The Turnbull Government’s legislation to rebuild vocational education and training has passed the Parliament, delivering a system that students and taxpayers can trust and ending the rip-offs and rorts that plagued Labor’s failed VET FEE-HELP scheme.
Minister for Education and Training Simon Birmingham said the new VET Student Loans program would begin from 1 January 2017 and secure the future and reputation of Australia’s high quality vocational education and training system.
Minister Birmingham said VET Student Loans will provide value for money to both students and taxpayers via tougher barriers to entry for providers, properly considered loan caps on courses, stronger course eligibility criteria that aligns with industry needs, mandatory student engagement measures, banning brokers and commission-based sales tactics that reward enrolment over student progress, and a stronger focus on students successfully completing courses.
“The Turnbull Government’s new VET Student Loans program will replace Labor’s failed VET FEE-HELP scheme which opened the floodgates to shonky providers who ripped off vulnerable students and taxpayers,” Minister Birmingham said.
“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 important role high-quality vocational education providers have and the new program will ensure they can continue to deliver for current and future generations of students.
“VET Student Loans will ensure students and taxpayers are protected, that skills shortages are addressed and that the reputation of the vocational education sector is restored.
“We have rebuilt the system from the ground up to restore confidence in the VET sector and reassure taxpayers that the rorts are over.”
Minister Birmingham said the passage of the legislation would deliver an estimated reduction in total outstanding HELP debt of more than $7 billion across the forward estimates and $25 billion over the next 10 years.
The new VET Student Loans program will:
- limit eligibility to courses to those that align with industry needs and have a high likelihood of leading to employment opportunities
- cap loans at $5,000, $10,000 and $15,000 to reflect the cost of delivery (with higher caps for courses with high delivery costs such as aviation)
- require students to regularly engage with the VET Student Loans online portal to ensure they are active and their enrolments are legitimate
- set a much higher bar for providers to enter the program, with a new application process to assess providers’ relationships with industry, student completion rates, employment outcomes, and their track record as education institutions
- strengthen legislative, compliance and payment conditions, including increased powers to suspend poor performing providers from the program, cancel their payments and revoke their approval
- ban brokers, cold-calling, providers using third party lists to contact students, or incentive-based sales tactics
- limit the subcontracting of training to stop providers ‘selling access’ to higher-fee loans arrangements to training organisations that don’t meet the higher bar to qualify.
The legislation also includes further measures to strengthen student protections and improve the availability of information about VET student loans through:
- the establishment of a VET Student Loans ombudsman to provide students with an effective independent dispute resolution mechanism
- the creation of a specialist complaints team within the Department of Education and Training with additional resources to receive, investigate and help resolve student complaints in advance of the ombudsman starting
- more and faster public reporting of information about loans, approved courses, completions and approved course providers to which loans have been paid
The VET Student Loans program will commence from 1 January 2017 but include arrangements for any current VET FEE-HELP students, who have not yet finished their studies, to opt-in to be ‘grandfathered’ through to the end of 2017. Those arrangements could extend beyond 2017 for students in exceptional circumstances such as illness or due to caring responsibilities.
Implementation arrangements for VET Student Loans are already underway:
- Training provider assessment criteria detailed and applications being received
- Eligible course list finalised
- Student loan caps for all course types set
The Bill package was passed with the support of Labor, the Greens and the crossbench.
Further information for students and providers is available at http://www.education.gov.au/vet-student-loans.