VET & TAFE
campusreview.com.au
Finely tuned reform necessary
The changes to VET FEE-HELP
will not prevent a repeat of
history unless they adequately
address some of the systemic
issues of the past and prepare
the sector for the future.
By Jonathan Chew
I
n early 2015, a private-equity firm rang to ask if Nous
Group could be part of due diligence for their acquisition
of a high-growth VET provider. It took only a few minutes
to establish that the provider in question had built a successful
business delivering diploma qualifications to the untapped market
of disadvantaged learners who would otherwise not be engaged in
education or employment. The sole funding vehicle that made this
business possible was VET FEE-HELP.
Suffice to say, it was a brief discussion. I suggested that the
almost complete reliance on one line of funding (already under
scrutiny at the time) from delivering Australian Qualifications
Framework level 5 and 6 courses to ill-prepared candidates did not
appear to be a sustainable business model.
In the coming months, the audit by the Australian National Audit
Office (ANAO) will lay bare the full extent of the abuses of VET
FEE-HELP, and hopefully address the question of how the scheme
was so easily exploited. Even today, despite the widespread media
coverage, the full extent of inappropriate enrolments is unknown.
The Australian Competition and Consumer Commission has been
investigating a number of RTOs, but most of the sector remains
unexamined. The number of enrolments at those providers under
18
public scrutiny accounts for less than 10 per cent of total VET FEEHELP enrolments in 2015.
In the meantime, the government has introduced legislation for
the new scheme – titled VET Student Loans – to replace VET FEEHELP in January 2017.
A number of relevant issues have already received plenty
of attention: the absence of regulated prices; the role of
inducements (such as laptops and iPads); the failure to recognise
and respond earlier to runaway expenditure; and the lack of focus
on demonstrable student outcomes. There are, however, three
questions that need to be considered to ensure that the new
scheme takes VET financing on a sustainable forward trajectory.
• First, in the design of the new VET Student Loans scheme, do
we have enough of an understanding of what has/hasn’t worked
based on recent experience?
• Second, what do we now know about how to differentiate
between the reputable, the risky and the unethical providers?
• Third, do we have the appropriate and future-proof governance
arrangements in place to manage VET Student Loans in the
broader context of tertiary education funding?
WHAT HAVE WE LEARNT FROM RECENT EXPERIENCE
ABOUT WHAT WORKS?
The government’s VET Student Loans is an understandably strong
response to the VET FEE-HELP issues that have seriously damaged
the reputation of the sector. While no individual element of VET
Student Loans would appear inappropriate, it is not clear whether
the sum total of the package of changes is necessary or sufficient
to address key underlying issues.
Reputable providers in both the public and private sectors with