Loan Sharks And Shonks To Go In Vocational Education Overhaul

A brand new education model is on the way.

05/10/2016 8:18 AM AEDT | Updated 05/10/2016 10:45 AM AEDT
Fairfax Media
Education Minister Simon Birmingham is overhauling the vocational loans scheme

CANBERRA – Cold calls and over the top inducements to prospective students are expected to be things of the past, and student loans will be capped, in the Turnbull Government's overhaul of the vocational education and training sector - known as VET.

Education Minister Simon Birmingham announced Wednesday the troubled Labor initiated VET FEE-HELP scheme will be shut down later this year and replaced in January 2017 by a "new model built from the ground up" design to rein in cost and stop systemic abuse.

The Minister has reached out to Labor, which has its own VET overhaul plans, to help pass the proposed overhaul and flagged releasing the legislation next week.

Andrew Meares, Fairfax
Education Minister Simon Birmingham says a new VET model will be "built from the ground up"

Since the VET FEE-HELP system was expanded by Labor in 2012, unscrupulous educators and high-pressure brokers have exploited students by luring them into unwanted courses and loans, sometimes without their knowledge.

The Education Minister has told the Huffington Post Australia that rorts in the system will be stopped.

"VET FEE-HELP has been a monumental disaster," Senator Birmingham told HuffPost Australia.

"It has sadly seen billions of taxpayers' dollars wasted and that of course has hurt students, the reputation of the VET sector and will leave taxpayers with a lasting legacy debt that we will have to clean up."

"We know believe that the best thing to get the bad providers out and to clean it up for the future is to actually replace the scheme and set a whole new model."

Providers and brokers will be prohibited from directly soliciting students, while VET courses eligible for government funded student loans must be aligned with industry needs and have a high likelihood of leading to "good employment opportunities."

The Minister has highlighted courses such as a diploma of fashion styling, a diploma of veterinary Chinese medicine, the diploma of arts counselling and the diploma of energy healing.

Rather than skyrocketing loans, there will be three bands of loan caps at $5,000, $10,000 and $15,000 that would be set for courses depending on their delivery cost

"It has tough barriers to entry for providers, restrictions on courses and restrictions on the loan values that can be offered, so we can have confidence that only genuine students are studying worthwhile courses and quality providers will be receiving taxpayer funds," he said.

Labor's higher education plan would see VET student loans for private vocational education and training capped at $8000 which it says will "restore integrity to the training system".

As for any student already signed up to an unwanted course or over-extended by a loan, Simon Birmingham said it is time to stand up.

"Students who have been signed up against their will or knowledge who might have been misled into signing, in those instances we urge them to report the behaviour so we can take the action against those providers," the Minister said.

"The ACCC is working very hard and (we have) seen some of those debts waived."

The new scheme is expected to save more than $7 billion over the next four years and $25 billion over the next 10 years.

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