Reforms to protect VET students pass the Parliament

New rules to better protect students in the vocational education and training sector will come into effect from 1 January 2016 with the passage of the Higher Education Amendment (VET FEE-HELP Reform) Bill 2015.

The legislation builds on the Government’s work to fix the mess inherited from Labor and to move the VET FEE-HELP scheme onto a more sustainable footing for the future.

The legislation gives effect to the Government’s reforms to stamp out unscrupulous marketing and enrolment practices by some training providers and restore the integrity of the VET FEE-HELP scheme.

From 1 January 2016, tougher new standards will come into place to better protect students at the point of enrolment from being pressured into a course and student loan.  These changes include:

·         that training providers must ensure they are not signing up students for a VET FEE-HELP at the same time as they are being enrolled in a course

·         providers must assess the student’s capacity to undertake the course for which they are enrolling

·         stronger safeguards for under 18 year old students so that they cannot be signed up for a VET FEE-HELP loan without parental consent, and

·         it will be easier for a student to have their debt cancelled where they have been signed up for a loan inappropriately and for the Government to recoup the cost from training providers.

The legislation also includes further measures to tighten the VET FEE-HELP scheme ahead of the introduction of a new model in 2017 including:

·         freezing the total loan limit for existing  VET FEE-HELP providers to 2015 levels

·         introducing new entry requirements for registered training organisations seeking to become a VET FEE-HELP provider

·         moving from payment in advance to payment in arrears for certain training providers, and

·         pausing payments to training providers for new enrolments until concerns about poor performance are addressed.

The amendments are designed to control growth and lift the performance of training providers ahead of a more fundamental re-design of the scheme. 

The Government amendments were passed with the support of Labor, the Greens and the cross-bench.