VET Student Loans First Six Months: The Results Are In

The Australian Government Department of Education and Training’s VET Student Loans program has been operating since 1 January 2017, and the Department has published its first six monthly report, covering the period up to 30 June 2017.

VET Student Loans (VSL) “offers income contingent loan support to eligible students studying Diploma level and above vocational education and training qualifications. The program has replaced the much-abused and widely discredited “VET FEE-HELP”, which ended on 31 December 2016.

The first six months of VET Student Loans are a “transition period”. All of the 167 registered training organisations (RTOs) that operated as approved VSL course providers during the transition period from 1 January 2017 to 30 June 2017 were previously approved as VET FEE HELP providers. (Provisional approval for VET Student Loans for the transition period was open only to existing VET FEE HELP providers.)

A total of 24,492 students received loans to study with one of the 167 approved course providers, comprised of:

  • 23 TAFEs;
  • 12 “other public” organisations (mostly Australian universities); and
  • 132 private providers.

During the first six months of VSL:

  • All of the top ten providers were public providers, in terms of student numbers (all TAFES, plus RMIT and Swinburne University).
  • Nine of the top ten providers ranked by value of loans paid were public providers (the sole private institution is Basair Aviation College, with loans paid of $1,829,193, just ahead of TAFE SA).
  • Loans of $78 million were paid to approved course providers.
  • Only 138 of the 167 provisionally approved course providers had actually accessed a VET Student Loan.
  • The highest ranking courses were (in order) Diplomas of Nursing (by far the largest, with 3,584 enrolments and $13,085,317 loans paid), Early Childhood Education and Care, Community Services, Screen and Media, Beauty Therapy, Business, Counselling, Remedial Massage, Music Industry, Visual Arts and Accounting.

The report also notes that, “From 1 July 2017, more than 100 providers are approved to deliver VET Student Loans under the full program, and an additional application process is expected to take place later in 2017.”

Community Colleges Australia Comment

Community Colleges Australia (CCA) makes the following observations:

CCA welcomes the demise of VET FEE-HELP, and congratulates the Commonwealth Government on getting rid of the scheme. CCA’s concerns are that while the new scheme appears to be a much smaller, immensely cleaner, and clearer version of VET FEE-HELP, it does very little to address the lack of Australian Government national policy on the future of vocational education and training.

The most active organisations participating in VSL are TAFE colleges, a great improvement on the shonky private providers which undertook millions of dollars of VET FEE-HELP loans. CCA is pleased that the public institutions are the largest provider recipients of loan funding from VSL.

Participation of not-for-profit community providers: Only three not-for-profit community providers (WEA Hunter, Kiama Community College and St George & Sutherland Community College) are included on the initial list of 167 providers, although only (Kiama) has chosen to participate with actual loans. A very small number of other not-profit organisations are participating in VSL, many of them religious-affiliated educational institutions.

Despite numerous representations by CCA, reporting on types of providers by the Australian Government does not differentiate between “not-for-profit” providers and “private for-profit” providers, lumping them both in the category of “private” providers. The business models of community and other (such as church institutions) not-for-profit providers and the for-profit providers are very different. This lack of differentiation by the Australian Government Department of Education and Training is a policy oversight of significant proportions, with implications for VET delivery across many areas. The Department’s policies do acknowledge the important work that community not-for-profit providers undertake in providing Australian vocational education and training (VET) – delivering more than 5% of government-funded VET (especially to the many of the most vulnerable and disadvantaged Australians), and at least double that percentage in regional and rural locations.

Demographics of students: The current report does not include any information on the demographics of students who have received loans from VSL. Who are they? Where do they live? How old are they? How do they differ from students of other VET courses?

Few non-metropolitan students: The six month report does not indicate the residential locations of the 24,492 students who participated in VSL’s first six months. However, given that the courses are offered at the Diploma and Advanced Diploma level – and that the majority of VET demand and activity in regional, rural and remote Australia is for Certificate III and below – it is certain that the overwhelming majority of students live in metropolitan Australia – a part of the country already well-served by extensive educational choice.

Few non-metropolitan providers: While it is not possible to determine which VSL providers are based in capital city locations, and which ones are based in regional and rural locations, an initial sampling indicates that the overwhelming majority of the 167 providers listed in the report are based in capital cities (although some have multiple locations). The construction and implementation of the VSL scheme – with its emphasis on Diploma and Advanced Diploma courses and (primarily) capital city workforce needs – means that most regional and rural providers are effectively (although not officially) excluded.

Wither regional and rural VET: On the basis of the previous two points, it is clear that the VET Student Loans program is not positioned to assist regional and rural VET, where VET is at least 50% more important than in metropolitan areas. Where is the Australian Government VET policy or program that assists regional, rural and remote Australian needs? CCA has researched the importance of regional and rural VET (PDF document, opens in a new tab), and the special place that community providers have within it.

Community providers in the future VSL: The list of VSL “approved providers” beyond the just completed six month VSL transition period are not yet public, however it is likely that very few not-for-profit community providers will be participating in VET Student Loans. CCA will report more on this matter soon.

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