How did vocational training push end up such a disaster?

Government has been forced to wipe student debts worth $500 million, says Terry Polglase

MANY who are old enough will remember Kerry Packer’s response to a question in 1991, when he said, “I pay whatever tax I am required to pay under the law, not a penny more, not a penny less … if anybody in this country doesn’t minimise their tax they want their heads read because as a government I can tell you you’re not spending it that well that we should be donating extra.”

Clearly little has changed as the Morrison Government has just wiped $500 million in dodgy debt accumulated by 38,000 unsuspecting VET students as part of the most disastrous education rort in Australia’s history. It had to be done but this is taxpayers’ money so how did it get to this? The VET FEE-HELP scheme was introduced in 2012 and belatedly scrapped in 2016 by the Turnbull government. Students were signed up to substandard courses with some providers even saying their online diplomas were free.

Another 7300 complaints remain open so expect another $100 million to be wiped as individual debts range between $12,160 and $20,000.

VET FEE-HELP granted virtually unregulated access to government subsidies for every person enrolled in a course.

It was an absolute disaster and has been responsible for the demise of TAFE nationally. The Australian Education Union federally has been scathing of the scheme since its inception.

Private colleges would enrol as many students as they could, often providing free laptops and iPads, signing up vulnerable people into courses they would never finish and without telling them they would eventually have to pay back tens of thousands of dollars to the government.

Both sides of government are to blame and while the government holds Labor responsible for allowing dodgy providers to flourish, the

Liberal governments did nothing for years to address the problems.

Scrapped in January 2017, it is estimated to have cost taxpayers $7.5 billion between 2009 to 2016, most of which went to private colleges.

The cost of the VET FEEHELP scheme ballooned from $325 million in 2012 to $2.9 billion in 2015. Deregulation of the market was a disaster for the vocational education system and TAFE nationally and much internal soul searching is needed by all concerned.

Unscrupulous private providers were allowed to overwhelm the regulators and have billions of dollars transferred from the public purse to the profits of private companies who were often new to the education sector.

The scheme began in 2009 when vocational loans, originally legislated by the Howard government, came into force.

In 2012 the Gillard government erred in removing the requirement for colleges to have credit transfer arrangements with a higher education provider.

It was a major mistake and

from 2014 reports of private colleges luring students into courses by offering free iPads, laptops and other inducements appeared and in September 2015 it was known that vulnerable people, including drug addicts and those with intellectual disabilities, were being lured into online courses they would never complete.

In December 2015 the Turnbull government placed an emergency freeze on VET FEE-HELP loans and in October 2016 announced that VET FEE-HELP would be replaced by a new, less generous scheme. Senator Simon Birmingham has since said that the new scheme introduced in 2017 is expected to reduce the outstanding level of debt in the government’s Higher Education Loan Program which covers university and vocational loans by $7 billion over four years and $25 billion over the decade.

VET FEE-HELP was intended to put VET students on an equal footing with university students by allowing them to delay paying their fees until they earned a decent wage but it quickly blew out with tuition fees tripling and the number of students accessing the scheme exploding from 50,000 in 2012 to over 270,000 in 2015.

In 2014 student loans totalled $3 billion. From 2011 enrolments grew eight times what they should have with 60 per cent of students failing to complete their courses.

Worse still, only one in five students who enrolled in a course in 2012 with VET FEEHELP debt graduated three years later. In 2015 Australia had more than 5000 training providers including 61 TAFE institutes (1000 campuses) registered to run VET courses. They outnumbered the nation’s universities by more than 100 to one and the total enrolled was more than double the 1 million Australian students in higher education.

With Treasurer Josh Frydenberg telling us that older Australians will need to work longer to receive the pension in the future, Kerry’s thoughts and assertion would seem well justified. Terry Polglase was a school principal for 16 years and state president of the Australian Education Union 2012 to 2015.