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Redesigning VET FEE-HELP

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4 May 2016

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The federal government has proposed a set of tougher measures to fix the VET FEE-HELP blow-out in a discussion paper released on 29 April.   The minister for vocational education and skills senator Scott Ryan said the paper will pave the way for a full redesign of the scheme.

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The discussion paper catalogues the scale of malpractice by some providers, such as the targeting of low socio-economic status and vulnerable people with inducements to enroll and misleading potential students about their repayment commitments.

The paper reveals that a small number of VET FEE-HELP providers dominate the scheme. In 2015, ten providers accounted for more than half of all VET FEE-HELP loans.

It also reveals that a small number of courses draw a large proportion of VET FEE-HELP funding.

VET FEE-HELP Figure 7

The paper  notes it is “not uncommon” to observe significant differences in course prices for students accessing VET FEE-HELP compared to those accessing a state and territory government subsidised program for the same qualification.

VET FEE-HELP Table 2

VET FEE-HELP costs reached $2.9 billion in 2015, with private providers accounting for $2.46 billion or 84% of the total.

VET FEE-HELP table 8

The discussion paper proposes a series of measures to improve the integrity of the system:

  • The application of minimum eligibility requirements for VET FEE-HELP recipients.
  • Reducing the lifetime student loan limit from $99,389.
  • Placing a fundi g cap on the scheme overall and
  • Prioritising VET FEE-HELP funding to courses that align with industry needs or lead to employment outcomes.
  • Providing better information for VET FEE-HELP eligible students before they enrol.
  • Establishing a VET FEE-HELP ombudsman.
  • Redesigning the regulatory oversight of VET FEE-HELP, giving the Commonwealth more power to tie payments to compliance measures.
  • Consideration of different payment tests around student engagement, progression and completion.
  • The possibility of existing providers needing to reapply.

In releasing the paper, Ryan said:

The VET FEE-HELP scheme, introduced by Labor, was demand driven, uncapped and had insufficient student protections in place. The original scheme opened the floodgates to shonky training providers and predatory brokers to take advantage of the system.

Labor’s spokesperson Sharon Bird said the VET FEE-HELP discussion paper offers no new solutions to stop the unprecedented waste of taxpayers’ money occurring in the VET sector.  It recommends many of the amendments which Labor moved to implement in late 2015 and which the government voted down.  She said as a result the rorts will continue until such time as a new Parliament deals with any legislation.

The paper calls for submissions by 30 June 2016.

See
Redesigning VET FEE-HELP Discussion Paper

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