Private college collapse reveals failed system

By Leith van Onselen

The next sorry chapter in Australia’s private vocational education scam has seen thousands of students left in limbo and carrying large debts as at least four colleges have collapsed. From The Age:

Aspire College of Education, The Design Works College of Design, RTO Services Group and the Australian Indigenous College were placed in voluntary administration on Tuesday. Aspire alone has about 20 campuses around Australia.

All of the colleges are owned by Global Intellectual Holdings, which is also in administration with debt owing to ANZ Bank.

The fallout follows a federal government crackdown on the scandal-plagued vocational education sector, which included bans on inducements like free laptops and freezing funds to private colleges accessing VET FEE-HELP to 2015 levels…

There has been widespread rorting of VET FEE-HELP…

“There’s thousands of students that have been left high and dry,” a source said…

The source said the colleges had exploited the VET FEE-HELP scheme by enrolling as many students at possible, with little regard to their ability to complete the course.

“They would recruit as many students as possible. They weren’t interested in the students or their ability to complete the course. They were interested in anyone that came out of the dole office, single mums, and they targeted poor areas.”

Seriously, what further evidence do we need to show that the private vocational education system is busted?

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, rorted system that has produced a huge Budget blow-out and poor education outcomes.

As was revealed by The Australian late 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.

Amazingly, despite these clear failings, the Turnbull Government is still planning to overhaul TAFE funding so that they must compete on an even keel with private vocational education providers.

What’s the definition of insanity again?

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Unconventional Economist


    • 2000 years ago the Roman orator Cato noted “There must be a vast fund of stupidity in human nature or else men would not be caught, as they are, a thousand times over, by the same snares. while they yet remember their past misfortunes, they go on to court and encourage the causes to what they were owing and which will again produce them”.

      Charles Darwin used to say “that whenever he ran into something that contradicted a conclusion he cherished, he was obliged to write the new finding down within 30 minutes, otherwise his mind would work to reject the discordant information”.

  1. Last I checked, there are over 5000 registered training organizations in Australia. Don’t put the mop down yet Mr Turnbull.

  2. the fact is, many people are enrolled in training courses with the govts blessing to keep the UE numbers artificially low

    as an aside, uni isn’t as elite as it should be any more

    Gillard deregulated uni courses, so unis can enrol as many as they would like now, for all courses apart from med

    • Private college != unis.

      But it will be interesting to see what happens to UE if private colleges start collapsing in big number.

    • Gillard deregulated uni courses, so unis can enrol as many as they would like now, for all courses apart from med

      The problem is not unlimited enrollments, it is lax assessment standards.

      I’d rather have a hundred people drop out of a medical degree because they failed, than a hundred people who could have been doctors not allowed to study.

  3. Yes, the collapse of yet another private college is an outrage, but IMHO the bigger crime is that Boomers are seeking to profit and charge for an education – something they got for free.

    Boomers love to justify for the charging of an education, by saying in their day nobody could afford to go to Uni. This is a load of croak, especially when you consider that they have turned a Uni degree into something that is less about education and more about “signalling” to the market, that you are capable of working in a structured environment setting.

    If you look at education in the whole, the Baby Boomers did not discover the sum totality of human knowledge, they did not invent fire and the micro chip. Every achievement or discovery that their generation has made, was built on the shoulders of previous generations, right back to day when some cave man rubbed two sticks together. Paying for an education makes about as much sense as paying for the knowledge to make fire.

    Sure when Boomers went to Uni there was an issue with the intra-generational educational equity, but as I mentioned, education back then was less about signalling to the market and more about functional learning. The vast majority of people who went to Uni did so either on a full or partial scholarship, because they were smart and capable of the functional learning, and not just attempting to signal to the market.

    Sure, some wealthy dunderheads went along and had their fees paid for them by their parents. But the thing is, in totality, the Baby Boomer generation got their education for free – yes there were some intra-generational issues of educational equity, but the sum of human knowledge was essentially passed free from the Boomer parents to themselves.

    What we have now is the complete opposite, sure there is much more intra-generational equity in terms of access to education, but the inter-generational equity aspect has now been reversed. Young people today are effectively paying the Baby Boomer generation for the privilege of having the sum total of human knowledge transferred to them.

    Charging for education makes about as much sense as charging a tithe back to the descendents of that first cave man who invented fire. It is abhorrent and immoral, and typical of how the Boomers seek to extract future wealth out of younger generations, in order to satisfy their own selfish needs.

    • I reside in Australia anyway so personally irrelevant, but I received an email from the ATO this week stating:

      “There are changes to your Higher Education Loan Programme repayment obligations

      Changes to your loan mean that if you move overseas and earn income above the minimum repayment threshold you will need to make compulsory repayments, the same as you would if you were residing in Australia”.

      This came as quite a surprise to me as it is a massive change, is this common knowledge and I just missed the memo?

      • All part of the Boomers plan to make sure you pay them their tithe.

        It was a change outlined in the last budget I believe… not very circulated or discussed in the Boomer press, where they’re more focused on where to get the best soy chai lattee with shaved elderberry sprinkles.

      • They closed the loophole last year to stop people fleeing the country and never paying off their HELP debt

      • I don’t necessarily see this as a bad thing, I mean why should those who stay in Straya repay their help debts but those who leave not have to.

        That was my thoughts as well Jonathan, how will they enforce this?!

        At the moment the help debt come out of your tax return but if your overseas you don’t lodge a tax return:/

      • @Jonathan…Through tax treaties with other countries. Given the number of Aussies in the UK and USA it shouldn’t be too difficult as there is much cooperation between the relevant taxing authorities. Basically, if you pay tax in those countries, they will know if you owe the Australian government money. I wouldn’t be surprised if they end up collecting on behalf of the australian government, probably reciprocal arrangements.

    • Stewie, think about this, those Boomers who took an education have now developed AI and robotics.
      The application of that means that no Millennials will need an education as there will be no work for them. Unemployment in the youth today is 20% plus and rising, especially as we bring in more refugees.
      Problem solved.

      • Dunno about that – just about all the people at places like Facebook Research or Google Research , except a couple of the most senior are in fact millenials. Even if you accept the notion that AI and robotics have now been ‘invented’ (and so little or no fundamental research is required, which is pretty dubious), there’s a ton of work, likely in excess of the work involved in inventing the stuff in the first place, required to actually apply it to eliminating jobs.
        Crikey, they haven’t eliminated long haul truck and train drivers yet – a function that humans are largely unsuitable for while computers are highly suitable. Until they at least get most of the low hanging fruit, they’re going to need educated millenials a while longer.

        Of course, if they degrade education so much that there are far fewer people leaving school with the maths and tech knowledge to do serious work in AI, it’s just going to take even longer still.

      • SS, there are jobs and there are Jobs
        Remember Google (now Alphabet) invented the friction-less transfer of money, so the 1% Boomers, dont have to worry about the application of AI and robotics. for the hands on jobs,
        Jobs which are currently not cost effective to automate, well that’s the role for refugees.

    • “especially when you consider that they have turned a Uni degree into something that is less about education and more about “signalling” to the market, that you are capable of working in a structured environment setting.”

      Having a degree doesn’t guarantee that at all. Half the people in my post grad course didn’t turn up for lectures or tutorials, were useless to work with, and totally unprepared for the real world of work where your dreams and aspirations take a back seat to actually getting things done. I’m also an employer and it scared me.

    • Stewie, unfortunately tertiary education was always about signaling. The problem is that the signal is no longer strong, too many being accepted into degrees and not failed out. The signal is no longer valid, seems it was when places were capped.

      Eductaional achievement has always been a signalling mechanism. We’re presently suffering from educational inflation. Holding a bachelor’s does not make you smart, not even a PhD. Loads of educated inbeciles about.

      • Agree in respect to signalling for some Uni degrees – accounting, business, arts, etc. Disagree in respect to others, medicine, dentistry, engineering.

        But I agree very much correct in respect of how you put it that signalling has been weakened to the point of near uselessness, by the commercialisation of education and the everybodies a winners outcomes – that was exactly how I was trying to put it.

  4. Our TAFE is not competitive compared to the private industry: they’re charging too little, and passing too many people!! The yield per head is too low!!. Need to keep the students in study for longer to rake more government cash. All courses should be online only, and the phyiscal premises should be sold off. The teachers should be all hired on 457 visa from overseas, and then demand full pay back. After all, the 457 teachers can earn their money from student offering bribes to pass without attending class.

  5. This private education system ahs been the best ever argument against government having any funding of other than government entities.
    Did they set up this system as a control fraud rort to begin with?
    Paying for inputs is always going to lead to maximising inputs rather than outputs.

    • Very true.and true, across practically all businesses, which is why I’d also question the sincerity of anyone that’s surprised by this outcome. The policy is/was doing exactly what it was designed to do, no failure that I can see….system is functioning perfectly.
      I have a friend who lives in Coffs and is employed in a teaching role at one of these “training colleges”, now I like the guy but to be honest he’s not the sharpest tool in the shed (and that’s being generous) yet he stands up front and runs the class where most of the enrolled students are either skipping classes or turn up higher than a kite. Nobody involved thinks this undertaking is anything but a boondoggle, excepting maybe a few SJW’s decrying the dearth of opportunity in regional Australia….and this is their solution.

      • Nobody involved thinks this undertaking is anything but a boondoggle, excepting maybe a few SJW’s decrying the dearth of opportunity in regional Australia….and this is their solution

        This has nothing to do with providing additional opportunity to anyone other than to the corrupt proprietors of the collapsing colleges. If an SJW wanted to give extra opportunity to people missing out on education in regional centres, they’d ensure the teachers were directly on the government payroll – otherwise they pretty much wouldn’t be an SJW. The word ‘private’ as in ‘enterprise’ is pretty much their kryptonite.

  6. Germany has a brilliant apprenticeship system.

    1 year of theory and 1 year of practical industry work/training.
    (At 11m25s)

    Just copy that already.

    And the German feds have tight control on the quality of teaching. In England, even supermarkets were claiming money from Westminster for shelf stacking apprenticeships!

    • Germany has a great apprentice system, no doubt about it….matter of fact their practical training for degree Engineers is equally if not more impressive which is why my son is transferring his degree to Germany.

  7. Hot off the PRess
    JAMES Cook University’s Human Resources committee approved a bonus worth more than $100,000 to Vice-Chancellor Sandra Harding which would push her salary over $1 million

  8. Sad that the government doesn’t recognise the importance of giving those a quality educational leg up who haven’t the skills/funds/time to undertake a university course. Was checking for a family member recently – TAFE diploma of business used to cost $1800 several years ago – now nearly $4000. Diploma of accounting varies from $1700 for a one year course to, (yes unbelievably), $20,000 which makes you take two years – both online, same syllabus. I firmly believe this is due to the proliferation of private providers rorting the fee help system, and the government’s determination to make TAFEs compete. With the systems and resources already in place, why don’t universities and other tertiary institutions have more options for study, e.g. students able to take partial degree courses to complete a certificate or diploma, rather than the post-grad rip-offs currently offered. It would be a win win for both students and education providers.