This week the Federal Minister for Education and Training announced a new VET loan system to replace the flawed VET FEE-HELP scheme. The VET Student Loans scheme includes:
- Limiting 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.
- Three bands of loan caps ($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.
- A requirement of students to log in to the VET Student Loans online portal and demonstrate engagement with the portal to ensure they are an active and legitimate enrolment.
- A new application process for providers wanting to access VET Student Loans. This process will include a higher bar to entry by assessing the provider’s relationship with industry, their student completion rates, the employment outcomes of their courses and their track record as education institutions.
- The introduction of 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
- Prohibiting approved providers from using ‘brokers’ or directly soliciting prospective students (including ‘cold calling’) and limiting the subcontracting of training.
There will also be a compulsory review after the first 12 months of VET Student Loans to ensure it is working as intended, and TAFEs and other public institutions will automatically be allowed access to the scheme.