The business of Learning – Setting a maximum retail price on VET training

As a lot of you are aware there has been a massive implosion in the Vocational Education System (at this point mostly confined to Victoria and previous market darling Vocation), but it has got me thinking about the business of vocational education again and how best to ensure that business and industry as well as participants and governments, get the best deal, the best bang for buck so to speak.

Now as anyone who has read my blog will know I am a firm believer in the system that currently operates in Australia, I believe there is a place and a necessary, place for both private and public education providers in the VET sector, I also believe that it is in the public good for Governments to make education as affordable and as accessible as possible for every member of our society.  This of course does not just mean the VET sector but across the entire educational landscape from preschool through to university and everything in between.  Education is good for this country.

Education of course has to be regulated, we have to ensure that our providers, both public and private are not simply becoming degree and diploma factories, churning out students without regard for quality of learning, or that what they are teaching has any relevance to the industries in which these graduates might hope to gain employment, we have to know that our electrician’s, support workers, nurses don’t just have a piece of paper  which says they are competent, but that they are actually competent and competent in the things that their respective industries need them to be competent in to work.

On top of this someone has to pay, and I have said this on a number of occasions previously, there is always a cost involved in education, which needs to be paid by someone, be that someone, the individual, business’s or industries, the government or someone else.  There is always going to be a cost.  There is a cost if we try to deliver VET sector training only through public educators like TAFE, there is a cost if we utilise private providers to enable the streamlining of the public system, There is always a cost.  As I said earlier I believe in the system we currently have, I think having a mix of private and public providers to meet the needs of participants and industry is important, it provides flexibility, innovation and if properly organised value for money.  I also think that given the public good of an educated populace it is difficult to see that user pays system is one that can be justifiably adopted.  One only has to look at the American experience to see the problems their tertiary system is encountering, rising levels of debt and the inability of a significant number of Americans to be able to afford to access the education they want and need are but two obvious ones.  It is also obvious though that the Government cannot be held responsible for the funding of every possible permutation of educational wants that people have, particularly in the VET sector.

Why do I say particularly in the VET sector, well the answer to that is pretty simple, it is in the title, vocational education is education that prepares people for specific trades, crafts and careers at various levels, this to me means, and always has, that there needs to be a vocational, employment outcome related to the education that is undertaken.  Now this should not be taken to mean that every person who undertakes a VET program should either be working, or be tied to a specific post study role, before they are allowed to undertake training.  It does however mean that we shouldn’t be providing funded places for people to do study, just for the sake of it, in areas where there is little or no likelihood of them gaining employment, the much spoken about situation from a few years back where there many many more people studying to be personal instructors than there were roles or one could suggest even need is one example.  Of course this only applies to funding, if you want to a course in underwater basket weaving you should be allowed to, you should just have to pay for it yourself.  And lets not even start to talk about VET FEE-Help and the outrageous prices being charged by some providers, both public and private for Diploma level courses, however when the dollar amount set by the government for direct funding for a diploma course is a quarter of what some of these institutions are charging there seems to be something wrong with the system.

Now I understand that there are financial viability issues across the board for both public and private providers however here is an idea about costs and pricing that just seems to make sense to me.  Why isn’t there a recommended or even maximum retail price set by the government for various programs, this price could then be used to set the direct funding that the government was willing to provide for that particular program, if any, but it would set the maximum price that institutions could charge for a program.  How would the price be set, well that is probably the tricky part, but it is something at governments currently do, they set the level of direct funding which they are willing to pay for particular courses, so by extension establishing a fair maximum price from there should not be exceedingly difficult.  The relationship between the funded price, where one existed and the maximum price would be representative of industry need, employment opportunities and other such factors.

This would not only stop what seems to be rampant profiteering in some areas but would also provide potential students with another indicator of how useful or not the qualification they were considering might be in getting them a vocational outcome.  for example;

  • If the cost of a Diploma of Counselling was set at $6,000, but the funding level was say $500 this would be an indicator that this was not a high priority course or that there were not strong employment outcomes from undertaking this course, however
  • If the cost of a Diploma of Disability was set at the same level ($6000) but the funding was say $5000 this would indicate that this was a much higher priority course with much stronger employment outcomes.

Now I know there are going to be people out there that say but you can’t do that, that is restricting the market, or that we provide a better service or a laptop or additional resources or whatever, and my answer is a simple one, so what.  A system like this would weed out, in particular, the VET FEE-HELP profiteers, it would allow students and employers to have a real idea about the potential outcomes of programs  and well maximum or even recommended retail prices are set all over the place on things and everybody else seems to survive, what are we as an industry any different.

Let me know what you think

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About pauldrasmussen
Paul Rasmussen is one of Australia’s most widely read Vocational Education and Training Commentators. He provides deep, unbiased analysis and insights not only on topical issues, but also on the underlying structure and policy which supports the industry. His writing and analysis has been praised for its uncompromising and thought provoking style and its ability to focus on the issues of real importance to the sector. He has advised various government departments and ministers, training providers, public and private organisations, not for profits and small to medium enterprises on the VET sector and the issues and opportunities facing it. He is one of Australia’s most awarded learning professionals and a regular speaker at a range of conventions and forums. His extensive experience in vocational education, and learning and development coupled with formal qualifications in philosophy, ethics, business and education management allow Paul to provide a unique view of the road ahead and how to navigate it.

3 Responses to The business of Learning – Setting a maximum retail price on VET training

  1. basdenleco says:

    Paul,
    Your idea has merit.
    I also believe there should be a minimum volume of learning stipulated which relates to the actual delivery of knowledge, underpinning skill and assessment by the RTO which does not include copious time in the actual workplace to circumvent delivery and assessment strategies.

  2. Phoebe says:

    I agree your idea does have merit. I also share your concern about RTOs jacking up their prices knowing they can use VET FEE HELP to get candidates accross the line. Paralleling this I have a real concern with online only RTO’s advertising their courses in the high thousands of dollars and then putting it on a voucher online distribution email such as group on and advertising it as 75% off. If the real value of the course is $1000 then sell it for $1000 and offer the odd specials as businesses do, but to value your course over $3000 for an online course and then have it selling all year round through vouchers only would to me indicate that the value is actually 75% off the advertised price?

  3. Brett Hilder says:

    Please God no to price capping. Governments are children when it comes to private enterprise…remember it is bureaucrats who have the greatest influence and would be in charge of the wording of any such legislation.

    And no we DON’T need regulation in VET. Not so long ago there was none and we had a far lower percentage of dodgy providers. For the unethical ones, regs and laws are just manuals full of opportunities to make a fast buck.

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