Major reforms to shake up VET industry, loans scheme scrapped as of 1st December 2016

Vocational education, the great hope of the Gillard government to boost Australia’s skills based is an unmitigated disaster. The sector is expected a blowout of $3 billion in public debt this year. While its completion rate for courses is delivered online hovers around 6%. So how did it go so wrong?

Starting in 2012 the Gillard announced that publicly funded TAFE’s must now compete with private institutions who has shifted most of their learning online. As a result, the private market had access to public student loans while under its restructure, TAFE had to close its campuses, 5000 jobs were made redundant and lost 100 000 students to institutions that offered more flexibility in learning.

Australian TAFE’s loss has been the private sectors gain. Until 2015, private providers could recruit as many students as they see fit using any means possible e.g. laptops and free courses were handed in around the country, in exchange for students signing up to thousands of dollars of public debt which they didn’t have to give back until they earned $55000 per annum.  

The former Vocational Education Minister Scott Ryan said the scheme “has quite frankly been a disaster for taxpayers. The uncontrolled growth of the scheme is completely unsustainable.”

Federal Education Minister Simon Birmingham has pledged to take a leading role in rebuilding the sector over the next term.

“It’s become apparent that to truly fix the VET FEE-HELP scheme we first need to axe it. The scheme has been fundamentally broken from its design and we need to build a replacement model from the ground up.

“From December 31 this year, no further loans will be issued under the VET FEE-HELP scheme. We will bring in place a new scheme, TAFE’s and public providers will be provided with automatic entry into the new scheme. Private providers will have to meet strong and clear tests and those tests will be related to their relationship with their employers, employment outcomes, satisfaction of their students, completion rates and compliance with regulatory settings,” he said.

Just how successful they’ll be at transforming a sector that has cost taxpayers dearly remains to be seen. What are your thoughts on this matter?

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