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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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.