Federal Government returns funds following investigation into VET complaints

The Vocational Education and Training (VET) Ombudsman has recommended the re-credit of VET FEE-HELP debts following the closure of investigations into 5,838 complaints made to the ombudsman, as at 31 March 2020. 

The total value of this debt was $94.2 million, including $78.6 million in tuition fees and $15.6 million in loan fees, amidst what The Sydney Morning Herald termed “widespread exploitation of vulnerable students by private vocational training colleges”.

Commencing in July 2017, the Ombudsman completes quarterly reports which assess complaints about the former VET FEE-HELP scheme and the current VET Student Loans program. 

From 1 February 2020, responsibility for assessing the Ombudsman’s recommendations was transferred to the newly formed Department of Education, Skills and Employment from the Department of Employment, Skills, Small and Family Business. 

In the most recent update, number 11 for the Ombudsman, the new 1,045 VET FEE-HELP complaints received during the 1 January to 31 March 2020 quarter were outlined, as well as the finalisation of 3,290 complaints from previous quarters. 

The majority of complaint finalisations came as a result of activity under the VET FEE-HELP Student Redress Measures (the redress measures) and were finalised through the following actions: 

• 1,925 were finalised as a result of the department accepting the Ombudsman’s recommendation relating to VET FEE-HELP debts 
• 918 were finalised as a result of the department’s Secretary Initiated Actions (SIAs), and tuition assurance activities 
• 210 were referred to their provider for consideration through the provider’s grievance procedures 
• the remaining 237 complaints were finalised through a range of actions as detailed in the report.

The Ombudsman also outlined its commitment to addressing a backlog of complaints saying that as at 31 March 2020, 394 VET FEE-HELP complaints received in the 2017–18 financial year remained open. 

This, the report said, represents a decrease of 54 per cent compared to the previous quarter (853 complaints) and “is a result of our targeted efforts to assess and finalise older complaints, reduce our complaint backlog and achieve outcomes for these complainants”.

In relation to redress measures, the Ombudsman noted that as at 31 March 2020, it had recommended the re-credit of VET FEE-HELP debts for 5,838 complaints, comprising 36,340 units of study under the redress measures. The total value of this debt was $94.2 million, including $78.6 million in tuition fees and $15.6 million in loan fees. 

“In addition to the above recommendations,” the Ombudsman said, “we collaborated with the department in the development of SIAs under the redress measures that have resulted in the removal of VET FEE-HELP debts of over $1.2 billion in tuition fees. Over 5,100 of our complaints to date have had some or all units re-credited as a result of SIAs, which has assisted us to reduce our backlog of complaints.”

SIA, or Secretary Initiated Actions, are said by the Ombudsman to be “a more efficient process than individual complaint assessments” and mean that students of a given VET institution, if signed up inappropriately for a course, will have their VET FEE HELP debt removed, and FEE HELP balances re-credited.

In reporting on the details of the Ombudsman’s findings, Anna Patty from The Sydney Morning Herald spoke with Craig Robertson, Chief Executive Officer for peak body TAFE Directors Australia, who said that he, along with other education experts including Peter Hurley from the Mitchell Institute at Victoria University, have warned the federal government against adopting Productivity Commission proposals that include expanding student loans in the VET sector in the wake of the Ombudsman findings. 

The commission, Ms Patty said, has “acknowledged exploitation of the loan scheme by some private providers but proposed tighter regulation to safeguard students.”

With work already underway to initiate longer term reform activities as suggested in recent VET sector reviews, including changes to the VET Quality Framework, the Ombudsman’s report is especially timely, given scoping work with respect to the broader reform agenda and the review of the VET Quality Framework will commence shortly.

To read the most recent report from the Ombudsman, please see here. Information about broader VET reforms is outlined here.