Imagine someone came around to your house one day and offered you a free iPad. It’s like one of those dodgy internet ads come to life! Except this seems legit; all you have to do is sign up to one of their tertiary courses. You can even complete the course online (on your new iPad!) Sounds great, right? Especially if you’ve been unemployed for a while, or haven’t been able to find the right uni course for you. Now, an opportunity has come knocking… so what’s the catch? Well, if you’ve been watching the news recently, you might have heard a bit about the VET FEE-HELP system, and how certain unis and colleges have been gaming the system to exploit students. So what does this mean for future applicants, and what kind of things do you need to look out for?
What is VET FEE-HELP?
VET FEE-HELP is a government initiative to help people complete Vocational Education Training without having to burden themselves with serious financial costs. It is similar to the HECS-HELP (see: explanation here) system designed to help students attend university, though VET FEE HELP applies more so to certificate qualifications and short-term degrees. Basically, if you’re completing a Bachelor or Masters of Commerce, then you’d probably be eligible for HECS-HELP, whereas if your job required Certificate IV in Small Business Management, then you’d apply for VET Fee Help. As such, VET FEE-HELP mostly applies to those seeking Graduate Diplomas or Associate Degrees, and whilst you may not be considering these options now, you may find yourself contemplating additional qualifications at some point.
Both the HECS-HELP and VET FEE-HELP systems are necessary cornerstones of tertiary education. Ultimately, it’s an investment in the future: current students have their fees subsidised so they’re not having to pay hundreds of thousands of dollars before they’ve even gotten their first job. Then, once they graduate, get into the workforce, and start earning a decent salary, they pay back their loans, and part of their tax dollars goes to subsidising the next generation’s fees. It’s a wonderful cycle that’s deliberately designed to help those who need university degrees to make themselves employable. The vast majority of careers in fields like Science, Commerce, Law, Health, Engineering, Education, and Social Work require you to at least have some kind of undergraduate degree or basic qualification.
Without a HECS or FEE-HELP system in place, students who aren’t able to pay thousands of dollars upfront would struggle to ever break into those professions, which is awful for individuals (especially those from low-income families who wouldn’t otherwise be able to attend higher education courses), but also detrimental to the country. We need qualified and enthusiastic students to be able to pursue their careers, and there’s a substantial amount of proof that tertiary education is one of the best ways to break the poverty cycle for students in low socioeconomic areas.
Unfortunately, some institutions have been exploiting this system.
The problem for students
Generally, you are required to begin paying back your HECS-HELP or VET FEE-HELP loan once you are earning more than around $53,000 a year. However, many students graduating from these Registered Training Organisations (RTOs) were not able to find full-time employment because their degrees were not looked upon favourably by employers, or worse, because their college course hadn’t actually properly prepared them for working in that industry. So these graduates were unlikely to meet that minimum repayment threshold, which would mean that the government (and by extension, taxpayers) would have to pay for something useless. That’s a huge issue, because it means that money being ‘invested in the future’ isn’t actually helping a generation of students – it’s just going directly to these RTOs, and students don’t have anything to show for it. And if we ruin that wonderful system of one generation helping the next, it could have extremely negative consequences later down the road.
Simply put: certain RTOs were offering degrees that weren’t worthwhile. And the institutions were deceiving students (or luring them in with free iPads and laptops) for their own gain.
It’s terribly exploitative, and no one benefitted from this except these predatory RTOs. Whilst things aren’t as bad in Australia as they are in America (where student loan debts now total more than a trillion dollars!) it’d be dangerous to allow things to continue down this path because the problem would only become harder to fix as costs rose. Thankfully, the government have stepped in to put a stop to things, which has led to a nationwide effort to ban dodgy degrees and the institutions providing them.
Crackdown on RTOs
So far, the crackdown has led to a couple of institutions being heavily fined for their dodgy practices, like ‘Careers Australia,’ who are having to pay $50 million after they were found to be targeting “vulnerable and disadvantaged students.” For too long, these RTOs had gotten away with false advertising and deceptive incentives. But now, places like Sydney’s Unique College who were allegedly offering cash incentives to students, and Melbourne’s Phoenix Institute who were also apparently going after low SES people and making misleading promises to them are copping a lot of criticism. A couple of other institutions like the Australian Institute of Professional Education and Empower Institute are also set to be investigated, and hopefully the stricter regulations that are now in place will deter RTOs from preying on and deceiving other potential students.
From now on, institutions are not allowed to offer monetary or material incentives to encourage enrolment, and because this is an election year, both major parties look set to support further regulations. With Higher Education reforms being a key talking political talking point at the moment, it’s likely that there’ll be more changes still to come, so we’ll keep you updated on any new developments.