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Issue #1714      December 9, 2015

Sharks feeding on VET funds

The federal and state governments ignored warnings about their privatising “reform” of vocational training and now the results are in. The nobbling of TAFE and the encouragement of private operators in the vocational education and training “market” has led to a blow-out of the VET FEE HELP scheme and a long string of stories in the press about shonky colleges and their methods for enrolling students who, quite often, never attend classes or obtain qualifications.

The Australian Skills Quality Authority has revealed that 15 private colleges in breach of government regulations have syphoned more than $1 billion in taxpayer funds.

The introduction of the VET FEE HELP scheme, which runs along the same lines as the scheme for university students, has opened the floodgates for dubious operators. Students are required to start repayments for expensive courses only when their income exceeds $54,000 per annum. Students can access up to $100,000 in loans for courses. For people trapped in low-paid jobs or long-term unemployment, that commencement date for repayments might seem a long way off, allowing high pressure, third party sales persons to promote the courses as “free”.

Non-completion and non-attendance rates are high. One college, the Empower Institute, has received $40 million under the VET FEE HELP scheme this year and $46 million last year, during which period it graduated a grand total of five students out of 4,000 enrolments.

Melbourne’s Phoenix Institute allegedly paid an unemployed Indigenous man $100 for help in enrolling other tenants living on a public housing estate. It has also enrolled people for expensive courses with the incentive of a laptop computer, delivered on-the-spot to people signing up for tuition. Fairfax media investigated the case of the Lutanichi family, one of the many drawn in by the VET sales frenzy.

“For 10 people in my family there is something like $400,000 of debt that I feel responsible for, because I got them to sign up,” she told The Sydney Morning Herald. “Now, that’s not fair on my children or me. I feel terrible about that.”

Sales people going after their chop out of the $4 billion of taxpayer VET funds are coaching applicants through the enrolment process. Nevertheless, of the 55,000 applications for enrolment received from sales agents for Phoenix, only 23,000 survived confirmation checks.

The Australian Competition and Consumer Commission (ACCC) has launched action in the Federal Court against Phoenix. The Commission recommends the College repay the $106 million in Commonwealth funding this year. The College is owned by the Australian Careers Network, whose chairman is Steve Williams – retired lawyer and chair of the Sydney Church of England Grammar School. Former education minister in the Napthine government, Peter Hall, is on its quality oversight committee.

“Phoenix enrolled students in courses for its own financial gain, knowing that few if any of them would actually commence the course, or take steps to withdraw from the course before incurring the debt,” the ACCC’s claim said. “Phoenix would therefore receive VET FEE HELP payments for each student without, in most cases, having to provide any teaching services.”

The Coalition and Labor are trying to hang the blame for the shemozzle on each other. But they’re both to blame. Labor is calling for the establishment of an ombudsman to oversee the sector. This may help to process the mountain of legal work generated by profiteers moving in on education funding but the problem at the core is left untouched.

The real issue is the provision of education for private profit. No amount of regulation (and remember we’re in the era of removing “red tape”), oversight or reviewing will fix this flaw. Free, universally accessible, secular education at all levels of study is what is required. The market-obsessed arguments about savings, excellence and competition flowing from private provision have collapsed. Their proponents should never have been let near education policy or the education system.

Next article – Bigger classes, longer hours

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