CCA releases statement on expansion of VET Student Loans

CCA has released a Statement on the proposed expansion of VET Student Loans (VSL) to Certificate III and IV levels. In the Statement, CCA expresses its serious reservations about the expansion of VSL to Certificate III level.

Background to the Statement

Currently, VSL are limited to students enrolled in approved courses at diploma level or above. As a lead-in to the current Commonwealth-State negotiations regarding the new National Skills Workforce Agreement, the Productivity Commission encouraged governments to think about expanding course list to Certificate III and IV courses.

The NSW Government’s Review of the vocational education and training sector commits to “work with the Commonwealth Government and advocate for an income-contingent loan scheme for Certificate III and IV to be introduced via the new National Skills Agreement …. to increase student access and remove a financial barrier to people studying VET qualifications.”

Only 25 not-for-profit providers utilise VSL nationally, of which only 4 (2 in New South Wales and 2 in Victoria) can be classified as “community-based” – the others are speciality or faith-based organisations (see breakdown below). A CCA member survey shows there is very little interest from adult and community education (ACE) providers in VSL, and unlikely to change in the medium future. CCA does not foresee that an expansion of VSL to Certificates III and IV will assist the Australian not-for-profit ACE sector as a whole, and anticipates a negative impact on our sector’s ability to undertake its work.

Expansion of VET Student Loans to Certificate III

The CCA Board of Directors recently resolved to express its serious reservations about the expansion of VET Student Loans to Certificate III level. These reservations are based on a number of factors:

  1. The history of how a significant number of private-for-profit VET FEE-HELP providers systematically rorted the previous scheme, which has been called “the most disastrous education rort in Australia’s history,” by The Sydney Morning Herald. (CCA has catalogued a number of the problems with the earlier scheme here, here and here.)
  2. The strong possibility of how debt could be added to many disadvantaged households and individuals, who could be misled into believing that the training is essentially free – consistent with how VET FEE-HELP was marketed by for-profit providers to many disadvantaged, including Indigenous people – and thus confusing possible students who could be eligible for substantial fee relief from government-funded programs such as the NSW Smart & Skilled and ACE Programs. CCA also has concerns that many students may not have the skills (because of limited English or other issues) to understand fully the implications of the loan agreements they sign up for.
  3. The importance of aligning training with actual job opportunities, many of which may be limited during a long economic recovery.
  4. Many CCA members report no difficulty at setting up “payment plans” for their students to pay for training that is not subsidised, with very few students defaulting.
  5. The strong possibility that the price for qualifications will increase under an expanded loans program: it is well-documented that there is no effective “supply and demand market” for most training qualifications – the availability of loans through VET FEE-HELP actually increased the price of training (with no concurrent increase in quality), simply because private providers could do so, as students had no accurate basis for cost comparison – or indications of quality delivery.

CCA also notes:

  • There is a diversity of opinions among CCA members on this matter;
  • A much deeper analysis as to the unintended consequences of extension to Certificate III needs to be done, as we believe that such an analysis will provide concrete evidence of many of the potential difficulties we outline; and
  • The Australian Government Department of Education, Skills and Employment (DESE) has not yet commenced consultations on VSL expansion; if and when it does, CCA will undertake a formal submission to the Commonwealth.

View the CCA Statement here (PDF).

Certificate IV and VET Student Loans

In terms of Certificate IV, CCA notes that there is a possibility certain qualifications could be funded through VSL, but this too should be subject to a substantial analysis of the unintended consequences of such funding, both on learners and providers, especially not-for-profit community providers.

VET Student Loans Provider Breakdown

According to the DESE, there are173 VET Student Loans providers:

  • Private for-profit RTOs     110
  • TAFEs                                    23
  • Universities                          13
  • Other government depts     2

Not-for-profit providers (25), of which:

  • Religious                                  6
  • NFP specific                           11 (drama, dance, air pilot, medical, counselling)
  • Unions/peak organisations 2
  • Indigenous                              2
  • Community                            4

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