Tonight we are considering a package of three bills to replace the VET FEE-HELP loan scheme with the student loans program. The bills also: provide that student loans are approved only for eligible students for approved courses; limit course eligibility for loans through a courses and loan caps determination; impose stronger eligibility requirements for qualification as an approved course provider; ban providers from using brokers or agents to interact or engage with students in relation to the loans; and provide for monitoring and investigation powers and enforcement powers, such as civil penalties, infringement notices, enforceable undertakings and injunctions.
We all know that there are unscrupulous and dodgy providers operating in the vocational education and training sector who have been ripping off students. Private vocational education providers have been using aggressive recruiting tactics to get students into courses with highly inflated fees. Often when students enter these courses they are not properly supported to graduate.
To illustrate the problem I will tell the chamber about a couple of stories of constituents who have spoken with my office about their experience. One constituent came to my office to report that recruitment agents for a vocational college approached a local men’s shed to sign up potential students. The recruiters encouraged him to sign up on the spot and said he would receive an increase in his government payments and, to top it off, threw in a free iPad to sweeten the deal. Thinking that the offer was too good to be true, my constituent told the recruiters he would take some time to consider it. And wasn’t it a good thing that he did? The recruiters had emphasised that he would not pay any money up-front and focused on the up-front benefits and glossed over the debt that he would incur.
I have heard similar stories from other VET students who have accepted the recruiters’ advice and signed up to private colleges with VET FEE-HELP loans for tens of thousands of dollars. Some students signed up to courses where they were given little administrative support and absolutely terrible customer service. One constituent told me the paperwork she sent to a provider frequently went missing, as did documents the provider posted to her, because they had recorded her address details incorrectly. When they told her how much the fees would be for the course, they failed to mention the 20 per cent loan fee that would be applied on top. Like the other constituent I mentioned, she was offered a free iPad. Unfortunately, her iPad died after two months and the provider would not give her any advice about where she could go to get it repaired or replaced. Added to all these problems was a general lack of communication from the provider, even when the provider changed their name. They simply started sending out correspondence under the new name rather than formally notifying any students of the change.
While the experiences that have been reported to my office have been pretty bad, there have been much worse stories around the sector, such as the 10,000 qualifications in Victoria that were cancelled because they were not worth the paper they were written on. Also, there were the students who were offered online training as jockeys without even having to ride a horse! There were even students who had been signed up to loans without their knowledge. Throughout the sector there has been an explosion in online and short courses and a decline in quality, and students have racked up massive debts without any hope of getting a job or paying them back. It is estimated that up to 40 per cent of VET FEE-HELP loans will never be repaid. For those students who have failed to graduate or whose qualification is of little or no value, this money has just been flushed down the toilet. So much for a government that promised to end of the waste!
In 2014 the 10 largest private training providers received $900 million in government subsidies, yet only five per cent of their students graduated. VET FEE-HELP loans have blown out from $700 million in 2013 to $2.9 billion in 2015. Some colleges have cost taxpayers $1 million to produce a single graduate. This is clearly unacceptable.
Labor made a commitment before the election to introduce reforms which would crack down on these dodgy providers and restore integrity to Australia’s VET sector. To give you an idea of how much these loans have blown out over time, it is estimated that these bills will reduce outstanding loans by $7 billion over the forward estimates and $25 billion over the next 10 years. We support these bills the government have introduced today as we want to see effective measures to address the crisis in the VET sector.
Anyway, how could we possibly oppose them when the government have copied our policies? The provisions contained in these bills are almost a carbon copy of what Labor were proposing prior to the last election. Just look at what the government have included in their VET reforms—capping of student loans, cracking down on brokers, linking publicly funded courses to industry need and skill shortages, requiring providers to reapply under new standards so only high-quality providers can access the loan system, linking funding to student progress and completion, and a VET loans ombudsman. And what do all these measures have in common? Every single one of them was copied from Labor’s policies. They say that imitation is the sincerest form of flattery, and these bills are very flattering indeed.
The PRESIDENT: It now being 6 pm, the debate is interrupted.