Reset button hit on VET Student Loans
Labor’s failed VET FEE-HELP scheme has incurred considerable cost blow outs - $325 million in 2012, $1.8 billion in 2014 and a whopping $2.9 billion in 2015.
Thankfully that’s all about to end with the Federal Government announcing a new Vocational Education and Training (VET) Student Loan program to begin in 2017, creating a more robust system that will provide value for money to both students and taxpayers.
With tougher barriers for course providers, properly considered loan caps on courses, stronger course eligibility criteria that aligns with industry needs, mandatory student engagement measures, a prohibition on the use of brokers to recruit students and a stronger focus on students successfully completing courses, the new VET program will reduce the likelihood of incurring unnecessary debt.
Featured changes include:
- limiting the courses eligible for VET Student Loans to those that align with industry needs and are selected based on analysis of employer, state and territory and Commonwealth data to provide a high likelihood of leading to good employment opportunities;
- three bands of loan caps at $5,000, $10,000 and $15,000 that will be set for courses depending on their delivery cost;
- requiring students to log in to and engage with the VET Student Loans online portal to ensure they are active and legitimate enrolments;
- a new application process for providers wanting to access VET Student Loans that includes a much higher bar to entry by assessing their relationships with industry, their student completion rates, the employment outcomes of their courses and their track record as education institutions;
- strengthening legislative, compliance and payment conditions, including paying providers in arrears, the ability to cap provider loan amounts and student numbers and to limit course scope, powers to suspend poor performing providers from the scheme, cancel their payments and revoke their approval; and
- prohibiting approved providers from using ‘brokers’ or directly soliciting prospective students (including ‘cold calling’ or so-called ‘lead generation’) and limiting the subcontracting of training.
Further information about the Turnbull Government’s new VET Student Loans scheme can be found at https://www.education.gov.au/vet-student-loans.