NEW VET Students Loans a win-win for students and taxpayers
A new Vocational Education and Training (VET) Student Loans program introduces caps from January 2017 with more stringent criteria to be a provider, and bans brokers. It will be very interesting to see how the caps, aligned with actual costs, will be determined and what evidence will underpin decision making.
This one program will not, “… return integrity to the vocational education sector.”
Perhaps 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”, indicates that current standards for Registered Training Organisations are not good enough.
“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.”
If this is the case then a 21st Century VET investment plan is needed that is based upon economic, industry and regional priorities, identifying critical job roles, capabilities and connections to National Training Packages. There should be flexibility to invest in non-accredited training and workforce development activities that improve productivity, performance and global opportunities.
Headlines in the news flipped the message in different ways:
Now to the subprime crisis link,
The United States (U.S.) subprime mortgage crisis was a nationwide banking emergency that contributed to the U.S. recession of December 2007 – June 2009. It was triggered by a large decline in home prices after the collapse of a housing bubble, leading to mortgage delinquencies and foreclosures and the devaluation of housing-related securities.
The housing bubble was caused by many factors including over funding by lenders and an Australian VET funding crisis has been created by over funding and devaluing qualifications exacerbated by poor behaviour by some training providers.
Alongside “hitting the reset button” these announcements will probably lead to:
- A quarter to a third less Registered Training Organisations (RTOs) in the system by December 2017
- A new pricing structure and market value rate for VET qualifications (whether they are included in the new VET Student Loans program or not)
- Reductions in VET spending and a rise in non-accredited training
- RTO collapses and disruption in cash flow
- An urgent need for VET to create a national purposes statement and a 21st Century VET investment plan that goes beyond political cycles
These predictions aren’t new information as have been published in blogs going back to 2013:
We are facing a nationwide VET emergency triggered by a significant but necessary decline in investment in VET FEE-HELP after the collapse of this scheme because too many RTOs are reliant on narrow sources of government funding and aren’t in control of their own future.
Something that might help communication is an Industry/Vocational Education and Training version is the Business/Higher Education Round Table and a more obvious role in the National Innovation Science Agenda.
The key take away here is a big ‘R’, not regulation but relevance and if there is ever a time to strategically review your RTO it is here.