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107 Sir Donald Bradman Drive
Hilton SA 5033



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A damning report from the Auditor-General handed down today has further highlighted the former Labor Government’s failures to understand the serious flaws in the design of its student loans scheme for vocational education that lead to billion dollar cost blowouts and unscrupulous training organisations preying on vulnerable students.

Minister for Education and Training Simon Birmingham said he welcomed the ANAO’s report on the administration of the VET FEE-HELP scheme as the “final word” on a scheme that even former Labor Attorney-General Michael Lavarch described as “the worst piece of public policy I have ever seen”.

“The ANAO has made it clear that Labor did not ‘effectively design or administer’ the VET FEE-HELP scheme despite various warnings about the devastating financial and personal consequences their policies would have on students and Australia’s respected vocational education sector,” Minister Birmingham said.

“VET FEE-HELP is an indictment on those Labor Ministers who designed it, many of whom still sit on the Opposition frontbench. They should hang their heads in shame and apologise for the distress and damage they’ve caused.

“This report clearly spells out the extent of the mess Labor made of VET FEE-HELP which opened the floodgates to shonky providers who ripped off vulnerable students and taxpayers. 

“As the ANAO points out, once data emerged highlighting the issues with VET FEE-HELP the Coalition acted to close Labor’s loopholes. While the 20 measures our government put in place over 2015 and 2016 have stemmed some of the losses in VET FEE-HELP, with total 2016 loans projected to be hundreds of millions of dollars lower than in 2015, it is also clear that a completely new program was essential to weed out the rorters and restore credibility to VET.

“The rorting and rip-offs that Labor’s VET FEE-HELP scheme allowed are why the Turnbull Government introduced the new VET Student Loans program, which will come into effect from 1 January next year.

“The new safeguards we’ve put in place mean students can have confidence that the training they are receiving is aligned to workplace needs and strong employment outcomes, and is being delivered by training providers who have met the tougher benchmarks we have set. At the same time, taxpayers can have confidence the loans the Government is providing are for genuine students, learning skills that will contribute to the economy and increasing the likelihood the loans will be repaid. 

“VET Student Loans recognises the importance of high-quality vocational education providers and the new program will ensure they can continue to deliver for current and future generations of students.”

Minister Birmingham said he would ensure the learnings the ANAO highlighted would be taken into consideration in the implementation of VET Student Loans and that many of the recommendations are already in place.

“Importantly the VET Student Loans program has robust systems in place to ensure students aren’t lured into the sorts of circumstances we’ve seen under Labor’s failed VET FEE-HELP scheme so that we don’t face those problems again in future,” Minister Birmingham said.

“The specialist student complaints team in the Department of Education and Training that we’ve set up and the future VET student loans ombudsman have additional resources to receive, investigate and help resolve issues students may be facing. So far the Department has helped get more than 1,835 HELP debts fully or partially recredited since May this year worth around $16.8 million and we have joint court action with the ACCC against four different providers.

“The Turnbull Government’s VET Student Loans program will deliver an estimated reduction in total outstanding student loans debt of more than $7 billion across the forward estimates and $25 billion over the next 10 years.

“VET Student Loans will ensure students and taxpayers are protected, help address skills shortages and restore the reputation of the vocational education sector. 

“We’re already hard at work ensuring there is a smooth transition for current VET FEE-HELP students and training organisations. More than 16,000 students have already opted to be grandfathered from VET FEE-HELP and the Department has so far given provisional approval for 118 training organisations to deliver VET Student Loans in 2017.

“Before Christmas every student will have been contacted by the Department detailing what they need to do to continue their training and the Department will have assessed and contacted all training providers that have applied to deliver courses through VET Student Loans before the end of this year. 

“We have rebuilt the system from the ground up to restore confidence in the VET sector and reassure taxpayers that the rorts are over.”
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