As the TAFE system continues to compete with private
vocational education and training colleges, the need to enhance existing
financial models, and secure additional funding is bringing innovation and
growth to the sector. Despite this class sizes continue to rise as back office
resources continue to be reduced.
Changes made in 2010 opened up VET FEE-HELP to the
Vocational Education and Training sector. The change was designed to allow
students who otherwise were unable to afford the fees of a private college the
opportunity to study, gaining work based skills.
In 2012, then NSW Premier Barry O’Farrell, cut $1.7 billion
in government funding to NSW TAFE’s resulting in an estimated 800 job losses,
increasing class sizes which resulted in a reduction in the number of students
graduating.
As TAFE began to compete with the private education sector for
students – and therefore the funding they needed to stay in business – profit
seemed to become the determining factor, rather than education.
TAFE has continued to supply accredited training,
continuing to produce the majority of graduates in trade qualifications, doing so more on the ‘smell of an oily rag’, making do with less despite having
to do more.
Analysis by the National Centre for Vocational Education Research has shown the public TAFE system remains overwhelmingly the dominant provider of trade based qualifications. The figures remain unchanged from 2010, with TAFE accounting for 80 per cent of graduates in the plumbing trade, while private colleges account for only 6 per cent.
An article in the Australian in April 2o16, also stated the research showed TAFEs also produced the majority of course completions across all qualifications.
Despite these statistics 75 per cent of the $3.1 billion in
VET FEE-HELP funding made between 2010 and 2014 went directly to private
providers.
While there are many honourable and honest private colleges,
the private education system has been rocked by almost daily announcements of
investigations into dodgy colleges.
During the 2016 election campaign, Opposition Treasury
spokesman Chris Bowen announced a proposed $8,000 annual cap on VET FEE-HELP
loans. Higher Education Spokesperson Kim Carr said the proposal would provide
“… protection for students and reduce the call on the budget…”.
Currently the scheme allows students to access $100,000 in
study loans, with no annual cap and no call to repay the loans until the
student is earning $54,000 per year. It is this opportunity that has seen
course fees in the private education sector sky rocket.
“The average cost to providers is less than $4000,” Mr Carr
said in an interview with The Australian on the 10th of June 2016.
“There would still be room for companies to continue making a profit but
nothing like the $20,000 course fees we’re seeing now.”
Recent research provided by the Labor party shows students
attending a private college course in Salon Management are being charged more
than $32,000 while the same qualification provided by NSW TAFE, is at a cost of
$6,990.
In today’s world everything is about perception and the
current perception of the Vocational Education and Training sector is one that
brings up images of the Wild, Wild, West.
Mavericks, card sharks and cowboy
operators have taken the opportunities available and turned the industry into
O.K Corral, muddying the reputations of not only the legitimate operators but
the industry as a whole.
From sky rocketing course fees to phantom students rogue
operators appear to have infiltrated the VET sector.
In attempt to overhaul the VET FEE-HELP Scheme, the Turnbull
Government froze the loans available to private colleges to the same amount as
claimed in 2015. What this meant was if a college had billed the government for
$50 million in 2015, it would be unable to claim more than $50 million in 2016.
As the crackdown on private colleges claiming billions from
the Federal Government has been praised by the TAFE industry, the reality is
there are now tens of thousands of students, mortgaged to the back-teeth who
will never graduate from their courses.
Sales tricks such as; study now and pay later, or free
iPad’s on signing up to the course are rife, with the Australian Competition
and Consumer Commission taking court action against Sydney based college Unique
International. After an audit by the ACCC found Unique International had only a
2.4 per cent graduation rate (despite billing the VET FEE-HELP for more than
$57 million in loans paid as upfront fees to the college), the ACCC took the
college to the Federal Court claiming the college engaged in unconscionable
conduct.
The case, currently before the Federal Court has heard allegations
that Unique International relied heavily on students in very remote areas,
undertaking a deliberately targeted approach to secure them with various
incentives.
In its Statement of Claim, the ACCC alleges Unique
International deliberately targeted illiterate and disabled people living in
remote Aboriginal communities, with staff alleged to have traveled the country
with boxes of laptops and iPads to give to anyone who signed up to an online
course costing between $22,000 and $25,000.
While this is the first time the ACCC has taken a private
college to court, it’s not the first private college to come under fire
including Careers Australia Education Institute which in an agreement with the
ACCC has seen the training provider forgo tens of millions of dollars in
funding.
As both sides of the political divide attempt to come up
with a resolution, the reality for TAFE is a loss of revenue and resources
that need to be made up from somewhere. TAFE, no longer ensured a secure and
steady stream of government funding, are being forced to innovate to deliver.
Entering new markets and developing strategic partnerships –
both nationally and internationally – is one opportunity that TAFE needs to
explore if they are to remain open for business in the coming years. Both TAFE
and Private VET providers are embracing emerging markets and capitalising on
their abilities to apply entrepreneurial know-how in order to align existing
organisational strengths to focus on my specialised skill sets.
By entering into strategic partnerships, education providers
in the VET landscape are able to diversify their revenue streams, protecting
themselves against further government funding cuts and enhancing their
abilities to deliver top notch education to their students without being the
victims of the winds of change.
Mike Cullen has recently returned to Akolade after
a period as the conference producer for one of Australia's leading economic
think tanks. Mike began working in the conference industry in 2007 after
looking for a career change from the high pressured world of inbound customer
service. Mike has worked for some of the most well-known conference and media
companies in the B2B space and in his spare time is working on his first novel
in a planned Epic Fantasy trilogy.
Mike’s most recently published story, Seeds of
Eden, is featured in the Sproutlings Anthology released in March 2016.