The federal education and training minister, Simon Birmingham, has promised to introduce reforms to the vocational education sector by 2017 that will “smash the business model” of dodgy operators.
In a speech on Thursday the minister suggested reforms would target providers with little history of delivering training, “appalling” progression and completion rates, those that impose massive fee hikes on students or suddenly increase the number of enrolments.
The government has been consulting about reforms to the private vocational education and training (VET) sector after investigations into a number of providers revealed poor quality courses, low completion rates and unethical enrolment practices.
Birmingham told the Australian Council for Private Education and Training national conference in Hobart that unethical behaviour had tainted the reputation of the industry and was “a sad fact that we will all have to work doubly hard to overcome”.
He said unscrupulous brokers and providers had signed up unsuspecting Australians to loans they did not realise they were committing to.
“Incurring a debt without a learning outcome hasn’t benefited those individuals and it won’t benefit the economy,” said Birmingham.
The education department was undertaking 28 audits of providers and surveying students in 19 others to investigate potential breaches.
It had already revoked the status of four providers, issued three notices of intention to suspend and one notice of intention to revoke a licence.
“Our redesign of Labor’s flawed VET Fee-Help scheme will seek to smash the business models of anyone ripping off taxpayers or targeting vulnerable people, whether they be VET providers, brokers or data miners,” he said.
“Unacceptable practices and unethical businesses must be stamped out.”
Student loans for VET have become a major drag on the budget. The cost has blown out from $325m in 2012 to $2.9bn in 2015.
Birmingham said since 2009, students accessing the loan scheme for VET courses had increased by 5,000% and average course fees had more than tripled.
He was not yet in a position to announce the final reforms.
But he said suggestions for a redesigned scheme included a call to limit the amount of debt a student could incur for any one course and greater reliance on completion rates as an indicator of quality.
“People with little history in training in a certain field of study and limited or no employer support for their outcomes shouldn’t be enjoying taxpayer support to deliver such training,” he said.
“Appallingly low student progression and completion rates are not acceptable and should not be tolerated, not by any measure.”
Massive fee hikes should raise red flags and “obscenely high ramp-ups in enrolments” indicated “the likelihood is that something questionable is going on”.
Asked on Radio National whether the changes would affect students’ ability to get loans, Birmingham said: “We are confident that if we set loan amounts that actually reflect a reasonable cost of delivery, that we’ll see courses offered within those loan caps.”
He criticised Labor’s proposal of a uniform cap of $8,000 on loans because courses including agriculture and engineering may cost more than that.
He committed to roll out the new VET scheme in 2017 and acknowledged it was ambitious and “a lot will need to happen in a short space of time”.
“Australia’s new VET Fee-Help scheme must be fiscally sustainable, protect students and provide strong regulatory oversight,” he said.
“We must restore confidence and reputation to a sector that has taken a battering.”
The opposition vocational education minister, Kate Ellis, called for a VET ombudsman to be established and a full independent review of the sector “to ensure systemic problems are exposed and fixed”.
She accused the government of “letting shonky providers off the hook for too long” and cited “a revolving door of five ministers under the Liberals” as evidence of mismanagement.
“Labor has proposed an $8,000 per student cap on loans, with exemptions for legitimate high-cost courses, to stop students and taxpayers being saddled with massive debts so shonky providers can make a profit,” she said.
