You are using an older browser version. Please use a supported version for the best MSN experience.

Parliament considers VET loans crackdown

AAP logoAAP 12/10/2016 Katina Curtis

The waste, rorting and reputational damage in vocational education cannot continue, the federal government has declared.

It has put its overhaul of vocational student fee loans to parliament, with a plan to scrap the existing system and start again.

"Students were signed up for thousands of dollars in loans for courses they didn't need or could never complete or which had no link to employer or skills needs in the economy," Assistant Vocational Education Minister Karen Andrews told parliament on Thursday.

"The waste, rorting and damage to vocational education simply cannot continue."

Under the government's plan, starting from January 2017, students will only be able to get loans for $5000, $10,000 or $15,000 depending on the cost of delivering their course.

Providers will be allowed to set fees higher than the loan amount, with students having to find the cash to cover the gap.

It's expected 90 per cent of loans will fall into the $10,000 band.

The list of courses eligible for taxpayer-funded loans will be cut from 825 to about 350, with a focus on those which equip students to fill skills shortages around the country.

It means students wanting to study things like life coaching, circus arts, jewellery design or the art of being a butler - all courses that currently attract taxpayer-funded loans - will have to pay their own way.

While public training organisations, including TAFEs, will automatically be eligible to offer the loans on those courses, all private providers will have to re-apply - though some high quality organisations will be deemed approved for six months during the transition process.

The government will get new powers to suspend providers from offering loans.

Rapid student growth, particularly of a particular type, an unusual expansion in course offerings, a high number complaints or media stories exposing rorting could trigger a government investigation and possible suspension.

The peak body for private trainers has criticised the "brief window for consultation" on the changes, which it believes will lead to another poorly designed loans program.

"The future of Australia's vocational education training sector deserves far more than a cursory consultation restricted to eligible courses and caps," Australian Council for Private Education and Training head Rod Camm said.

But the government document accompanying the legislation says there were extensive consultations involving nearly two-thirds of the organisations registered to offer loans under the old scheme.

image beaconimage beaconimage beacon