The Federal Government’s overhaul is designed to stop ‘dodgy’ training providers taking advantage of government loan schemes by luring prospective students with incentives including laptops and cash.
Colleges will also no longer be able to use brokers or cold callers to recruit students, while there will also be limitations to the amount of money that students can be loaned when taking a particular course.
“The waste and rorting and damage to vocational education simply cannot continue,” said Education Minister Simon Birmingham. “VET student loans will only support legitimate students to undertake worthwhile and value for money courses at quality training providers.”
The new regulations, which are touted as saving taxpayers $7 billion, will ensure that only courses that meet industry needs and allow students a good chance of employment will be eligible for government-funded loans. Courses will be categorised into ‘bands’ with fees that can be covered by the government capped at $5,000, $10,000 or $15,000, depending on the cost of each course’s delivery.
The bar for education providers hoping to offer government loans has been significantly raised. Institutions will have to prove themselves in terms of their relationships with industry, student completion rates, employment outcomes and more.
In addition, students will be required to log in to an online student portal to ensure they are active and legitimate. There will also be powers to prevent poor-performing providers from accessing the loans scheme, and to cancel their payments.
Private training providers will need to apply to be eligible for the new loan scheme, whereas TAFE institutions and other public VET providers will be automatically eligible for the scheme, though subject to new criteria.
“The Turnbull Government’s new VET Student Loans program will return integrity to the vocational education sector and deliver a win-win for students and taxpayers through a range of protections,” said Birmingham.
“We will close off new loans under VET FEE-HELP at the end of 2016, with the new program including course restrictions for providers, loan caps and student engagement requirements commencing from mid-2017.”
National review needed into the ‘forgotten middle child of education’
A government crackdown on unscrupulous training providers is set to shake up the vocational education and training (VET) sector.