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Speech: Higher Education Support Amendment (VET FEE-HELP Student Protection) Bill 2018

Speeches in Parliament
Mehreen Faruqi 29 Nov 2018

I rise on behalf of the Greens to speak to the Higher Education Support Amendment (VET FEE-HELP Student Protection) Bill 2018. This bill provides a long-awaited remedy for students who have incurred debts due to the inappropriate conduct of their VET providers. For that reason, the Greens support the bill.

The Greens oppose public money going to private colleges. Government funding should not go to VET or tertiary education providers that operate for profit. We need to end public funding for privately-provided, corporatised models of VET and support public TAFE to provide the same educational and training outcomes as public education. The Greens are proudly the party of public education. We know that, for years, the privatised TAFE sector has been plagued by complaints of wrongdoing by victims of dodgy service providers. Both Labor and the Liberal Party must accept the blame for this. Public money should never have been handed over to for-profit VET providers. Public TAFE is where public money should be going. The Greens have fought hard to keep public funding for TAFE at both state and federal levels. TAFE is the cornerstone of the vocational and education training sector.

The bill in front of us amends the Higher Education Support Act 2003 to provide for a student's FEE-HELP balance to be re-credited where the student incurred the VET FEE-HELP debt as a result of inappropriate conduct by VET providers or their agents, including where that conduct occurred prior to 1 January 2016. In certain circumstances, the bill also enables the Commonwealth to recover from the VET provider an amount that is equivalent to the amount remitted. These include circumstances where a dodgy VET provider misled students and treated them as entitled to VET FEE-HELP assistance when they were not entitled to it. The bill also amends the Ombudsman Act 1976 to provide for the VET student loans ombudsman to make recommendations in relation to the re-crediting of FEE-HELP balances.

In short, the bill allows the federal government to waive up to $1 billion of debt owed to students ripped off by dodgy colleges in the VET FEE-HELP loan scheme. It also gives a new discretionary power to the secretary of the Department of Education and Training to waive student debts incurred as a result of the inappropriate conduct of a VET provider or its agents. The changes in this bill build on earlier legislation, which the Greens also supported. These bills included the Higher Education Support Amendment (VET FEE-HELP Reform) Act 2015 and the Higher Education Support (VET) Guideline 2015. These reforms included the introduction of the concept that the exploitative practices of providers amounted to unacceptable conduct, which it absolutely was. Where a student successfully claimed unacceptable conduct occurred on or after 1 January 2016, the student's VET FEE-HELP debt was remitted. This went some way to limiting the most exploitative practices of VET FEE-HELP through 2016 but only applied to the unacceptable conduct of providers post 1 January 2016. The VET FEE-HELP scheme was shut down to new applicants at the end of 2016 after being misused by colleges that enrolled tens of thousands of students in courses they were unlikely to complete and, even if they were completed, were unlikely to help them find jobs. But while the colleges kept the fees for the course paid through the government's VET FEE-HELP scheme, the students were obliged to repay the fee through the tax system. In effect, students are still carrying debts that were incurred as a result of this dishonest conduct by some VET providers. From 2009 to 2016, both Labor and Liberal governments paid private colleges $7.5 billion through the loan scheme, and payments peaked at $2.9 billion in 2015. However, as it stands we do not know what proportion of the payments went to dodgy colleges. We know that students at a number of unscrupulous providers incurred debts as a result of being signed up to courses they would never complete.

On 13 October 2016, the Senate referred an inquiry into a different set of bills that reflected on this and other issues in the VET sector. The VET Student Loans Bill 2016, the VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016 and the VET Student Loans (Charges) Bill 2016 were referred to the Education and Employment Legislation Committee for inquiry. The submissions to this inquiry really do provide some very interesting and very disturbing case studies to understand how we got to this point. The National Tertiary Education Union represents the industrial and professional interests of some 28,000 staff working in tertiary education. In their submission, they state:

There is no question that the existing market based arrangements for the regulation and funding of VET in Australia have been a complete failure. The NTEU welcomes the significantly enhanced funding and regulatory arrangements included in the proposed legislation and, as outlined above, if appropriately monitored and enforced, the new registration and compliance arrangements should minimise the capacity of dishonest providers to exploit students and/or rort public funding.

Education is not a commodity. It should never be treated as a profit-making exercise. Students are not clients, and education institutions should not be businesses.

Another interesting perspective is that of the Consumer Action Law Centre, an independent not-for-profit consumer organisation based in Melbourne. They work to advance fairness in consumer markets, particularly for disadvantaged and vulnerable consumers, through financial counselling, legal advice and representation, policy work, and campaigns. In their submissions, they state:

It is well documented and generally accepted that vulnerable and low-income consumers and job seekers were specifically targeted by VET providers and third-party sales agents. Unsolicited sales were common, either through door-to-door sales in lower socio-economic areas, or cold calling "leads" generated through job search or competition websites. Much of this activity was unlawful under the Australian Consumer Law (ACL) due to practices involving misleading or unconscionable conduct. In response, the Australian Competition and Consumer Commission (ACCC) has taken enforcement action against individual providers or brokers.

These so-called education "brokers" and third-party sales agents wreaked havoc between 2012 and 2015 with enrolments surging from 55,000 to 272,000 during this time. Consumer Action's legal practice saw a similar spike in complaints about the enrolment practices of VET FEE-HELP providers and brokers over the same period.

A few years ago, triple j's Hack did an excellent expose of what was happening. It was called An insider's account of adodgy private college rorting student loans. I want to read some of the article onto the record. It is important that we don't forget the real impacts that these terrible changes that were brought on have had on people. The article reads:

For one year it was Megan's job to advise students enrolled at one of the many Australian private training colleges rorting the government and plunging thousands into severe debt. She was at the centre of one of the biggest blunders in government in recent years—the VET FEE-HELP affair.

The former employee told Hack what it was like working in the industry, and the kinds of aggressive stand-over tactics used to pressure the vulnerable into signing up to worthless courses.

Megan helped students access their online courses. This meant she was often the first, and only, person from the college to speak with the students after they had been recruited.

Many of the students she spoke with had been targeted by agents outside Centrelink offices or train stations in low-income areas and told they would never have to repay the student debt because they would never pass the income threshold.

Of the 1,000 students she had been assigned, some told her they had no idea they had even been signed up to courses that were costing them about $20,000.

"They didn't know where [the college] had gotten their details," Megan told Hack.

It was Megan's job to filter out the students who should not be enrolled, but she was sandwiched between the agents who made money out of each enrolment, and her bosses who were making money the same way. Her complaints were sidelined.

"We had a test ... that was meant to weed out the students who were not able to complete it, but often times the person signing them up for the course was actually doing that test for them, and when asked during orientation calls if they had done test they would lie and say 'Yes'.

"People would tell me, 'I don't even know what marketing is, can you tell me what marketing is? And they were signed up for a diploma in marketing.

Then there were the students who never answered when she called. If they did not answer, they were considered enrolled. She thinks many students were not even aware they were enrolled.

Earlier this year, Fairfax Media revealed that the Student Loans Ombudsman had been swamped by more than 5,000 complaints in just nine months from people who claim they've been ripped off by shonky private colleges or substandard vocational educational courses. The highest proportion of complaints came from people discovering loans issued by colleges without consent during one of the biggest rorts in the education history. We know that just 0.2 per cent of VET student loan complaints resulted in students getting cash back.

We need to support vulnerable students who have been cheated and scammed, and this bill is another step to enable us to do that. We can never undo the harm caused to so many students due to the decimation of TAFE and the handing over to private providers, in a complete neoliberal pursuit by governments, but this bill can at least right some of the wrongs.

HANSARD LINK

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