Unfolding VET disaster leaves us all losers

Dinoo Kelleghan

A litany of failure

From 2012, state and federal governments have piled policy blunder upon blunder to degrade what used to be a wholly reliable VET sector.

2012: Federal government launches National Partnership Agreement on Skills Reform that allows students to take VET Fee-Help loans to buy courses from TAFE or private providers. NSW launches Smart and Skilled to fund commercial providers at the expense of TAFE’s budget. Private providers then had just 10 per cent of publicly funded training hours.

Hundreds of private colleges begin operating around the country offering cheaply-run courses, drawing in thousands of students using taxpayer-funded VET Fee-Help loans.

National Centre for Vocational Educational Research (NCVER) warns the low course completion rate in for-profit colleges “is a serious matter for concern”.

From 2008-2012, private providers have taken $950 million in public funding, a 200 per cent increase. Victoria is worst hit, with TAFE’s share of publicly-funded VET places there falling from 70 per cent to 45 per cent since 2008.

2013: NSW Senate committee inquiry into technical and further education states it heard “no compelling evidence that opening TAFE to full contestability benefits anyone but the private providers”.

2014: NSW TAFE loses a quarter of its income to private providers, starts cutting staff and shortening courses to match competitors’ budgets but is losing students by being forced under Smart and Skilled to charge much higher fees.

Private colleges raking in hundreds of millions of dollars through VET Fee-Help. Australian Senate starts inquiry into private VET sector. Many private colleges are offering iPads and laptops to lure elderly, disabled and disadvantaged students.

In a submission to the Senate, industry and employer groups criticise poor training, inadequate course time and unreliable assessment of VET graduates in commercial colleges and warn of “public safety risk”.

2015: Commonwealth government freezes 2016 payments to training colleges at 2015 levels. The government says the VET Fee-Help burden for 2013 was $699 million, $1.76 billion in 2014 and set to be $4 billion in 2015.

July: Australian Competition and Consumer Commission (ACCC) begins investigating five private colleges for alleged fraud.

September: ACCC deregisters Unique International Business College which pocketed $140 million in public money.

Cornerstone College comes under ACCC scrutiny — it took $46 million in 2014, graduating just five students from 4000 enrolments but in 2014 scores $40 million more in publc funds.

ACCC goes to court to recover money from Phoenix College which drew $100 million in VET Fee-Help in 10 months in 2015, largely targeting the vulnerable.

October: ASQA audit of 21 private providers finds two in three are non-compliant.

Federal government says taxpayers stand to lose from $1.2 billion unpaid fee loans.

ASQA says it has suspended or cancelled registration of 200 providers and rejected registration applications of 134 others.

November: AEU says the amount of VET Fee-Help debt students will accrue in 2015 is expected to hit $4 billion (it was just $15 million in 2008).

Students of Evocca College, which took $400 million in government funds in two years to 2014, join in class action against college.

December: Federal Senate issues report naming “harrowing and concerning evidence of misconduct by private VET providers [and] massive profits at the public expense”. Private providers have flourished “at the expense of the most vulnerable who end up with a debt, but no qualification, or a worthless qualification”.

Senate finds VET regulators ASQA, VRQA and TAC have limited capacity to follow complaints and that the National Complaints hotline does not investigate complaints. Recommends ASQA be given teeth and that a national VET Ombudsman be appointed to have a “behaviour-modifying effect” on providers.

TAFE NSW faces having half its budget cut, media report says. Greens say 4000 TAFE teaching and support jobs gone since 2011 and 27 campuses to be partially or completely sold.

Australian Council for Private Education and Training (ACPET) CEO Rod Camm acknowledges some building work course private providers are offering qualifications with no training provided and notes “some very poor behaviour” among some providers.

2016: February: Turnbull government proposes federal takeover of TAFE funding, with TAFE and private colleges to be on same funding level. State governments demur.

April: Federal government releases a discussion paper on redesigning VET-Fee-Help, suggesting a ceiling on loan debt and a proposed national Ombudsman.

Federal government reveals Indigenous people taking out VET loans increased by 649 per cent from 2012-15 amid the explosion in for-profit providers and were charged a third more for their courses.

Federal police raid Australian Careers Network offices (Phoenix owner) in fraud investigation.

May 5: Labor leader Bill Shorten says he’ll cap VET Fee-Help student loans at $8000 each, down from an average $12,800.

May 17: ACCC forces Careers Australia, which has 15 colleges nationally, to pay back $44 million to government and admit it engaged in unconscionable conduct. The ACCC says it has 10 private providers in its sights for alleged
malpractice.

Read more:

Federal Labor and TAFE — it's a start but more needed
Barilaro attack backfires

Click here to download a PDF of this story.