Vocational students saddled with debts by private sector 'feeding frenzy'
|
Version 0 of 1. Vulnerable Australians have been exploited and saddled with debts after being enrolled in sub-standard courses in the private vocational education and training (VET) sector, a Senate inquiry report has found. The damning report, prepared by a Labor and Greens-dominated committee, called for sweeping changes to the system because easy access to government loans had left students and taxpayers as “the victims of a provider-led feeding frenzy”. The 16 recommendations include toughening quality standards and clamping down on access to VET Fee-Help, a Hecs-style loan scheme. The former Gillard government increased access to these income-contingent loans in 2012. The education and employment references committee’s proposals went further than the Coalition’s existing response to the problems in the sector, which included the government introducing new legislation to parliament on Thursday. The committee said the control on the number of providers had been “unacceptably loose” and there was “no effective price control”, a combination that posed “an unacceptable risk to the commonwealth”. The number of students accessing VET Fee-Help rose from 55,115 in 2012 to 202,776 in 2014, according to government figures, while the total value of loans increased from $325m to $1.76bn in the same period. “The committee has been provided and has heard harrowing and concerning evidence of misconduct by private VET providers,” said the report, published on Thursday. “The private VET sector has been subject to a range of allegations in the public arena not limited to that of exploitative conduct, shoddy training and massive profits at the public expense. “It is an irony that in the name of social justice an exploitative scheme to enrich individuals has been allowed to flourish at the expense of the most vulnerable who end up with a debt, but no qualification, or a worthless qualification.” The committee, chaired by the Labor senator Sue Lines, suggested that there had been “a massive transfer of public wealth from the commonwealth and state government – and taxpayers – to private individuals as a result of rushed rollout of demand-driven entitlement schemes, particularly in Victoria and by the commonwealth through VET Fee-Help”. Labor’s higher education spokesman, Kim Carr, who was also a member of the committee, said the cost of courses had surged and the government had not dealt with “the systemic failures”. Carr said the 151% annual increase in the value of VET Fee-Help loans between 2013 and 2014 was “totally inappropriate”. “This is money that could be spent on real education rather than lining the pockets of rogue operators,” he told Guardian Australia, without naming any particular operators. “They’ve basically built a business model on the plundering of the public purse.” The committee called for a new government review into VET Fee-Help to examine “the evidence of rampant abuse, accelerating costs, and doubling of bad debt”. This review would consider ways to control the costs of courses for students by either instituting a lower and separate loan limit or a cap on student loan amounts. It would also work on ways to ensure that only providers with a reputation for high qualify had unfettered access to VET Fee-Help. Other recommendations included a “concerted and urgent blitz of all providers” by the Department of Education and Training and the Australian Skills Quality Authority. The authority should also be given powers to directly regulate brokers or marketing agents in the VET sector, the report said. The Coalition senators, in a minority report attached to the main findings, said the committee had heard “some very disturbing stories about the unscrupulous behaviour of some training providers, using high pressure sales tactics to prey on the vulnerable in society, leaving students with a lifetime of unwanted debt that may never be repaid and taxpayers with increasing liabilities”. But the minority report argued the government had acted swiftly to address the serious concerns, including banning inducements such as free iPads and laptops earlier this year. The Nationals senator Bridget McKenzie, who was deputy chair of the committee and wrote the minority report, said the main document had failed to explicitly acknowledge Labor’s poor design of the VET Fee-Help program, first introduced in 2008 and then expanded in 2012. “All of the government’s reforms to VET Fee-Help have been necessary because the previous Labor government failed to put in place appropriate compliance arrangements that stopped providers or brokers from using exploitative practices to take advantage of vulnerable students and burden the taxpayer,” she wrote. The Australian Council for Private Education and Training, which represents about 13,000 members, argued the report contained some “emotional language” that did not help the debate. The council’s chief executive, Rod Camm, said: “It’s certainly got a political tinge to it; there’s no question about that, but if you put that aside and just focus on the recommendations I think a lot of the recommendations are in the right direction.” Camm said he supported recommendations including the licensing of brokers and the introduction of an ombudsman. Asked to describe the extent of problems in the private VET sector, Camm said: “I probably would have once said it was 5% of the sector but I think my confidence is dented. I think it might be as high as 10%. I think the majority of providers are genuinely trying to do the right thing but there are some there that are stinging the sector. They’re damaging the reputation of the sector.” The Greens senator Lee Rhiannon called for broader action, including the abolition of public funding of for-profit private providers and the banning of brokers. |