It’s fair to say that the private vocational educational training system has been riddled with rorts.
As was revealed by The Australian last year (here, here and here), private colleges received more than $1.4 billion in government-funded VET Fee-Help loans in 2014, four times as much as was provided to public vocational education and training providers. Yet despite this massive funding imbalance, only 14,400 students managed to complete courses at private colleges in 2014, compared with 18,400 students at TAFE and other public providers.
The private “vocational education sales industry” was also found to have targeted poor areas, providing them with “free” laptops if they sign-up to an expensive online diploma course. In the process, the private education providers have pocketed thousands of dollars in fees for students that will in all likelihood never finish their courses, courtesy of the Australian taxpayer. That is, thousands of students have been signed up to courses that they have little or no chance of completing.
As explained by Mary Leahy from the Melbourne University Graduate School of Education, the whole business model pertaining to private vocational education is busted:
- Register as a training provider and ensure your students have access to VET FEE HELP income-contingent loans.
- Sign up as many students as possible for single or double diplomas.
- The student takes on a VET FEE HELP loan to defer payment of course fees.
- The training provider receives the VET FEE HELP payment from the government.
- As long as the student is enrolled beyond the census date, the training provider is paid.
- Even if the course is never started, the provider will receive funds from the government and the student is liable for the debt…
This has given reprehensible providers a stream of revenue without the expense or trouble of providing much in the way of education.
Fees have grown, with a number of providers charging over $10,000 for a diploma… A total of $2.4 billion in VET-FEE HELP was paid to training providers in 2015 (up to November 15), a big increase from $1.7 billion in 2014.
Yet graduation rates for many providers were abysmal, well under 10%.
Other providers do graduate their students, pushing them through qualifications in improbably short times. The approach has been described as “tick and flick”.
Thankfully, the Turnbull Government is taking action against dodgy providers, developing a “hit list” of training courses set to lose public funding. From The Australian:
The department is examining a new three-band payment system to limit how much students can borrow through the taxpayer-backed scheme…
The highest loan payments would be confined to courses on an immigration-style list of workforce shortages — such as trades, computing, nursing, childcare and aged care.
A lower loan limit would be set for popular courses such as business and management, which account for a third of the nation’s vocational training enrolments.
Students could only borrow a minimum amount for low-priority courses such as aromatherapy and transpersonal art therapy.
TAFE Directors Australia chief executive Martin Riordan said the flagged changes were “music to our ears’’ and “long overdue’’.
Good to see. The implementation of demand-driven training systems across Australia was supposed to give students greater choice and make providers more responsive to students and employers. Instead, Australia has produced a wasteful system that has produced a huge Budget blow-out and poor education outcomes.
It needs to be reined-in big time.
