The long tail continues – the Australian for-profit vocational education and training is still in crisis

Dr Don Perlgut, CEO of Community Colleges Australia (CCA), comments on the latest VET news in this article.

The “long tail” of impact of the much discredited and severely abused Commonwealth Government vocational education and training (VET) loans scheme, VET FEE-HELP, continues.

Last week’s article in the Fairfax press (“Former Sage students still in limbo over lost course and money”, by Lucy Cormack, Sydney Morning Herald, 21 July 2017) reports that:

A former student of the now defunct Sage Institute of Fitness … journey to full-time paid employment came to a halt earlier this year when the college collapsed amid the VET-FEE HELP Scheme scandal.

Roughly 1600 students and 200 staff were left in limbo when the college closed in March, despite it earning $32 million over two years through the now-scrapped VET FEE-HELP loan scheme.

The student has been unsuccessful in obtaining a refund of her loan fees, which are still outstanding to the Australian Government, according to the Australian Taxation Office.

It should never have been thus – a loan scheme that allowed to run for years after it was clear that numerous abuses were occurring. And for which all the major political parties share responsibility.

CCA understands that of the 280 organisations that had VET FEE-HELP accreditation, some 30 have been investigated by the national regulator, the Australian Skills Quality Authority (ASQA).  While 30 out of 280 does not necessarily sound like a lot, but that represents about 11% and many thousands of students: within this 30 were providers which had some of the largest numbers of students, thus impacting many people. That’s a significant failure of quality and consumer protection.

The Australian Government Department of Education and Training’s own figures also show a consistent pattern of how disadvantaged and vulnerable students fared the worst out of the scheme: disadvantaged students accrued higher fees/debts compared to non-disadvantaged students, particularly Indigenous and low socio-economic status students. This table of mean (average) tuition fees in 2015 shows how disadvantaged students were impacted, inexplicably paying about one-third more for the same course.

Characteristic Face-to-face Online Mixed-mode Mean annual tuition fee
Indigenous $20,448 $19,875 $18,007 $19,977
Non-Indigenous $12,972 $16,515 $12,042 $14,328
Quintile 1 (low SES) $15,153 $18,127 $12,970 $16,193
Quintile 5 (high SES) $11,555 $15,114 $11,151 $12,835

Source: Australian Government Department of Education and Training, April 2016.

The conclusion: those who promote the idea that Australian VET is a proper “market” are wrong. In well-functioning markets, consumers not only have choice, but also good information about the products or services and the comparative prices. Australian VET in particular – in common with much of education – is not an easily evaluated product. As the Department of Education and Training report noted:

  • A large proportion of VET FEE-HELP loans went to courses with no links to industry needs or student employment outcomes; and
  • The scheme dulled price signals … no upfront costs led to the perception that courses were free, and some providers promoted the courses as free.

What can we learn from this? The Australian Government – in concert with the state and territory governments – needs to take a comprehensive look at Australian vocational education and training. The new scheme, VET Student Loans, avoids the abuses of VET FEE-HELP, but does little to address the national policy vacuum. And the answer is not all about returning to the “good old days” where TAFE reigned supreme. VET is now one of Australia’s great policy disasters – a “broken system”, in the words of Professor Peter Noonan – a case study in what not to do, the result of a long series of uncoordinated national and state policy and program decisions that is undermining a strong system that has the potential to be one of Australia’s great equalisers and engines for economic growth.

Take three examples: Aboriginal and Torres Strait Islander (Indigenous) Australians, rural and regional residents, and Australians with lower wealth and income. In each case, VET is their “leg up” into economic and societal participation.

According to the National Centre for Vocational Education Research (NCVER), Indigenous Australians consistently participate in VET at exactly double the rate of non-Indigenous Australians: 18.7% compared to 9.3%. The correlates with Indigenous participation in university education running at about one half of non-Indigenous Australians: 3.6% compared to 6.7%.

VET participation rates for rural, regional and remote residents run at least 50% higher. In New South Wales, it is even more marked, with 6.3% participation in metropolitan areas, 11.9% inner regional areas, 14.6% outer regional areas, 15.4% remote areas and 18.5% very remote areas.

My sector – the not-for-profit (NFP) adult and community education (ACE) providers – continues to be ignored by the Commonwealth and most other governments when framing VET policy. What a shame, and what a waste of community resources. Because our sector can do so much more.

The community sector characterised by:

  1. Strategic flexibility, able to employ a wide range of tools;
  2. Not being bound by government structures in the way that TAFEs are;
  3. An ability to complement state and national policies that develop job skills, encourage economic development, enable citizen participation and increase human and social capital;
  4. Not beholden to private shareholders to make profit in the way of for-profit providers; and
  5. Freedom to take considered risks.

This strategic influence exists because of the sector’s historic commitment to:

  • invest in local communities;
  • respond to the needs of vulnerable and disadvantaged Australians; and
  • provide small class sizes, personal support focus, and collaborations with social service agencies.

Interested in participating in this debate about what the ACE sector can do? It’s not too late to sign up for CCA’s annual conference, commencing this week in Melbourne on Tuesday evening (25 July), and running all day Wednesday and Thursday (26-27 July). Come hear Professor Peter Noonan, Professor Erica Smith, Professor Rodney Maddock and others describe a future for community VET. Included will be the first-ever “Community Education Student of the Year” Awards on Wednesday evening, with eight finalists from New South Wales, Victorian and Queensland providers.

Our Conference on Twitter: #CCA2017invest

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