Proposed new VET Student Loans scheme unfair to good VET FEE HELP providers

Media release
For immediate release

Liverpool, NSW – Wednesday 5th October 2016

Proposed new VET Student Loans scheme unfair to good VET FEE HELP providers

The federal government has today announced a new program to replace the VET FEE HELP income contingent student loan program. The new program to be called the ‘VET Student Loans scheme’ will operate from 1 January 2017 (pending parliament review).

Ann Elisha, a twenty year veteran of the VET industry and CEO of Australian Careers Business College (ACBC) says “Whilst there is no doubt that the management of the program by the government required a review, the new proposed program will disadvantage quality VFH providers, with an outstanding record of employment outcomes and higher education pathways like ACBC”.

Ms Elisha went on to say “We were one of the first providers to be approved for VFH in NSW in 2009 and as a result more than 3000 students have graduated from our programs and begun their journey to gainful employment or further study. This is 3000 young people who would otherwise been unlikely to participate in further education. I fully support actions to punish wrong-doers but the new program will severely damage many good operators”.

A range of fact sheets have been released today by the Department of Education which set out key information about the new program. These fact sheets state that TAFE and public RTO’s and Universities will not be required to apply to be providers for the new program. However private RTO’s will. Ms Elisha says “The uncertainty this will cause for consumers will potentially cripple many quality private providers. We, like many others have marketed and promoted VFH and created a demand for the program on behalf of the federal government, and our reward is to have the rug pulled from under us. The timing of this affects marketing for all RTO’s for programs commencing in 2017. The proposed provisional approval arrangements will be hard to communicate to potential course candidates. It is truly irresponsible to paint all RTO’s with the same brush.”

A key issue is the fact that private RTO’s and TAFE should not be compared. TAFE (and universities) are subsidised at many levels through various funding agreements for operating costs, infrastructure and staffing. Private RTO’s like ACBC fund their operations with private investment and borrowings. The majority of RTO’s are small businesses doing their best to provide a quality service, especially in regional areas. They have been made to jump through many changes to compliance and regulation and now the government are creating yet another barrier to business operation. Private RTO’s have provided many thousands of training places nationally where TAFE were unable to deliver on a commercial fee for service basis, and made significant contributions to achieving government skills achievement targets. Ms Elisha says this should be acknowledged.

Ms Elisha points out that the guidelines for the new program have some positive measures including scrapping the use of brokers and agents. Ms Elisha participated in the national consultation on VFH earlier in the year and also made submission to the minister on reforms issues. However, Ms Elisha raises concerns over the proposed VET student Loan capping. “I really think that the proposed three-band capping approach is arbitrary, and I look forward to more information on which courses the department will apply these caps to. In the national consultation, it was discussed to reduce the $99K cap as a measure to control students being encouraged to hop between courses and accrue large debts. I’m disappointed that this hasn’t been proposed as part of the new program”.

Ms Elisha is keen for young people and parent’s deciding on courses for 2017 and beyond to know that the majority of private RTO’s offer programs with greater outcomes than TAFE and Universities.

In response to the proposed reforms she said “There are over 4000 ASQA-approved RTO’s in Australia and less than 3% of these have been implicated in VFH ‘rorting’. I urge people looking to study to do their homework and still consider private providers with a positive track record. I guess we’ll just have to wait and see what happens next.”

In her final comment, Ms Elisha went on to say “What I do know is my industry will take a significant battering from the transition process to the new program. Jobs will go, hardworking business owners will be disadvantaged and potential students will, at least for the interim have less confidence in private RTO’s and miss out on choices that will affect their careers. Of course, we’ll apply to be a provider under the new program and have no concerns about our history our performance. The devil is in the detail and we will await more information about capping and course availability”.


For media enquiries contact:

Ann Elisha, CEO Australian Careers Business College

0418 440 511 or 02 9824 0000