We listen with horror to the stories unfolding in the current Royal Commission into the financial services sector, to those driven by greed and self-interest, deceiving vulnerable customers through dishonest practices. And we all gasp! And wonder how this sort of situation could have arisen under the watchful eye of governments, customers and regulators. The same is true of the vocational education and training story of the last few years, yet rather the government response has been to add a few more regulations and to bury their heads in the sand. Students have high debts they are expected to repay for training they did not receive, yet governments continue to ‘pass the buck’ to tuition assurance schemes or pretend that the problem has been solved. Two articles in the Canberra Times and the Sydney Morning Herald over the last week have shown that this is not the case.
Farrah Tomazin in the Canberra Times makes the point that: “Under the federal VET FEE-HELP scheme, private vocational colleges gained virtually unregulated access to government subsidies for every student enrolled.” Potential students, often from the most vulnerable areas, were lured with stories of free-courses and a laptop thrown in by recruiters door-knocking or standing outside Centrelink offices. Little did most of them know that the free-courses came with a ‘pay later’ requirement. Or that their training college might become insolvent before they completed their qualification.
This is a story that is not yet over, Tomazin points out, with the example of 20 year old student Rachel Murphy who enrolled in Sage Institute in 2016. When the training college closed five months later, she was left with a $7500 debt and no qualification. The debt in this case is to the Commonwealth Government and therefore the Government does have the responsibility to do something to support such students. Tomazin calls this: “arguably the biggest policy scandal in Australian history: the systematic rorting of the vocational education and training system.” Surely such public policy failure deserves a Royal Commission. Is it because those responsible for allowing it to happen on their watch are not CEOs of large banks but rather Government Ministers? Or is it because it is only vocational education after all? Or is it because it is only students from communities that do not possess the same sort of power as those that forced a Royal Commission on a reluctant government?
According to the National Centre for Vocational Education Research (NCVER), VET FEE-HELP cost tax-payers $7.5 billion government funds between 2009 and 2016. Most of this funding went to private colleges. Out of the financial services Royal Commission we have seen heads fall as blame is allocated, yet in the VET sector nobody has been charged with a criminal offence, although the government is aware of CEOs and Directors who siphoned off funds prior to their training colleges collapsing leaving students and staff stranded. About $1.2 billion of loans were “inappropriately issued by shonky providers between 2014-2015 alone, and won’t ever be recovered.”
The Tomazin article goes on to point out that many students may not even know they have debts or the size of them. Last year there were 566 complaints from people only discovering they had a debt after they had earned over the $55, 874 threshold.
What has also come to light is how the Australian Tax Office contributed to the problem by supplying tax file numbers to many private training colleges without any paperwork showing that the students had agreed to this provision.
With these continuing stories and a VET sector still in disarray, we would expect to see the Federal Government putting in place measures to deal with the problems they created. First they need to get to the bottom of the problem, and make sure it can’t happen again, and that those who were involved in corrupt practices are charged under the law as is right. If a Royal Commission can help to do that in the finance sector, then surely it can also do that in vocational education and training. Secondly those students who are in debt due to no fault of their own should have that debt forgiven. The Federal Government has the ability to do that. Third the Federal Government needs to start to reinvest in the public TAFE system which has also been pulled down in this scandal, and to ensure that government funds are not made available for training companies that are established with the primary requirement of making money for their CEOs and owners. It is only when all governments in Australia start to work together to rebuild a strong TAFE system as the mainstay of our VET system that students and the rest of the community will have their faith restored. But first we all need to know how and why it happened. Roll on the VET Royal Commission!