Scandal-hit training provider collapses

by L&D23 Mar 2016
The private training provider Australian Careers Network (ACN) is entering voluntary administration after it failed to recover funding withheld by the Department of Education. John Lindholm and George Georges of Ferrier Hodgson have been appointed as voluntary administrators.

This impacts more than 15,000 students who have been left in limbo, on top of the 500 ACN staff who have lost their jobs since November.

The Federal Education Department stopped funding the ACN in August 2015.

ACN runs a number of private colleges including the Phoenix Institute, which the Australian Competition and Consumer Commission (ACCC) allege enrolled more than 9,000 students in 17,000 courses, and were paid more than $100 million by the federal government.

Moreover, the Phoenix Institute had its registration cancelled and found itself in court last November for allegedly misleading students to sign up.

The administrators said they would try to sell ACN's Wizard Corporate Training, International Training College, and Centre of Vocational Education, which collectively have about 750 students.

They added that as a result of ACN's collapse, all current legal action would be stayed.

Mick Bellairs, of the Melbourne-based Consumer Action Law Centre said the matter has been a nightmare for students.

"It's hard to believe that ACN could even consider chasing course fees from students, especially given the accusations that Phoenix Institute engaged in the outrageous mis-selling of courses," Bellairs was quoted as saying by the SBS.

"They're the ones we're most concerned about: the students who have been left in the lurch."

The minister for vocational education and skills Scott Ryan added that the Australian Council for Private Education and Training is seeking alternative education providers for all current students.

In a statement, Ryan said that the VET FEE-HELP scheme, introduced by the former Labor government, “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,” he said.

“The Coalition Government will redesign the VET FEE-HELP system for 2017 to better serve the needs of all Australians and will continue to aggressively defend the rights of students and taxpayers against dodgy providers.”