The Commonwealth government has been told to simplify its “HECS for skills” loan scheme after a consultant’s report found administrative complexities — including a 200-day application period — had contributed to extremely low take-up rates.
The report found that just one in seven Victorian training colleges had obtained approval to offer VET FEE-HELP loans after the state “mainstreamed” the scheme in 2009. VET FEE-HELP, dubbed “HECS for skills” by Julia Gillard, covers upfront tuition fees for diplomas and graduate certificates. Students pay no interest on the loan, and they don’t have to repay it until their income exceeds $47,000 a year. Public policy consultant Brendan Sheehan said relatively low fees were part of the reason that government-subsidised students hadn’t embraced it. Government-supported fees average about $1150 a year compared with $8200 for full fees. However, RMIT University policy analyst Gavin Moodie said the availability of loans would cause fees for government-supported courses to rise. He said the COAG agreement had capped the loans at $5000, significantly more than any current government-supported diploma fees. University of Melbourne tertiary education researcher Leesa Wheelahan said the loan scheme had failed to apply the universal “keep it simple, stupid” principle and discarding a requirement for colleges to have credit transfer agreements with higher education providers before they could offer the loans seemed a sensible simplification:
The link to credit transfer was always ill-advised. Using one policy lever to achieve an unrelated policy objective results in unintended consequences and made it overly complex.
- The ‘HECS for skills’ scheme hands out just a tenth of the value of the loans going to its higher education equivalent, even though the private vocational training sector is far bigger than private higher education.