High Expenses, Weak Results Mar Australia Vocational Program

(Photo: Louise Kennerley, Australian Financial Review)

(Photo: Louise Kennerley, Australian Financial Review)

An educational policy debacle has seen money pouring from the Australian federal government coffers into the pockets of vocational education and training (VET) providers after the facilities enrolled hundreds of students under federal loans and only graduated a fraction.

The cost of the VET FEE-HELP scheme has sky rocketed since it began in 2009, costing taxpayers $2.9 billion per year.

Over the 8 years the program has been in operation, stories have emerged of students being scammed into signing up by providers and courses that are low quality and leave students with qualifications that do not lead to employment opportunities.

Issues relating to the cost of the plan and fraudulent activities of providers have been hotly debated in the country's most recent federal election, with the Australian Labor Party (ALP) proposing a flat rate cap of $8,000 per course and a VET ombudsman to oversee the program.

The Liberal government is currently undertaking a review of the plan in order to increase efficiency and protect students from scrupulous providers, reports Paul Karp of The Guardian.

Simon Birmingham, the federal Minister for Education, has alluded that the government's recommendation for the sector will remain ‘cap free', reports ABC News.

The Minister also indicates that eligibility requirements for providers to deliver the scheme and loan amounts that reflect the actual cost of course delivery will be a part of the governments reform, writes Karp.

On the Oppositions proposal to cap subsidies, Senator Birmingham states that:

"You have to recognise that different courses — nursing or agriculture or aviation — cost different amounts of money to deliver…To put a flat $8,000 cap on every course, as Labor proposed at the last election, you just end up with circumstances where students face upfront fees to access those courses."

Access to the program has increased by 5,000% since it became available in 2009, reports Karp.

The government claims that both the increase to the plan and the tripling of fees are a legacy of the Gillard government, writes Judith Sloan in The Australian.

Professor Peter Noonan, an education funding expert from the Victoria University, warns that it is imperative that the government refine agreements with the states to prevent further budget waste. This is especially important to prevent a duplication of services, with states also providing funds to vocational education providers, writes Tim Dodd from the Australian Financial Review (AFR).

"It's really important that the two governments work out who's funding what and at what price. It's public financing 101 really," Professor Noonan said.

The Victorian government is set to announce changes to the state's vocational education funding and as Dodd reports, it is expected that many courses that are subsided through the state scheme will be defunded.

Senator Birmingham told the private college peak body, the Australian Council for Private Education and Training, that it was not acceptable that colleges using the plan continue to hike their fees and have low completion and progression rates.

The VET FEE-HELP program is available to eligible students who are enrolled in a diploma or higher-level course to assist with tuition fees or other costs incurred as a result of study. In 2016, students were able to borrow between $99,389 and $124,238, depending on the course. This year, students begin to pay back the loan when they earn over $54,126.

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