VET for-profits' trail of dirt

Rob Long
Adam Curlis

TAFE Organisers

The student loans experiment has been a failure

The Turnbull government is failing TAFE students with bandaid solutions to the crisis facing vocational education.

The student loans experiment has been a disaster, allowing private, for-profit providers to flourish at the expense of students, qualified teachers and the TAFE system.

Last December, federal Education Minster Simon Birmingham announced the VET Fee-Help scheme was being replaced with a “new” scheme called VET Student Loans. The new scheme, however, fails to address the real issue facing vocational skills education: chronic under-funding.

There are many recent examples of private, for-profit training organisations abusing the loan system.

In 2015, after the collapse of major private college Vocation Ltd up to 12,000 vocational education students across Australia were affected. The company owed $8 million to the Victorian government at the time of insolvency.

In February 2016, Aspire College of Education, The Design Works College of Design, the Australian Indigenous College and affiliated companies received at least $66 million in government-funded student loans and then collapsed, leaving thousands of students and 500 staff in the lurch. Global Intellectual Holdings, which owned these companies, made $83 million in revenue in 2015.

Two large vocational education and training companies recently closed their doors.

The Australasian College Broadway based near Wentworth Park in Sydney went into administration in December 2016. Hundreds of students and 80 staff were directly affected. In 2015, the company earned more than $10 million from the taxpayer-funded student loan scheme. It has been reported that the owner of the company was a “prominent political donor”.

In February 2017, we learnt about the latest market failure as the Sage Institute of Fitness, registered with the Federal Government’s loans scheme as Australian Careers Institute, collapsed. The government paid the Sage Institute more than $32 million through the VET Fee-Help loan scheme before it went into voluntary administration.

The federal government must face up to the reality that student loans schemes are failing students, wasting tax-payer funds and eroding confidence in vocational education. The only viable solution to these problems is to end the experiment and use the money being handed to private colleges to re-fund TAFE.