6 May 2016
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Labor has proposed an $8000 annual cap on the VET FEE-HELP loan scheme, which has provided hundreds of millions of dollars to colleges which have targeted vulnerable people, had abysmal completion rates and left thousands of students with huge debts, many of which won’t be repaid.
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Higher education spokesman Kim Carr said the cap would provide protection for students and reduce the call on the budget, as taxpayers are bankrolling unscrupulous private colleges under current arrangements. He said:
The average cost to providers is less than $4000, so there is still plenty of room for people to return a profit, but it’d be nothing like what we’re seeing with the $20,000 courses.
There would be an exemption on legitimate high-cost courses such as nursing and engineering following ministerial approval.
The current scheme allows students access to $100,000 in study loans, with no annual cap, to be repaid once they begin to earn more than $54,000 per year (although whichever party wins, that threshold is likely to be lowered).
The scheme, which lent $2.9 billion last year, has been gamed by unscrupulous providers.
Labor also intends to introduce specific mechanisms to push students into vocational courses that are connected to “national priority” skills. For example, Labor said students at private colleges were paying more than $32,000 for a salon management qualification — the same qualification is provided at a NSW TAFE for $6990.
Australian Council for Private Education and Training chief executive Rod Camm said the limit would be “too low”:
There will be high-quality organisations that won’t be able to deliver a course for that amount of money, so students will have to fork out their own funds to meet the gap.
The Coalition has released a discussion paper on options to rein in abuses of the scheme.
See
Labor’s plan to stop dodgy providers ripping off taxpayers and students
Protecting students & restoring integrity to vet fee-help
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