Student loans for the private vocational education and training (VET) sector could be capped and restricted to certain courses, a government discussion paper has suggested.
It also proposed an ombudsman be appointed for the sector, which has been plagued with scandals.
The vocational education minister, Scott Ryan, said the discussion paper and the resulting consultation was designed to improve training outcomes and stop egregious practices which have led to court cases and police raids.
Vulnerable students have been exploited and forced into debt in substandard courses since the fee scheme was introduced in 2012.
Ryan, who has been minister since February, said the discussion paper was open for consultation until June. The document would form the basis for the Coalition’s policy on private vocational education and training in the election.
“I decided we needed fundamental reform and frank analysis to outline options,” Ryan said. “We have two months for the sector to look in detail at the options so we hear all voices in the system and then, if I am minister after the election, we can hit the ground running.”
Ryan blamed the scheme’s faults on its initial design by the previous Labor government.
But the Labor senator Kim Carr said the paper was a waste of time and urged the minister not to further delay reform.
“It’s a nonsense to blame the predecessor,” Carr said.
“We had a Senate inquiry into this, we had interrogation through Senate estimates, we have had constant media coverage, we have colleges before the courts, we have had federal police raids twice into one of these colleges. It is not like the offences are unknown.
“The minister himself says there are ‘predatory’ brokers, but does nothing about it again. We moved to have caps on course costs and the government voted against it. We moved to have lifetime debt limits and the government voted against that.”
Evidence from a Senate committee found blowouts in funding for colleges with very low success rates. For example, the AIPE college received $109,957,263 in 2014 on an initial enrolment of 8,814 students. Of those, 117 students graduated. Cornerstone Investments received $46,136,016 on an initial enrolment of 4,251 students. Of those, only two graduated.
The discussion paper outlines a broad range of options, including whether it is “reasonable” for the commonwealth to:
- specify the maximum fees providers can charge for each VET FEE-HELP course or unit;
- specify the maximum loan amounts available to students for each VET FEE-HELP course or unit;
- target its investment in VET FEE-HELP to courses that align with industry needs, employment outcomes, result in a public good or provide pathways to higher education;
- ban brokers who sell courses to students;
- appoint an ombudsman, which under its powers could only be specific to commonwealth programs;
- apply an overall financial cap on the scheme;
- “reset” the scheme by requiring all existing providers to reapply for VET FEE-HELP.
Ryan rejected Labor’s criticism that the Coalition had not acted soon enough, and said the scheme’s normal growth had begun in 2013, before the government found “egregious practices” in 2014-15 and moved to freeze fees and commit to a redesign this year.
“I am looking for a genuinely open and frank discussion and we are looking to drive quality training outcomes and remove poor incentives,” he said.
