Private colleges rort students as TAFEs gutted

Private vocational training providers are making the news for ripping off students, funded by student debt through government schemes.

The Federal Government gives $1 billion a year to the private sector, with profits in Victoria alone totalling $230 million. Three companies made more than $18 million in profit. The rate of return for Australian Careers Network was 51 per cent in 2014, while other providers recorded over 30 per cent margins.

TAFE, the traditional provider, has been gutted of funds in both NSW and Victoria, where $300 million was ripped out by the state Liberal government. TAFEs in Victoria now have only 27 per cent of enrolments. The state Liberal government “opened up” funding to all training providers, forcing TAFEs to compete with private operators.

Private providers have been caught using ambush marketing, saying the courses are free and luring prospective students in shopping malls with free iPads. The rorts in private “education” are so widespread that the Federal, NSW and Victorian governments are looking for ways to impose new regulations and higher fines. Twenty-three vocational education institutions are under investigation.

Evocca College has only graduated 2058 students between 2011 and October 2014, despite enrolling more than 38,000! It received at least $131 million from the Federal government.

Evocca told ABC Radio that 15,000 students “are currently progressing towards graduation”, leaving 20,000 unaccounted for. Victorian government figures show only four in ten students who started short courses had completed them in 2013.

Fees charged to students in Victoria rose from $2.4 million in 2009 to $79.6 million. The total amount students owe to the VET FEE-HELP scheme has ballooned to more than $1.1 billion in three years. Students pay back the loans to the Federal government when they have reached the same $51,309 income threshold as under HECS loans. Vocational courses can cost between $10,000 and $19,000.

The rorts show everything that is wrong with privatisation and the free market model. But Abbott isn’t about to end this corporate welfare.

By Tom Orsag


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