Release type: Media Release


New VET Student Loans a win-win for students and taxpayers


Senator the Hon Simon Birmingham
Minister for Education and Training

The Turnbull Government will introduce a new affordable, sustainable and student-focussed vocational education and training student loans program for 2017 in a win-win for students and taxpayers.

Minister for Education and Training Simon Birmingham said the new Vocational Education and Training (VET) Student Loans program, which replaces Labor’s failed VET FEE-HELP scheme, will provide value for money to both students and taxpayers via tougher barriers to entry for 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.

Minister Birmingham said the new VET Student Loans program was a big win for taxpayers as it will deliver an estimated reduction in total outstanding HELP debt of more than $7 billion across the forward estimates and $25 billion over the next 10 years.

“The Turnbull Government’s new VET Student Loans program will return integrity to the vocational education sector and deliver a win-win for students and taxpayers through a range of protections,” Minister Birmingham said.

"We will close off new loans under VET FEE-HELP at the end of 2016, with the new program including course restrictions for providers, loan caps to begin from January 2017 and student engagement requirements commencing from mid-2017.

“Central amongst our new program is the need for providers to go through a rigorous application process and extensive monitoring and evaluation to ensure they are delivering education that students and employers value and that taxpayers are willing to continue supporting.

“The belt and braces approach to safeguards the Turnbull Government is undertaking should ensure there is no repeat of the mess and mistakes Labor made with their poorly thought-through and ill-considered policies for VET FEE-HELP.”

Minister Birmingham said the new scheme represented a targeted approach to further education and training which will be student-centred and focussed on employment outcomes.

“From the high chair to higher education, the Turnbull Government is committed to ensuring Australians have access to the opportunities and skills they need for life and are encouraged into learning that will ensure they are job-ready and can contribute to the economy,” Minister Birmingham said.

“Vocational education and training is fundamental to Australia’s future success as we transition to a 21st century economy by offering skills that are in high demand and providing broad post-school study options for students.”

“VET Student Loans will only support legitimate students to undertake worthwhile and value-for-money courses at quality training providers.”

Minister Birmingham said the new VET Student Loans program would:

  • Limit 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
  • Include three bands of loan caps at $5,000, $10,000 and $15,000 that will be set for courses depending on their delivery cost. The Minister can review the cap rates at any time in the first 12 months of the scheme and there will be a compulsory review after the first 12 months of VET Student Loans to ensure it is working as intended
  • Require students to log in to and engage with the VET Student Loans online portal to ensure they are active and legitimate enrolments
  • Feature 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
  • Introduce strengthened 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
  • Prohibit approved providers from using ‘brokers’ or directly soliciting prospective students (including ‘cold calling’ or so-called ‘lead generation’) and limiting the subcontracting of training

The VET Student Loans program will commence from 1 January 2017 but will include arrangements for the 144,000 current VET FEE-HELP students to opt to be to ‘grandfathered’ through to the end of 2017.

All private education institutions will be required to apply to be eligible for VET Student Loans to weed out unscrupulous providers who have plagued the VET FEE-HELP scheme. Public providers and TAFEs will be granted automatic eligibility to offer VET Student Loans but will still face identical new conditions on scope of enrolment, enrolment numbers, loan caps and student participation.

Minister Birmingham said VET Student Loans would “hit the reset button” on Labor’s flawed VET FEE-HELP scheme so that Australians can start to rebuild their trust in vocational education and so that taxpayers can ensure their money isn’t rorted.

“Only now with historical data can we see the true damage Labor’s changes to VET FEE-HELP did whereby the scheme blew out from costing $325 million in 2012 to $1.8 billion in 2014 and $2.9 billion in 2015, student numbers jumped by almost 400 per cent, fees more than doubled and loans increased by 792 per cent,” Minister Birmingham said.

"While the 20 measures our government put in place over 2015 and 2016 have stemmed some of the losses in VET FEE-HELP, with total 2016 loans projected to be around 45 per cent lower than in 2015, it is clear that a completely new program is essential to weed out the rorters and restore credibility to VET.

“The waste and rorting and damage to vocational education simply cannot continue and I call on my Parliamentary colleagues to work with the Turnbull Government to help us ensure the new VET Student Loans program is legislated as quickly as possible to facilitate its commencement on 1 January 2017.”

Further information about the Turnbull Government’s new VET Student Loans scheme can be found at