Last month, The Australian released three articles (here, here and here) uncovering widespread rorting by private colleges. The Australian revealed that private colleges were handed more than $1.4 billion in government-funded VET Fee -Help loans last year, which was four times as much as was provided to public vocational education and training providers. Yet, only 14,400 students managed to complete courses at private colleges last year, compared with 18,400 students at TAFE and other public providers. Thus, the figures reveal that private colleges are inflating course costs but providing very poor educational outcomes.
The Australian’s Judith Sloan neatly summarised the problem as follows:
Fly-by-night operations could lure students to expensive, inadequate courses and send the bill to the federal government. Students were urged to take loans on the understanding they would not have to repay the principal…
Fairfax Media has also identified a series of rorts in the private colleges industry.
On Friday, Fairfax published a worrying report about how some in the “vocational education sales industry” are targeting poor areas, providing them with “free” laptops if they sign-up to an expensive online diploma course. In the process, the education providers pocket thousands of dollars in fees for students that will in all likelihood never finish their courses, courtesy of the Australian taxpayer.
Then on Monday, Fairfax uncovered that a federal government back-to-work scheme has been used to supply workers to a company that uses ‘boiler room’ tactics to sell expensive diplomas to the unemployed.
Today, The Australian has reported that Australian taxpayers have paid over $1 billion to 15 private colleges this year – colleges that have been found to be in breach of government regulations. Five more colleges have also failed compliance audits:
The Australian Skills Quality Authority [ASQA] has slapped conditions or threatened to deregister 15 of 22 training outfits targeted in special audits this year.
The colleges have together pocketed $1.02bn in taxpayer funding through the VET FEE-HELP scheme this year alone.
ASQA said yesterday it had told two colleges — Cornerstone Investments and the Australian Institute of Professional Education — it intended to cancel their registration. The regulator has already deregistered two providers: Unique International College and the Phoenix Institute. Both plan to appeal against the decision.
Separately, the consumer watchdog has prosecuted Unique International and Phoenix Institute, and is investigating up to eight others, over allegations that they engaged in unconscionable conduct when signing up students for costly training courses.
Thankfully, change is afoot with the Turnbull Government putting forward legislation, currently under review in the Senate. According to another report in The Australian, the new rules would:
…split payments into three tranches, based on “census dates’’ to prove a student is still actively studying.
Its legislation grants wider investigatory powers to the industry regulator, the Australian Skills Quality Authority.
And it imposes fines of up to $54,000 for each regulatory breach, potentially applied for each student affected.
Colleges would be forced to seek parental permission before enrolling teenagers, and students would get a two-day cooling-off period to back out of a training course.
Vocational Education and Skills Minister Luke Hartsuyker is considering even tighter controls, including regulating tuition fees and confining VET FEE-HELP to courses of economic benefit, such as trades, healthcare, aged care, childcare and computing.
A Senate committee is due to report on the legislation on Monday, with the new anti-rorting rules expected to take force from 1 January 2016.
They cannot come soon enough.