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6PR Mornings with Gary Adshead

E&OE…

GARY ADSHEAD: You may have been following some of the issues around vocational training providers, places where you pay a fee to get a vocational training certificate in some area.

There’s been some scandal around some of them that they’ve basically been signing up people, students, on the basis that they can also get subsidised lessons, instruction through government policy that’s out there under the VET FEE-HELP Loan Scheme but there’s concerns around some of those agencies being unscrupulous and signing up people regardless of their chances of actually getting a job at the end of it and being able to use the diploma or graduate certificate to any good whatsoever, but in the meantime, of course, taxpayer’s money has been caught up in that.

Now, the Coalition Government, they have a view that Labor stuffed this up because they made it too broad. There weren’t enough restrictions around it and there wasn’t enough scrutiny around the program as well. But it is a vital program because, as we know here in Western Australia, TAFE fees have been getting more and more expensive.

So, if you can get some help in how you fund the course through the Government loan scheme than all the better. Now, to talk about this and what is being planned to be done about it, try and get it back on track, is Senator Scott Ryan. He’s the Minister for Vocational Education Skills federally and he joins us on the lone. Thanks for your time Senator.

SCOTT RYAN: G’day Gary, thanks for having me.

GARY ADSHEAD: Yeah so where did this start to go wrong?

SCOTT RYAN: Well, back in 2012, the previous government introduced a loan scheme for diplomas and above that were delivered outside universities, so TAFEs and private colleges and it was aimed at addressing the problem where we’ve long had a HECS scheme for university where you don’t have to pay up front, you pay when you earn your money back and you mentioned in your introduction there that those fees at TAFE can actually be disconcerting to some parents and make it harder to participate.

So, the aim was to have a loan scheme like HECS at universities for diplomas and the higher qualifications that TAFEs and private colleges do to give students better choice. That was a good objective. I don’t think we want people deciding to go to a university rather than a college or a TAFE purely because of the costs when the vocational course could be better for them. We want them to make the choice that’s best for them.

The problem was the HECS scheme for universities put into this sector, didn’t have sufficient protections for students and taxpayers and that’s why we’ve seen some of the stories of shonky behaviour, of very low completion rates, in one instance it was three or four per cent and students being left with very big debts that they’re not going to have a chance to pay back.

Now, my predecessors - I’ve been in the job 6.5 weeks, my predecessors over the last couple of years have brought in place measures to clean it up, you know, no free iPads, you can’t be signed up and cold called like you did with the vacuum cleaner at the front door or in a shopping centre in the same way. There was a cooling off period but we’ve got a lot more work to do and my job is to redesign the scheme for 2017 to stop the shonky practices, to make it more affordable and to get back to the objective of let students make the best choice for them but one that’s affordable.

GARY ADSHEAD: So, essentially, do you know how many students that have gone through this and received their loan that won’t be able to pay it back? I mean, have you worked out how much you’ve had to write off?

SCOTT RYAN: Look, that’s done by an actuary at the Commonwealth level who does the same for universities and there’s a very technical analysis for that. There are about $300,000 students in the VET FEE-HELP Scheme that you mentioned, this loan scheme. Now, that’s out of about 2.5 million publicly funded vocational students across Australia so it’s not the biggest part of it but it’s been such a problem in terms of reputational damage and bad media that it is impacting what is a very successful sector. So, it’s about cleaning it up for the reputation of the sector as much as it is to protect the students and taxpayers. We have got quite a few thousand students in providers who have fallen over, gone into administration and we’re spending a lot of time making sure that they’re taken care of.

GARY ADSHEAD: Yeah, so essentially, they’ve gone into administration because they’ve been exposed.

SCOTT RYAN: Well, I’ve got to be very careful because there’s some legal action on the way. Some of them we slowed down our payments to them under some changes brought in late last year and some of them said that put them under financial pressure but for others it’s really a matter for the courts and the administrators. I’ve got to be very careful in what I say but we don’t shy away from slowing down payments where we’re legally able to to some providers who have a - shall we say been less than ethical in my view in their practice.

GARY ADSHEAD: So your plan is to talk around the country about this, what are you doing and why is it necessary? If you know what the problems are, why do you need to travel the country getting an idea from various agencies what to do about it?

SCOTT RYAN:  Yeah, well that’s an important point. I know what the problems are; I also need an understanding of what’s the best way to address them. I’ve got my own ideas, but I’m conscious that I’m not an expert in the sector. Politicians in the modern world I think sometimes can act too quickly rather than listening and taking an extra month to act on this. As I said, I’ve been in the position six weeks, that’s the position I’ve come to.

And I’m undertaking a series of roundtables over the next two weeks right around the country and inviting people that have written to my office, providers, sometimes students, community organisations, TAFEs, to say how can we make this system work better, and then I’ll have something to say prior to the election. But I do want to have this chance to hear from people face to face, not just those in Canberra.

GARY ADSHEAD: And there might be people that want to talk to you about TAFE fees here in WA, because the State Government has been ramping a lot of them up. And when we talk about it on this program we do get calls from people saying well how is my son supposed to be able to afford $10-12,000 to put himself through a vocational training course? Have you got any views on that? Has our State Government gone too far with fees?

SCOTT RYAN: Look, I’m not aware. I’m aware of the fact there’s been the occasional discussion around them. And I don’t necessarily want to tell state governments how to do their job, but one of the reasons the VET FEE-HELP scheme was introduced was to address some of those costs when students are doing diplomas at TAFEs, and that’s why it needs to be made to work. We need to fix it because it’s not financially sustainable for the Government at the moment, it’s not working for students the way it should, and it’s causing reputational damage to the whole vocational sector, and that’s why we’ve said we’re going to fix it and have a new scheme in place for 2017.

GARY ADSHEAD: All right. Why is it that the states get to nominate the fees for various courses? Is it because the money that you send them is all controlled here?

SCOTT RYAN: No, we - so we’re responsible for universities and we fund the VET FEE-HELP scheme, but the states own the TAFEs, the states set the TAFE fees. We give the states money to use for vocational training; they effectively get to use it within very broad parameters, it’s up to them, different states fund their TAFEs to different levels and in different ways. So in essence it’s a decision for the WA Government.

GARY ADSHEAD: Yeah, well with that though brings the question of how many people are actually going into TAFE. They say there’s been a fall-off in numbers in the last 18 months or so. Do you have any issues there? Will you be talking about that in relation to these …

SCOTT RYAN: [Interrupts] Look, one of the things in the education sector is, I think, there have got to be clear lines of responsibility. People can quite rightly hold me to account for what we do with the VET FEE-HELP scheme, but I’m not going to try and boss around the states who know their TAFEs better. I’m travelling from one high school today to another in Perth at the moment, and I learn things when I go to schools, but I tell you the schools and TAFEs aren’t going to be made better by having them run by Canberra. So there’s both accountability and responsibility there, but at the same time we supply the states with a lot of funds to do that, and I think, off the top of my head over the last four or five years, funding to the WA State Government for vocational training, which includes some TAFEs, has gone up by about $30 million.

GARY ADSHEAD: Okay, appreciate your time today Senator, thanks very much for that.

SCOTT RYAN: Thanks for having me, Gary.

GARY ADSHEAD: That’s Senator Scott Ryan, who is also Minister for Vocational Education and Skills. He’s here and he’s talking about the issues around the VET FEE-HELP loan system that’s been in place for a number of years, but in the last couple of years there’s been some pretty big exposés around how those students are exploited – signing them up and then they’re exploited essentially. They are there for - the institutes then able to get money from the Federal Government, but there’s real concerns about the - what they’re actually getting out of it, these students, and how serious these organisations are to provide vocational training certificates and diplomas, et cetera, or whether it’s just a grab for money from the Feds. But in the meantime, of course, the VET FEE-HELP system that’s there has been put in jeopardy as well, and they say that it needs to be re-built in some way so that people can afford, through a loan system, to go to TAFE.

We do hear from people from time to time that say that the fees are just out of their reach. Has it got any better? I mean, if you are someone that has used the VET FEE-HELP system, the loan system, is that what’s got you through TAFE perhaps, is that what’s made it possible for you, and how do you go paying it back given the fee increases that we have seen?

ENDS