VET withdrawal fees banned

30 June 2015

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  The Commonwealth government has banned training providers from imposing withdrawal fees on vocational students who leave courses early.

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Simon BirminghamThe rules, announced on 25 June, ban providers from charging withdrawal fees to students who drop out of courses before the education census date.

The assistant minister for education and training Simon Birmingham said private providers had been charging exorbitant withdrawal fees, with some students forced to pay as much as $1000 to exit before the census date.

The new rules are part of a wider crackdown on the distribution of misleading advertisements and the soliciting of students for courses they are not suited to by training providers. A joint investigation by the NSW Department of Fair Trading and The Australian Competition and Consumer Authority in March into unscrupulous training providers, revealed that at least 600 people had been duped into taking out unfair student loans.

The latest changes to the private education and training sector follow a crackdown earlier this year on unscrupulous sale techniques employed by providers to recruit prospective students.

The ban will also stop training providers from advertising courses that attract VET FEE-HELP loans as “free” or “government-funded”.

The new measure requires that a VET provider:

  • Must not have financial, administrative or other barriers in place which would prevent a student from withdrawing from a VET unit of study on or before the census date;
  • Must ensure that where a student notifies the VET provider of withdrawal or cancellation the student will not remain enrolled from the date of notification;
  • Must not enrol the student in subsequent VET units of study without written instructions from the student and must have a process in place for students to select, initiate or request their own enrolment in subsequent VET units of study;
  • Must publish withdrawal procedures on its website and make them otherwise readily available; and
  • Must not charge a student any fine, penalty or fee for withdrawal in accordance with the requirements of the VET guidelines.

 

A census date for a unit of study is the closing date for a student to apply for VET FEE-HELP assistance and the date a student incurs a VET FEE-HELP debt (the tuition fees) for the unit undertaken. The census date is set by the VET provider for each unit of study it provides or intends to provide during a year and can be no earlier than 20% of the way through a unit of study. 

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