Australian Government to crackdown on 'dodgy' vocational training practices

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The Abbott Government has vowed to deter 'dodgy practices' within the vocational education and training sector (VET). The crackdown will include a ban of cash and other incentives offered by providers as a means of luring students to sign up.

The crackdown on unethical vocational training practices in Australia will also include making it easier to cancel any debt students have generated through training providers or brokers which violate the new guidelines. If the provider has breached the new VET guidelines it will be required to reimburse taxpayers for the cost.

Senator Simon Birmingham, Assistant Minister for Education and Training, spoke of how a “rolling campaign of legislative and other changes” that target rogue training providers would help protect students from taking out an estimated $16 billion in “unnecessary” VET Free-Help loans.

VET Fee-Help loans

Fee-Help is an Australian loan scheme which provides financial assistance to eligible fee paying students for either part or all of their tuition fees.

As the Australian Government’s Study Assist website states, a student is eligible for Fee-Help is they are studying at an approved Fee-Help provider or through Open Universities Australia (OUA).

The student also needs to meet Australian and residency requirements, are enrolled in an eligible unit of study and have not exceeded the Fee-Help limit.

Essentially, the VET Fee-Help in a loan scheme that is income-contingent which enables students to defer the cost of acquiring vocational and educational training qualifications.

Preying on the vulnerable

However, instead of helping students financially whilst they obtain vocational qualifications, certain training providers are, as Birmingham says, preying 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,” Birmingham commented.

As a means of combating the unscrupulous practices of certain VET providers, the Australian Government has introduced tighter ministerial regulation, including a ban of sign up incentives whether they are meals, cash, laptops and other so-called ‘prizes.’  

However, other aspects of the crackdown will require legislation to pass the parliament.

Another proposed measure is to put an end to the “miraculously” short diploma courses.

Birmingham criticised the startling rise of such courses that comprise of only one unit of study and therefore consist of incredibly short course durations and result in “the full debt load for the whole qualification being levied in one go at the start of the course.”

The Abbott Government also plans to prevent rogue providers from collecting all the Fee-Help fees in one up-front transaction in favour of enabling students to consider various options before getting themselves into educational-based debt.

Not knowing what they are getting into

Another major concern of the dishonest VET loan practices is that many students are unsure what they are signing up for and consequently getting themselves into avoidable debt.

As Christopher Robinson, Australian Skills Quality Authority chief commissioner highlighted, some students signing up for these courses had literacy problems and were “very unsuitable for diploma-level courses.”

“There’s no law against offering people a discounted fee or other inducement – but the problem is those people were not suitable to go into a program in the first place,” said Robinson.

“They’re being signed up for often quite substantial debts… and in some cases… weren’t properly aware about what they were signing up to…” Christopher Robinson added.

While attempts are being made to put an end to the unscrupulous practices of rogue vocational training practices in Australia, the Labor party has accused the Government of being too slow to act on growing concerns about the ‘dodgy’ operators.