The education minister, Simon Birmingham, has revealed strict new rules for courses and training organisations in the VET student loans program that will penalise colleges with less than 75% pass rates by restricting enrolments.
The new criteria – which only provides provisional approval – could cut eligibility completely for more than 60 colleges whose students are currently approved under the existing system for access to loans.
And colleges with higher pass rates and better results will be able to enrol more students who will be covered by government loans.
The new rules are part of the Coalition government’s reform package following widespread rorting in the private education sector that led to students being exploited and saddled with debts after they were enrolled in substandard courses.
A Senate inquiry report found students and taxpayers became “the victims of a provider-led feeding frenzy”.
Birmingham said he expected the changes to the rules for providers that govern student enrolments and course requirements would save taxpayers hundreds of millions of dollars.
“Australians rightly expect that taxpayer funding for student loans will go to courses that will help students get a job and ultimately earn enough money to repay what was lent to them,” Birmingham said.
“Unfortunately under VET FEE-HELP far too many students were failing to complete studies yet were ending up with ballooning debt that will take them far too long to repay, if they ever do.”
The new rules govern the transition period for providers in the first half of 2017 while the government undertakes a more comprehensive review of the course list. The review will look at the costs of course delivery.
Although there are 269 training colleges approved for VET FEE-HELP loans including 40 public providers, the government estimated only 200 would be eligible under the new rules.
The rules automatically strike out any colleges with compliance or unlawful conduct notices, legal proceedings or external administration.
Colleges must have industry links and references which guarantee that the students have the skills required for employers andpass rates of 50% or more in eligible courses.
Within all colleges, all caps on student numbers apply to specific courses and only for the provisional period.
For private colleges:
- If the pass rate of the approved course is 75% and above, the college will be able to enrol 10% more students than their existing numbers in that course.
- If the pass rate of the approved course is between 50-75%, the college will be able to enrol 25% less students than their existing number in that course.
- Courses with a pass rate below 50% will not get access to loans.
While all public providers will be approved under new transition scheme, similar rules will apply to set public course caps except where public colleges have a course pass rate of below 50%. In the transition period, those colleges will be able to enrol students covered by loans but their cap will be cut in half.
Birmingham said the provisional rules were designed to reward providers who have high student completion rates and proven links to industry and business.
“These provisional approval requirements will ensure that high quality vocational education providers can continue to deliver courses that students and employers value while those providers apply for longer-term access to VET student loans.”
