Shocking new evidence of rorting and waste among for-profit private vocational training companies is more reason to ban them from government funding and to properly fund TAFEs, the AEU says.
Analysis of the VET Fee-Help loans scheme, released by the federal government, shows private for-profit companies are charging higher fees than TAFEs, have lower completion rates and are abusing the scheme through multiple enrolments.
AEU TAFE Secretary Pat Forward said the federal government’s decision to shut down VET Fee-Help, replacing it with VET Student Loans, did not go far enough: no for-profit provider should be eligible for any future loans scheme. “Policy-makers need to realise that any scheme that allows for-profit providers to access government funds will be abused," Ms Forward said.
“How much more evidence do we need that allowing for-profit providers to access government loans is an invitation to them to fleece taxpayers?
“Their business models and big profit margins are built on charging big dollars for low-value courses. Attempts to cap costs will simply see them drive quality down even further.”
“The funding that is going to for-profits should go to TAFEs, which have a strong record of delivering high-quality courses. All governments should ensure that at least 70 per cent of all VET funding is reserved for TAFEs, to give them the certainty they need."
The analysis shows some for-profit providers had completion rates of less than 2 per cent, yet still received more than $100 million in government subsidies through VET Fee-Help.
The data also shows the dramatic difference in fees between public TAFEs and private colleges accessing the loans scheme.
For example, a diploma of early childhood education cost an average $15,158 at a private college in 2015, for example, compared to $4378 at TAFE.
“Huge damage has already been done to TAFEs by reducing their funding and forcing them to compete with these shonky operators who are not interested in student welfare or quality,” Ms Forward said.
“The federal government has already recognised the quality of TAFEs by making them automatically eligible for its new loans scheme. So why not increase funding to the part of the VET sector that is working the way it should?” Ms Forward said.
“The flawed VET Fee-Help scheme went hand-in-hand with cuts to government funding for TAFEs.
“With VET Fee-Help gone we need state and federal governments to restore funding to TAFEs to ensure Australians have access to quality vocational training.”
VET Fee-Help was set up in 2012, and the decision to open it up to all private providers saw the scheme hijacked by scores of unscrupulous private providers who recruited thousands of students through false pretences for dodgy courses, offering inducements such as free iPads. These providers pocketed millions of dollars from the loans scheme while leaving thousands of students in the lurch from substandard courses.
VET Student Loans will limit access to credible colleges that will be intensively monitored, and the size of loans will be restricted.