The Guardian | 12 March 2015
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With ongoing revelations of systematic rorting of public funding of vocational education and training, the Commonwealth government has announced it will crack down on “dodgy practices” in sector, including a ban on providers offering incentives of cash or laptops to lure students to sign up to courses they don’t need.
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The government wants to make it easier to cancel student debts that have been generated by training providers or brokers who breach the new guidelines, with the provider then being required to reimburse taxpayers for the cost.
The assistant minister for education and training, Simon Birmingham, said the “rolling campaign of legislative and other changes” targeting rogue training providers would protect students from an estimated $16bn in “unnecessary” VET Fee-Help loans that they otherwise would have taken out over the next 10 years.
VET Fee-Help is an income-contingent loan scheme allowing students to defer their costs of obtaining VET qualifications. It is similar to the Hecs-Help loan scheme for university students.
After closely reviewing some of the dodgy practices being deployed, it is clear that further reforms are needed to break the business model of those unscrupulous training providers who prey on vulnerable students.
The unacceptable activities of some training providers are leaving vulnerable Australians with a lifetime of unwanted debt, taxpayers with liabilities that may never be repaid, and are damaging the reputation of the many good public, private and not-for-profit training providers.
Many of the changes can be achieved by ministerial regulation, with the ban on inducements like cash, meals, prizes or laptops set to begin on 1 April. But some elements of the plan will require legislation to pass the parliament.
Other proposed measures include a ban on “miraculously short diploma or advanced diploma courses, instead requiring a minimum number of units to study”.
RTOs will only be allowed to sign up students for diploma courses if they have a Year 12 or equivalent qualification.
New students will be subjected to a new “work-capability test’’ to stop colleges recruiting unsuitable students from nursing homes, mental health units and from Centrelink clients.
The government would also prevent providers from levying all fees in a single up-front transaction so that students could have more opportunities to consider their options before incurring VET Fee-Help debts; improve the information available to students about the total debt they would accumulate; and strengthen the duty of care requirements for training providers offering VET Fee-Help loans.