Statement on VET student loans program

The Business Council of Australia welcomes the Turnbull Government’s announcement today of a new VET Student Loans program, and urges the Senate to urgently pass these much needed reforms to ensure new loans are available to students from 2017. 

“The VET FEE-HELP program had good intent, but resulted in a small group of poor-quality providers taking advantage of students and wasting taxpayers’ dollars. Minister Birmingham’s new loans program will remove these providers from the market, and deliver a sustainable system,” Business Council Chief Executive Jennifer Westacott said. 

“The Business Council has strongly advocated for a new loans program that maintains the fundamentally important principle of ensuring all Australians have an opportunity to develop their skills, regardless of their ability to pay fees upfront. This program will do that. 

“At the same time, the cap on the amount of a loan will prevent the egregious increases we have seen in the VET market, where the average cost of loans increased by 60 per cent between 2011 and 2014, and by over 200 per cent in some fields such as information technology. 

“Limiting the loans to courses that are more likely to result in students getting jobs when they finish their studies will help deliver the workforce Australia needs to be competitive in a global economy. 

“This will also ensure students are not loaded down with debts they’ll never be able to repay, and deliver value for money for taxpayers. 

“The government’s commitment to monitor providers and respond in real-time, including cancelling payments and revoking accreditation, will protect students. It will also ensure the reputation of good providers in the sector will no longer be negatively impacted. 

“While these reforms will also begin to improve the market information in the sector, the lack of market information in the VET sector more broadly still needs to be addressed. The Business Council looks forward to working with the government on this agenda. 

“The reputation of Australia’s VET sector has been damaged as a result of the VET FEE-HELP program. The sector is too important to our people, economy and prosperity, to allow this damage to continue. 

“Minister Birmingham’s new loans program will return the sector to a stable footing. It will allow providers to get on with the business of delivering training to students, and creating our future workforce.”