VET FEE-HELP 15 Months On – An “Epic Fail” Still Causes Pain

Last week, the Sydney Morning Herald and Melbourne Age released the results of an investigation into the continuing pain caused by the Commonwealth Government’s income contingent loans program for vocational education and training (VET).

The Sydney Morning Herald article describes it as, “the biggest public policy scandal in Australian history: the systematic rorting of the vocational education and training system.”

That’s VET FEE-HELP, the much maligned and heavily abused income contingent loans scheme for Australian VET students that operated until the end of 2016.

From a Sydney Morning Herald editorial on 23 April 2018: “Government attempts to promote and extend vocational training have undermined vocational training, destroying students’ trust and the credibility of even decent providers, saddling young people with ridiculous debts, enriching rorters and costing taxpayers billions of dollars. Epic fail.”

In an article entitled, “How Australia's education debacle is still creating victims”, Farrah Tomazin writes (Sydney Morning Herald, 22 April 2018):

“Fifteen months after the Turnbull government finally scrapped the VET FEE-HELP scheme and replaced it with a stricter model known as VET Student Loans, a Fairfax Media investigation has found the enduring impact of the fiasco is worse than expected.

“It has cost taxpayers more than $7.5 billion, according to government figures, including billions of dollars in rorted loans and bad debt that the federal Education Department concedes will never be recouped.

“An analysis of figures from the Student Loans Ombudsman shows that the federal watchdog received 4153 complaints relating to VET loan assistance between July and December last year, the first six months of its operation, and ‘it is likely there will be future peaks’.

“In the final three months of the year, 566 of those complaints involved people discovering a debt only after they had earned $55,874 – the threshold at which students must begin repaying their loans to the government.

“But insiders believe this is just the tip of the iceberg. Fairfax Media can reveal that in 2016, the Education Department wrote to 524,477 VET FEE-HELP loan students inviting them to continue their studies under the new loans system in 2017. Only 75,248 responded.

“Of the 449,229 students who did not respond, little is known. Did they ever intend to complete their course? Did they even know they had been enrolled in one?”

Read the full article here.

VET Assistant Minister Karen Andrews stated: “The single biggest issue is the reputational damage done to the sector”, which she accepts has led to students being so distrusting of the system they may never turn to vocational education at all.”

Community Colleges Australia (CCA) comments:

“VET FEE-HELP is a symptom of a deeper malaise in Australian public life, one that assumed that the privatisation of public educational (and other) services was a good thing, that somehow an efficient ‘market would provide’ when public funding was given out. What we know now – and should have recognised then – is that this simply is not true. Education is a public good. The marketisation of Australian public services has never been more problematic than in the VET space. Education should not be a buy-and-sell commodity,” said Dr Don Perlgut, CEO of CCA.

Even the Commonwealth’s economically dry Productivity Commission acknowledges that fact, writing in August 2017:

“The expansion of VET FEE-HELP access after 2012 is a well-documented example of how policy can fail if governments do not ensure proper policy design along with suitable regulatory oversight. This policy failure has caused considerable uncertainty and reputational damage to the sector as well as diverting government resources and focus to develop new policies to repair the damage.”

Read the Community Colleges Australia’s statement on the replacement program, VET Student Loans (15 March 2018).

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