Australia’s crackdown on unscrupulous VET providers

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Despite state and federal efforts to crackdown on unethical private training colleges, it has been reported that disturbing recruitment practices are still being made by some vocation colleges in Australia to recruit students.

Sydney Morning Herald reporters filmed undercover footage of a company which sells vocational education. The firm being investigated was a “broker” for Melbourne’s Phoenix Institute. The report revealed how the firm prayed on an intellectually disabled couple.  The salesman representing Melbourne’s Phoenix Institute knocked at Arthur and Jacinda Eastham’s door offering them a ‘free laptop and a free qualification’. Despite being told of their disabilities the footage showed how the salesman would hurriedly help the couple through the literacy and numeracy test and before long they were signed up for diplomas at the Phoenix College.

According to the Sydney Morning Herald, selling online diplomas like these have become the quickest “get rick scheme” there is, with door-to-door salesmen, call centres and “aggregators” marketing such courses to vulnerable students. As federal skills Minister Simon Birmingham admits:

“Clearly, the scheme was structured in a way that made it susceptible to shonks and fraudsters.”

In order to combat such unscrupulous practices, a number of reforms have been put in place. For example, in April 2014 the Council of Australian Governments (COAG) Industry and Skills Council agreed a number of objectives for the reform of the Vocational Education and Training (VET) system. The reforms include ensuring consumers have access to information so they can make informed decisions about providers and training that meets their needs. 

In order to help meet the reforms, in March this year the Commonwealth banned salesman from offering free devices such as iPads and laptops to people they are signing up to courses. However, as the Sydney Morning Herald’s undercover report revealed, there are still firms that are attempting to lure students onto courses with free laptops.

In response to the disclosures of people being ‘harassed’ into debt by dodgy colleges and VET course sellers, an investigation is being made into the Phoenix Institute which may lose its vocational registration.  

Whilst the funding for such courses is made by the Commonwealth VET FEE-HELP scheme and enables students to delay loan repayments until they earn more than $54,000 a year, if students withdraw from the course, the debt remains against their name. Many of the poor and disadvantaged students that are targeted by certain colleges struggle with the course and ultimately withdraw from it.

As Bruce Mackenzie, former head of Holmesglen TAFE, who is conducting a review for the Victorian state government, told the Sydney Morning Herald:

“Studying online for a full diploma is a pretty sophisticated way of learning. You’ve got to be an independent learner, you’ve got to have strong computer skills, literacy skills, and numeracy skills, which is not a characteristic of most students in VET.”

The Phoenix Institute investigation follows earlier inquiries made by the Education Department which saw three unscrupulous training colleges have their contracts terminated and a further four colleges losing state funding after the crackdown revealed they were involved in serious misconduct and fraud.

As part of a “quality blitz”, the Australian Education Department has withheld more than $20 million from training providers.