges of VET FEE-HELP has done nothing to stop the massive rorting that has gone on, and the drop in the quality of training being delivered to students,” Ms Forward said.

“We need to immediately cut off the supply of funding to for-profit providers, because they are the ones driving the practices which are lowering the quality of training, ripping off taxpayers and damaging the reputation of VET as a whole.

Ms Forward said new figures from the National Centre for Vocational Education Research showed a huge drop in Government funding to TAFEs.

“Our analysis of the new data shows funding to TAFEs has been cut by 24% in 2015, compared to a 1% cut in government subsidies to private providers,” Ms Forward said.

“Campuses are closing and insufficient funds are available to deliver courses, and at the same time billions of dollars are being diverted to low-quality private providers through VET FEE-HELP.

“The answer to the VET crisis must involve reserving at least 70 per cent of VET funds for TAFEs, so that they can continue to deliver quality courses for students.

Education Minister Simon Birmingham today admitted that there were huge problems with the $2.9 billion VET FEE-HELP student loans scheme, and said the Government would implement tougher restrictions from 2017, with details yet to be worked out.

Ms Forward said the key issues were the deregulation of VET and the lack of accountability for providers, which has allowed private operators to make huge profits at taxpayer expense.

“The cost of VET FEE-HELP has ballooned to $2.9 billion a year. 84 per cent of VET FEE-HELP funds are going to the for-profit sector, which has a student completion rate of just 8 per cent. How is this giving the taxpayers value for money?

“Privatisation has done nothing to increase quality or access to VET. Instead it has led to plummeting confidence in the sector, students being ripped off and private operators raking in big profits at taxpayer expense.

“The Federal Government still hasn’t even mandated a minimum number of hours that private providers need to deliver. Many students are not getting the hours that they have paid for.

“TAFEs cannot compete on a level playing field with private providers that are allowed to offer sub-standard course taught in a fraction of the time of a TAFE course.

“We have recently seen the Victorian Government ban 18 private providers from receiving any State Government subsidy, yet the majority of these are still able to get taxpayer funds through VET FEE-HELP.

“The Federal Government doesn’t even know how much it costs to deliver VET courses. We need a complete review of VET and TAFE - so the government can set funding levels which have some relationship with the cost of delivery, rather than allowing private providers to charge what they want.”

“The reputation of the whole VET sector is being damaged by the lack of action on private providers. We have seen an 11% decline in enrolments which means that students and industry are missing out on training that is essential to the economy.

“It will take a lot more than talk from the Federal Government to fix this debacle.”