Fly-by-night private colleges with high drop-out rates are set to lose access to taxpayer subsidies under a federal government plan to “smash” the business model of dodgy operators.

Education Minister Simon Birmingham will announce on Thursday that he is finalising a major overhaul of the government’s scandal-plagued vocational loans scheme to come into effect next year.

“Our redesign of Labor’s flawed VET FEE-HELP scheme will seek to smash the business models of anyone ripping off taxpayers or targeting vulnerable people, whether they be VET providers, brokers or data miners,” Senator Birmingham will tell the Australian Council for Private Education and Training’s national conference in Hobart.”

“Unacceptable practices and unethical businesses must be stamped out.”

“The focus must return to quality learning outcomes for all students and value for money for the taxpayer.”

The cost of the VET FEE-HELP scheme ballooned from $325 million to $2.9 billion in the three years to 2015 and student fees tripled. Media outlets including Fairfax Media have revealed how unscrupulous operators got rich by saddling vulnerable students with large debts by enrolling them in courses they were unlikely to complete.

Senator Birmingham’s speech offers the clearest sign yet of the government’s policy direction since it placed an emergency freeze on the HECS-style loans scheme last year. Legislation will be presented within months and the new system will begin in 2017.

Senator Birmingham says it is a disgrace that inexperienced private education operators have collected hundreds of millions in government subsidies despite graduating as few as as one in five students.

“People with little history in training in a certain field of study and limited or no employer support for their outcomes shouldn’t be enjoying taxpayer support to deliver such training,” Senator Birmingham says.

“Appallingly low student progression and completion rates are not acceptable and should not be tolerated, not by any measure.”

The government has rejected Labor’s approach of an $8000 annual cap on vocational loans, saying it is too rigid and would see some students forced to pay up-front fees.

Instead the government is examining a staggered system of loan limits which recognises the different costs of providing courses such as agriculture and childcare.

Senator Birmingham says the key questions he is considering are:

  • Which operators are of sufficiently high quality and repute to qualify for subsidies.
  • Which courses are sufficiently likely to lead to employment and warrant government support.
  • How can student numbers best be controlled.
  • What costs are reasonable for different courses.

“Australia’s new VET FEE-HELP scheme must be fiscally sustainable, protect students and provide strong regulatory oversight,” he says.

“We must restore confidence and reputation to a sector that has taken a battering.

“I want to deliver a system that is student-centred, that weeds out shonky providers, and that delivers quality skills and training outcomes that are relevant to students, to business and to the economy.”

The Australian Competition and Consumer Commission, backed by the government, has taken Federal Court action against four VET FEE-HELP providers for alleged breaches of the Australian Consumer Law.

The Department of Education has revoked the status of four colleges and is currently undertaking 28 audits of providers in concern.

 Source – The Age 25.08.2016