Interview on Triple J Hack with Tom Tilley
Student loan repayments; Redesigning VET FEE-HELP
05:41 PM

Tom Tilley: Alright, let's find out a little bit more about what the Education Minister plans to do to fix up the mess. And as you just heard, Simon Birmingham spoke today on that exact topic. He gave a speech at the National Conference of the Australian Council for Private Education and Training in Hobart. Minister Birmingham, great to have you on the show, thanks for joining us.

Simon Birmingham: G'day Tom, it's good to be back with you again.

Tom Tilley: We just hear more and more terrible stories about this sector. That story in that package around trainers and course admin offering to complete course work sounded ridiculous.

Simon Birmingham: Well that's an appalling story, and sadly there are far too many appalling stories. Now, the important thing I would say to anybody in those types of circumstances, where they have tried to get out of the course, given notice of removing themselves from the course, only to find they still have a debt at the end, they should formalise their complaint. We have many, many cases now that have been resolved where providers when put under a bit of regulatory pressure have waived the debt and acknowledged their wrongdoing and mistake, and millions of dollars have already been repaid. Of course, many more providers are currently before the Federal Court thanks to action the ACCC has taken in conjunction with my Department to make sure that we bring to justice those who have been doing the wrong thing, and in doing so get the fees waived and relinquished for people who were clearly conned into courses that they had no knowledge about or had sought to withdraw themselves from, only to be finding they're still racking up a debt.

Tom Tilley: Simon Birmingham, you make it sound quite simple to get those debts waived for people that think it has been unfair, but we've heard stories of people like Sean, I played a grab of his story earlier, from the Central Coast, signed up for a course, quickly realised it was being poorly run, tried to get out by the census date, then got clocked up 12 grand debt for his troubles, tried to get the money back. The providers wouldn't do anything. A lawyer quoted him 8 grand to help him through the administrative appeals tribunal process. It sounds too hard to sort this out for a lot of people.

Simon Birmingham: Look, the people who have real issues there ought to either contact the Debt Complaints helpline, which is 133873, or feel free to drop me an email at senator.birmingham@aph.gov.au, and look it up on Google of course, simply, and get in touch with us. We can apply pressure. Ultimately people have to have been misled. They have to have some degree of evidence, in a case like that one that they have sought to withdraw and that withdrawal was not acknowledged, acted by the provider. Clearly we can't just be waiving debts of people who knowingly signed up to something and then just didn't like what they got, and that's a different circumstance. But of course, what today's all about is really focusing on how we make sure we bring to an end this VET-FEE HELP scheme and replace it with something that will be of value to students and the Australian economy overall.

Tom Tilley: Yeah, I will get to that, but just to, I guess zone in what you're saying there, so a case like Sean's where he has evidence that he tried to pull out before the census date and they still clocked up the debt, you're saying it's very likely that he could get that debt waived.

Simon Birmingham: I'm certainly aware of numerous instances of actions like that where we have managed to get that debt waived. And indeed that provider would have been operating in breach of their rules and regulations, so I guess there are two actions there. For Sean, he'd be caring about getting the debt waived, for me, as Minister, I'd be wanting to make sure that we've also got action taken against that provider if they are-

Tom Tilley: [Talks over] Okay

Simon Birmingham: -operating in that kind of way.

Tom Tilley: Alright. Well, it was very generous of you to give out your email address there and say, you know, get in touch. But should the process be a bit more rigorous and supportive of these students? The Greens say there should be a fully-funded Ombudsman who advocates on behalf of students who deserve to have their dodgy debts wiped. What about that idea?

Simon Birmingham: Look, I think an Ombudsman can act as an advocate in certain circumstances, but we have processes in place for people to lodge complaints, to have them heard. There is a single hotline, the phone number I gave before, 133873, collecting and triaging complaints about all of the different issues in the VET sector, because some of them relate to this FEE HELP scheme, some relate to different aspects. So the matter's either for ASQA, the regulator, one of your contributors spoke about before, or indeed state authorities. So there are different people who can respond and indeed, of course, in other cases it is simply a clear case of consumer law breaches that would have the ACCC acting on, and they've been very strong in that regard.

Tom Tilley: You're listening to Simon Birmingham. He is the Minister for Education, and we're talking about cleaning up the VET sector. He gave a speech on that topic today. Right now, we've been zoning in on getting rid of the dodgy debts that some people have accrued. On the text line: I was lured into a Melbourne institution under similar premises. The price of the course wasn't revealed until after the census cut-off date. Now I owe in excess of 18 grand for one semester. Should that person get their money back?

Simon Birmingham: Tom, I can't give a rolling commentary on comments by- cases by text message, but if somebody has clearly been misled and not been given the appropriate information, and/or if they've taken steps to withdraw from a course before census dates, then obviously they should not have incurred a debt. 

Tom Tilley: Max has called in from Dubbo. What was your situation, Max?

Caller Max: Oh, I went to a private university. It was a few years ago. Yeah, it was $33,000 a semester. So 18 months, so $100,000 debt, and yeah, it was a pretty bad experience. There've been countless grievances and things like that, like the lecturers not turning up to classes, and the dean was extremely inappropriate, and two weeks' notice they actually moved the entire university from Canberra to Sydney, and we had intakes that had just signed leases and things like that, and after countless grievances and so forth, nothing was ever done. It's a very prestigious school as well, so it was really disappointing.

Tom Tilley: Why don't you name and shame, Max?

Caller Max: [Laughs] No, it was a hotel management school that I went to, so yeah [indistinct] …

Tom Tilley: So do you want your money back?

Caller Max: Oh, you know, it would be great.

Tom Tilley: [Talks over] Or the debt wiped.

Caller Max: Yeah, I'm stuck with this $100,000 debt. To earn at the threshold, [indistinct] …

Tom Tilley: Do you feel like you deserve it? Do you feel like- you made a decision to sign up for that course, do you feel like anything untoward happened? Do you take some responsibility for it yourself? Where do you stand?

Caller Max: Oh, absolutely. Absolutely. But for the rest of the kids and things like that – international students as well who didn't have the opportunity to have a HELP debt, they had to all pay upfront as a sum, like a lump sum payment, so people like that – just to be wary and things like that about what you're getting into. Yeah, try and not get dodged up too much like I did [laughs].

Tom Tilley: Yeah. Alright, thanks for the call Max.

Caller Max: No worries. Thank you.

Tom Tilley: Back to Simon Birmingham, the Minister for Education. Simon Birmingham, you said today that you're going to smash the business model of dodgy private colleges, but in your speech, you actually just gave a list of questions you're considering. When are we going to see some meaningful action?

Simon Birmingham: The Government's committed to a replacement scheme being in place next year. Today, I've outlined in the speech to the private education providers much of what I thought they'd done wrong and had gone wrong, the issues we were considering, and the type of approach we'd be taking in the design of a new scheme, and I highlighted that first and foremost, we need tighter barriers to entry on who can actually be involved in such a scheme. The way the Gillard Government structured the VET FEE-HELP clearly allowed people into that scheme to offer courses and to give out student loans who should never have been there, and they clearly didn't have the standing, the ethics, the links with employers, anything that you would expect that a provider should have. 

So first and foremost, actually a new scheme that will tightly restrict who can offer loans and who provides courses in this space. Secondly, a real focus on only supporting areas where the field of study is likely to deliver good employment outcomes and possibilities. Thirdly, having a look at the cost that is being charged and making sure the astronomical growth in fees that we've seen are tripling over just a few years being stamped out and wound back.

Tom Tilley: Okay. Someone's texted in, Simon, saying: I actually don't mind Simon. He seems pretty genuine for a politician. So there's a bit of support on the text line for you.

Simon Birmingham: [Laughs] [Talks over] That's very nice. Thanks Tom.

Tom Tilley: Now Labor have put forward- [laughs] no worries. The idea of- thank you to the Triple J listener, I guess. Labor have put forward the idea of capping the amount that you can borrow in VET FEE-HELP each year. They want to cap it at eight grand. You said the flat cap of eight grand is not the way to go. But is some kind of cap necessary?

Simon Birmingham: Some type of fee cap I expect will be part of the model we put forward. You have to recognise that different courses – nursing or agriculture or aviation – cost different amounts of money to deliver. So if you put a flat $8000 cap across every course, as the Labor Party proposed at the last election, you just end up with a circumstance where students faced upfront fees to access those courses, which of course would be inequitable for those students who couldn't afford to pay it. So we need a smarter model than what Labor proposed, and it needs to go a bit deeper than just a price cap. As I said before, the first thing you've got to consider is who you actually let in the door and give the license to offer these loans in the first place. So tight restrictions on who can do it, worry- thinking then about what courses, and then lastly, fee caps, but likely across different bands rather than just one flat one for everything.

Tom Tilley: Okay, interesting. Alright Simon, we've got to start talking about space exploration now, so we're going to have to let you go, but we do want you back on the program soon to talk about what's happening in the public university sector. We've been waiting for a clear plan since the deregulation plan in 2014 failed, so look forward to speaking to you about that very soon.

Simon Birmingham: Sure Tom, look forward to it. Cheers mate.

Tom Tilley: Simon Birmingham, the Education Minister.