Vocational Education, Career Development and Employment

I went to a really interesting discussion hosted by ACPET last week centered on the theme, careers not courses.  As some of you may be aware this concept of career development, employment opportunity and workforce participation is a subject that I have viewed as quite important for a while now.  Too often we see post secondary graduates, whether from the VET sector or the University sector coming into the workforce either clearly not properly trained and assessed,  having not been taught particular units or subjects, or that the material they have been taught is out of date.  This therefore makes the student who was hoping that their qualification would net them a job when they were finished not actually capable of doing the role they are supposed to be trained for, yet not knowing that this is the case.  So they submit resumes and go to interviews (when they get past the resume stage) and almost never understand why they don’t get the role.  There are also a not insignificant number of people who get to the end of their study, get into the role they are trained for and find out rapidly that it is just not what they expected or what they want to do.

Of course when you start to think about this issue it becomes really obvious that there is no quick fix here.  It is caused by a number of different failures throughout the system.  The first failure point if that of the mismatch between qualifications, and the requirements of industry and employers, and this is certainly not an issue which can or will be fixed overnight.  It is also one which has a more significant effect in some industries, particularly within fast-moving industries, than in others, but given that training packages define the parameters of the training to be delivered and changing them has traditionally be a long slow process and one in which industry and employers have not stepped up as much as they could have it would seem that this issue may be difficult to address in the short-term.

There are a couple of things which I think can be done, at least more easily than reconnecting training packages and industry, and that is this idea of career development or advice and using that advice and its outcomes to inform training programs, units of competency and placements, so that it maximizes the opportunity for the student to both understand the role they are being trained for, and their ability to actually be hired and function in that role.  The question then becomes how do we achieve, how do we map qualifications, training, and student outcomes, with industry or employment need.

The first step is that people who are giving advice to potential students, particularly where those students are younger, actually need to understand both the training industry and landscape, and they need to understand the requirements of industry or the roles that they are advising people about.  The sad state of affairs is that for the most part this is not the case, at best they have one but not the other.  There are a few notable exceptions of course, but still at the moment they are exceptions nothing more.  Why? Well that is a relatively easy answer, the vast majority of people who are advising potential students are employed by job agencies, apprenticeship and traineeship providers, or educational providers (RTOs for example).  They are not in a real sense career advisers, their real role is something different, either placing people into training programs, or placing them in employment.  Their function and agendas may not be as student centric as we might like to think.  Of course as with everything I am generalising here and there are certainly, for want of a better word, advisers, who are student centric and seek to develop a relationship with the potential student which will provide that person with as good an outcomes as possible.

The other part of the equation here is the training providers.  Training providers need to understand the employment market into which their graduates will be entering.  They need to understand the skills and knowledge and the units of competency which best fit the industry or part of the industry into which the student wants to work in, and more importantly that knowledge needs to be current and accurate.  They need to understand the set of units, and the knowledge and skills which come out of those units, which will maximise the students potential to work in the area they want to.  The problem is of course that there are a lot of courses out there, particularly in the business and community services area, but in other areas as well, where the units taught and the content of those units is so generic that it virtually prepares the student for nothing at all except for a long list of rejected resumes.  One of the reasons why, in a previous role, the organisation i was with had its own RTO was to ensure that the units covered in the course, their content, how they were delivered, and what was expected during placements etc was controlled and produced graduates with the right set of skills to move directly into employment in the organisation.  We also did extensive pre-enrollment testing and discussions to ensure that the people entering the course were a good fit and were likely to complete.  Now I know that some of the apprenticeship agencies and job agencies (some of the better ones) are doing this.  Testing candidates to see how they cope with change and to look for what careers might suit them the most.  And this sort of activity is vitally important because, just because a year 12 student says he likes to play video games and wants to be a game designer, does not mean that it is the best choice for him, (the game design industry in Australia directly employs only about 900 people btw) and may actually harm his chances of getting meaningful employment or doing further training to change careers later, due to impacts upon funding.  It is really important to note here that I am not suggesting that we need to stream and railroad people out of careers that they actually wish to undertake, I am just suggesting that there a lot of people who are being trained who really don’t understand the nature of the industries or work that they are being trained for, and if they had been provided with a fuller explanation of the various careers which were available to them may have chosen a very different path.

The other thing which is important here and is which often overlooked is the fact that industry needs to come to the party as well, they need to be clear about what skills and knowledge they require of potential employees and work with providers to deliver on those skills and knowledge.

Unless we have these links between industry, providers and advisors, greater knowledge of options and the effects of various options on future choices, and truly independent advisors, it seems difficult things will improve.  What we need is an ecosystem, where the potential students are getting, timely, independent, accurate and individualised advice, which leads them to providers who create individualised learning plans for these students, based on what the student wants and what industry needs, with placements, internships and other pre-employment opportunities offers by employers to provide student with well-rounded experiences and the best possible opportunity to convert their qualification into a workforce outcome.

 

 

A war on TAFE? Some VET facts and myths.

Recently again, my news feeds, social media and other outlets have been jammed with the AEU, Greens and Labor people talking about the war on TAFE and that non-public providers are causing the death of TAFEs in Australia.  To be fair I understand what is going on here;

  1. A not insubstantial number of AEU members in various states are TAFE workers.  In fact the overwhelming majority of AEU members from the VET sector come from TAFE.  It therefore makes sense that the AEU vigorously pushes the TAFE bandwagon.  Less TAFE staff means (probably) less AEU members, making them a less relevant voice in the VET sector.
  2. The Greens with their deep ideological commitments to public provision of a wide range of things including education and a VET policy that says no funding should go to non-public providers at all, coupled with a solid understanding of their voting base, means that there is a war on TAFE, resonates with their political agenda and makes them more palatable to their voters.
  3. Labour.  Well with deep connections to the Union movement, a lean towards the left, and again a good understanding of their ‘true believers’ talking up the death of TAFE makes sense.  It also helps that they can use it to kick the government as well.

The fact that these are the main groups behind the various save our TAFEs movements makes it pretty clear that a lot of the rhetoric around this and a lot of the negative press leveled at the non-public side of VET is, well, driven by political and ideological agendas.

Now two things before I go on.  Firstly let me make it abundantly clear that the position taken by the government and its advisory groups are, just as much as with the groups above, driven by ideological and political agendas.  Secondly, as I have said so many times before, we need to have a strong efficient and effective public VET education system in this country, losing it would be a loss for Australia.  However, we also need a vibrant and well supported non-public system as well.

Let us then jump away from the rhetoric and agendas and just look at some facts however, and then perhaps we can make some considered conclusions about some of the recent rhetoric.  Now bear in mind these facts have come from data publicly released by NCVER.

Myth Number One: Private RTOs have grown out of control.

Fact Number One:  A small number of private providers (and some TAFEs) substantially increased their enrolments mostly on the back of the flawed VET fee help scheme.  However 47% of all non-public VET providers have less than 1,000 Students.

Myth Number Two: TAFE provides a far better quality of training than non-public providers.

Fact Number Two:  If we look at the Employers’ use and views of the VET system 2017 report from NCVER we can see that Employers report a 91.5% satisfaction with private providers against 85.6% with TAFE as well as an 82.9% satisfaction rate for the delivery to apprentices and trainees as opposed to 81.8% for TAFE.

Myth Number Three: Private providers cherry pick students and courses and leave TAFE to do the heavy lifting with remote, disadvantaged, disabled and indigenous students.

Fact Number Three:  Private providers actually deliver to 50% of all indigenous students, 43% of all students with a disability, 54% of the most disadvantaged students, and more than half of all remote and very remote students.

Myth Number Four: TAFE does the vast majority of the training of trainees and apprentices.

Fact Number Four: Non-public providers delivered 45% of apprentice and trainee enrollments.

So I am just going to leave those here for you to think about for a little while and remember the old saying ‘Never let the facts get in the way of a good story.”

Have a great weekend everyone.

What can we do about the shambles that is VET?

Well VET is in the news again, more private providers deregistered or gone into administration, TAFEs failing to meet compliance standards, not assessing students properly and generally behaving badly, and everyone yelling at each other and trying to pass the blame.  It really is, well to put it mildly, more than a bit of a shambles.

Now I know that the vast majority of people in this sector, at all levels, whether they are trainers and assessors, administrative people, or management, and across all parts of the sector, private, public, not for profit, community and enterprise, are committed to doing the right thing and to assisting whoever they work with to achieve the best possible outcomes they can from their study.  I know this.  I know this because I have worked in and with the sector for years.  However, when someone from outside looks in or picks up the paper, or thinks about Vocational education as an appropriate choice, what do they see?  They see a shambles, a mess, and not just a small mess, a mess that has been going on for years now.  Infighting, bickering, passing of blame, atrocious business practices, appalling customer (student) service.  In short they see something like a cow that is stuck in the mud which would probably be better off put out of is misery before it sinks any further. And there is the trouble, we can talk about all the great things the sector does, all the wonderful people in it, how it creates opportunity and outcomes, and is an enormous benefit to Australia.  But, if the sector looks like it should be taken down to the abattoir and turned into pet food, then we my friends have a very serious problem on our hands.

So what can be done to fix this?  What does everyone involved in VET in this country need to do to turn all of this around?  let’s be really frank here, we need to turn it around, because we are being left behind and our reputation for being one of the best if not the best vocational education countries in the world is definitely starting to fray.  Just the economic impact of international students not coming here to study because our VET education system looks like a garbage dump is enormous.

The first thing that needs to happen, is we need a common voice.  All of this bickering, infighting and blaming everyone else has to stop.  I know that TDA, ACPET, ERTO, AEU and every other interest group out there is trying to support their membership, but sometimes it doesn’t help!  Sometimes your agenda is harmful to the sector and just makes everything worse.  If this means that some TAFEs have to be closed or suspended from delivering courses, because they broke the rules and did a really crap job then so be it.  Stop defending them and blaming others.  If private providers don’t meet the standards or behave unconscionably, then don’t defend them, throw them out and advocate for their suspension or closure.  Stop defending these appalling behaviors.

Then, come together and present a single unified vision for the sector, put your agendas away for a little while and come up with a single plan.  Here’s the deal to, if some interest group, or peak organisation or union doesn’t want to play, then so be it, address it, say that they wouldn’t come to the party, couldn’t let go of their agenda, and don’t want to be part of the vision, and then present a cohesive plan for how VET should be run in this country and just ignore them.

If you are a provider you need to do the same thing. Stop just thinking about yourselves, stop looking at just the bottom line, stop thinking about how quickly you can pay off your Porsche, stop thinking about your next expansion and how you can slip in via the side door and get on the good side of the government, or increase your influence by pandering to a particular party line.  Its rubbish and you are stuffing it up for everyone else.  Start realising that this isn’t about you, it’s not about you scaling the bureaucratic ladder until you get to dizzying and rarefied heights, or creating a small fortune you can shift offshore.  It’s about the students and the industries that rely on you providing qualified, competent students, that they can employ.  In addition, stop defending other providers who have done the wrong thing, or better yet, tell someone when they are breaking the rules, you know stand up for the sector you are supposed to be invested in, rather than just yourself.

The same goes for trainers and assessors, and admin people.  I know that you are the guys who usually get shafted.  You are the people who have to put up with everything that flows from the top down and often for so many reasons, you don’t get any say, or choice, or have the ability to say anything without repercussions, or to just walk away and go somewhere else.  Here’s the thing though, if you don’t do something, or even try to do something, you like everyone else in the sector is complicit in this behavior.

Some of you might have noticed that I didn’t mention the government here at all.  Didn’t make any suggestions about what they could do?  That’s because they don’t have to do anything really.  Regardless of what side of the political landscape they are on, they just need to essentially do what they are told.  They need to support the sector in the way it needs to be supported.  They need to stop listening to one interest group over the other, or relying on academics or bureaucrats, who have never worked in the sector a day in their life to inform them.  This however can only happen if the sector comes together and presents them with a single unified vision and plan to drive VET forward and make it work.  If we can’t do that then governments are always going to play one off against the other, and pander to the side that is going to get them more votes or raise their profile.  That is what governments and ministers do.

The real issue here of course is if you don’t do something about this yourselves, then someone else is going to.  Someone else is going to come up with a grand idea of how to reform the sector and get in the governments ear and then you are stuck with whatever you get and its your own fault.

Anyway, that’s just my opinion.

 

A view from the outside – sort of.

Now that, as many of you know, I am out of the day to day business of vocational education and in a more organisational learning and development (among other things) space, I have been looking at the VET sector through a somewhat newish lens, though a lens I have admittedly looked through before and I am troubled by what I see.  Someone asked my the other day what I thought the biggest issues facing the sector were.  I started to suggest that the kinds of things people have heard me talk about at length and then it struck me that I needed to push all of that thinking away and have a fresh look at the sector as someone sitting outside of it, or at least only on the very edge and so I did and I realised something.

No one outside of the sector actually cares about what is happening in the sector.  No one really cares about the problems with the TAE, whether ASQA is doing the right thing the right way, compliance issues, what the issues with amount of training are, no one actually cares.  They only care when they go to a provider, ask for what they want, and get told they can’t have it or they can’t have it in the manner in which they want it, and even then they don’t really care as they will either except it or simply go to another provider.  And I am not just talking about business’s here, I am talking about individuals as well, and that is a very very big problem for the sector.

Yes lots of people are involved in the sector, lots of people, millions in fact gain education, training and qualifications through the VET sector in this country, and even if we discount international students and training there are massive sums of money involved and VET is a critical part of our economy, not just in terms of that money, but in terms of the generation of skills and knowledge within this country, in terms of making us as a whole, smarter, better, more skilled, and more knowledgeable.   But again, very few people outside the sector actually care.

Now to be fair this is not an active dislike of the sector, the rampant hatred of all things VET that we saw in the thick of the VET fee Help debacle has dissipated, it is simply that VET  is not on the radar of most people as something which is important, that they need to understand, or that they need to care about.  It is at best a piece towards the back of the paper to which people either respond with ‘bloody dodgy private providers’ or ‘bloody TAFE.”  The sector has unfortunately become something that people only take an interest in, when they intersect with it and then their interest is purely, for the most part, about how they get what they want from the system and once they have it the sector floats away from their lives.

We even see this when if we listen to the way the which the sector is thought about by not only those outside of it but those inside of it as well.  Principles, guidance counselors, and parents who view the sector as somewhere for those kids who aren’t going to get into university to go.  Providers, consultants and all of the other ancillary business’s around the sector itself, who see the sector as a way to make money.  Bureaucrats,  unions, governments and those in positions of power who see the sector as a means to an end, stepping stones in a career, or organisations who see the industry as nothing more than a way to train their staff for as little actual cost as possible.   Please don’t get me wrong here I am not suggesting this is the way everyone thinks, but I can tell you it is far more prevalent than you might want to think.

So why is this the case, the answer is both simple and complex.  It is simple in that there is no single connected vision for vocational education in this country, there is clear no statement about the value of vocational education.  Governments talk about how important it is, but generally only to those from the sector, and in the background keep reducing in real terms the amount of funding the sector has. It is never the center piece of discussion, jammed in between K-12 and University and seen by many nothing more than a way to appear to reduce unemployment.

There is no single driving vision, that can be clearly articulated and disseminated, talked about, and used to educate the public on the enormous value that this sector brings to this country and that is real shame.

Anyway that’s just my opinion.  Hope all of you that went had a great #2017NVC and learnt something that you can take back and make the VET sector stronger.

Does Public VET mean Quality VET?

Before I start I need to make something clear, I think that a well supported public VET provider is, for the most part, a vital part of the VET landscape in this country.  There is work and projects which are done by the public provider which are either not done by non-public providers or only done by a small number of non-public providers, usually from the not for profit sector.  This piece should also not be taken to be criticism or bagging of the public provider sector, but rather a look at what seems to be a view being pushed by a range of particularly media commentators that the Public provision of VET through TAFE automatically means quality.

Firstly then a couple of facts.  The vast majority of private, again I prefer the term non-public providers, deliver high quality outcomes for their students and employers.  We can see this from NCVER data, and a range of reports from the various state and federal governments.  We can also see this from the small number of non-public providers who have closed or been closed as a result of the fall out from the VET FEE Help issues.  As I have always maintained there were about ten or so providers who were not playing the game as it should have been played so to speak.  10 out of around 4000 or about 0.25% of all providers.  Enough defending the value of non-public providers however’ what is a far more interesting phenomenon I think is the calls from various commentators, that governments should be cordoning off more funding for public providers, because, and this seems to be a common theme, public providers provider quality training.

It is important to note here that I do believe that for the most part public providers (TAFE) do provide quality training outcomes to their students and employers, however as with non-public providers I simply do not think that we can automatically assume that public means quality in all cases and in all courses.  We certainly cannot assume that public means better than non-public in all cases and in all courses.  There are numerous examples across widely varying industries of non-public providers delivering training of at least the same, if not better quality than that which is delivered by TAFE.  Just as there are examples in the opposite direction as well.  TAFE does some things very well. Non-public providers do somethings very well, and across the board there are things are probably not done as well as they could be.

Of course the point of this view is to push the agenda that because TAFE equals  quality that TAFE should get the lions share of government funding.  The interesting thing is that it already does.  The vast majority of government funding and training monies go directly to TAFE, in fact in most states the split between public and non-public when it comes to funding is about 80/20.  So somewhere in the vicinity of 20-25% of government funding goes to non-public providers, while 75-80% goes to TAFE.

So if TAFE already gets the vast majority of government funds allocated to training already,  and if across the board it really doesn’t seem to matter where a person goes to get your training done, as they are probably going to get a quality experience, which meets their needs and provides them with the outcome that they desire regardless of the choice them make, where, oh where is this view coming from.  Part of it is certainly ideological and interestingly I have no real problem with groups, particularly political parties, taking their ideological stances, I just want them to be honest about it.  I don’t care whether you are a politician, part of the education unions, an academic or a researcher, or anyone else for that matter, if you are making a stance on ideological grounds then at least be willing to tell us that.

What this sector needs going forward is not infighting between the various parties, interest groups, providers, media and others, who are whether consciously or not, promoting a particular ideology or agenda.  We need facts and informed discussions.  We need everyone to sit down, put their baggage, their ideologies, to one side, and listen to what other people are saying.  Listen, then openly talk and enter into meaningful discussions about what is best for this sector and the vital part that it plays in the future of this country.

Doom and Gloom or an opportunity to Bloom – VET student loans scheme

So they say a week is a long time in politics and this last week has been a cracker for so many reasons.  The only one I am going to talk about today though is the Vet Student loan scheme which Minister Birmingham announced last week.  Today we saw the release of the eligible courses list for the new program with around 350 programs making the initial list, though there is room for submissions for the inclusion of other programs to be made and these close on 23 October.  Enough about that for the time being, I will come back to the list a little bit later.

There has been a lot of criticism, some of which I think has justification, some of which I don’t think does.  What there has been is a lot of doom and gloom and a lot of talk about the government ruining people’s businesses.  We even saw AIPE go into voluntary liquidation on Friday.  What cam to my mind when I was listening to all of the discussions, most of which will continue I think for at least some time yet, was how it all linked to some of the things I have often talked about in terms of business models and the business of vocational education.  I have heard an number of people talk about the fact that their businesses will be destroyed as a result of these changes or at the very least they will have to downsize their businesses substantially.  Before I go on it is really important to say that I feel for these people.  These people have for the most part done the right thing, obeyed the rules and built businesses which provided high quality educational outcomes to their students and the industries they were involved with and at least in some cases the investments they have made in these businesses over the years will be seriously devalued.   What this drives home to me is the important of distributed revenue streams in your business.  Providers who rely to heavily on one source of revenue, particularly when that revenue stream is controlled by the government in some way are always going to be faced with these challenges.  The same can be said of providers who rely entirely on fee for service markets, when the market wobbles, particularly if they are involved in niche areas, so do they.  All of those who are in the business of vocational education, even public providers need to have diversified models of revenue generation in order for them to weather changes to funding models and changes to the market in general.  It may be okay to make hay while the sun shines, but you always need to remember that some days its rains.

There has also been criticism of the tiered or banded system for student loans, with the levels being $5000, $10,000 and $15,000 depending on the type of qualification, although when we look at the draft list which has been released we see that everything but business and commerce it appears will be in the $10,000 band or above.  The criticisms leveled have again be around how providers can deliver the course for the value of the loan the government has put on it.  Now to be fair the government has said that the loan cap is just that a cap on the amount of money they will loan a student to pay for a course.  They have said that providers can charge whatever they want to, but then the student will have to meet the difference between the two figures.  It is also fair to say that there is an argument about access and equity which can more than reasonably be made about having significant differences between the cap and providers fee, the ability of potential students to meet that gap and questions of equity which arise around that.  This is however an argument for another place, suffice it to say here that large difference between the loan cap and the provider fee will make it difficult for those in the most vulnerable and lower socio-economic groups to be able to afford to enter training through this scheme without additional assistance, where providers choose to charge fees higher than the loan cap.  There are of course also counter arguments about appropriateness of qualifications, state entitlement funding and employment outcomes.  Again however a range of these criticisms are tied to the kinds of business models which were encouraged under the old VET FEE Help system.  I know of a number of providers who despite having extensive Certificate I-IV scopes only ever advertised the high revenue VFH courses on their websites and through other media.  They also did not seek to build their entitlement funding or fee for service businesses because there were substantial sums of money being generated through their VFH business operations.  The funding drove the business models, a little bit like the tail wagging the dog so to speak.  One of the reasons why some providers will find it difficult to deliver under this new scheme is that their model of delivery, and student acquisition is one that relied on the continuation of VFH fees at particular levels.

I have often suggested that most, (and it is really important that this is taken for what it is, a generalisation which also acknowledges that there are outlier courses which cost substantially more to deliver), that most diploma level courses can be delivered in such a way as to produce high quality student outcomes and competency for $10,000 or less.  Why do I say this; because less than 5 years ago they were and there was very little if anything wrong with the graduates being produced.  Over 5 years we saw prices of some Diploma level qualifications rise by 300-400% and business models develop which required these increases to be cost-effective.  It is vitally important to note that most of these business model were not flawed or did not seek to rort the system or rip of the government or students.  Their only issue was that they relied so heavily on both VFH and particular levels of funding.  The ability to set fees where ever providers wanted allowed and even promoted providers adopting business models that only worked under a certain set of circumstances.  Are there models which will work under the new scheme?  Certainly there are and I think the suggestion that it will drive all providers to deliver one to many elearning with little or no support are false.  There are solid face to face models which not only can clearly operate under this new model but can also be profitable.

let’s go back to the list then shall we.  As I said earlier the vast majority of programs are at the $10,000 or $15,000 dollar level with it appears only management and commerce at the lower $5,000 level. A lot has been made about the government ‘picking winners’ so to speak and the inequity between someone who wants to study a vocational education course over a Higher Ed course and while there is weight to this argument there is also weight I think to the argument that where the money is being provided by the government, even if that is through an income contingent loan of some description, there needs be a return on that investment in terms of workforce outcomes.  Is, by creating a list, the government saying one course is better than another, no I don’t think this is the case.  I think the government is legitimately saying, one course seems to have better workforce participation outcomes than another and because of that we are going to provide funding for students who want to undertake this course.  The interesting question that arises from this of course is whether it is fair to apply a test like this to VET and not to HE, but again that is a debate for another time.

So why did I call this post Doom and Gloom or an opportunity to Bloom, mainly because I think as with all change this one presents us as providers with a choice.  We can either spend the next few months worrying, complaining and trying to get the government to change it mind, which it may do on small things, but I doubt it will on anything major, or we can look on this as an opportunity to re-energise what we do, consider our business models, look at ways of not just working, but thriving in this new environment.  I will let you guess what I intend to do.

Anyway as always that’s just my opinion.

Massive changes to VET FEE Help – The King is dead, long live the king

While right at this point there has not been a complete outline of what is going to happen it is fair to say that the days of VET FEE Help are over.  The deeply flawed system which most of us have been critical of almost since its inception will be scrapped at the end of the year and replaced with a completely new system for 2017.  If you want to look at what is currently being reported about the changes you can see articles here and here.

What do we know at the moment?  Well it seems from looking through the information that I have a lot of the suggestions that myself and other have made and that I have talked about at length in previous articles (Redesigning VET and reinventing VFH) have made the cut shall we say.  Lets then look at the major changes we know about.

Everyone will have to reapply and there will be tighter conditions for entry

This had to be part of any package of reforms as far as I was concerned.  No package where currently contracted providers were simply rolled over into a new system was ever going to have legs. The old application system and criteria were systemically flawed and concentrated on the wrong metrics entirely when both determining if someone could be a provider and then managing that provider.  Making everyone reapply will almost instantly contract the number of providers because a number of current providers will simply self select out for various reasons and I am certain that the government will not accept contracts with a number of providers who may look at applying.  The idea that Relationships with industry, student completion rates, employment outcomes and a track record in education will all be assessed when deciding which colleges can access the loans program is a breath of fresh air and should have been included in the first place.

A ban on the usage of brokers and cold calling by providers

This is something that had to happen as well, not just because of what brokers have done to the system, but because cold calling random people and hard selling them a $20,000 diploma has nothing to do with educational outcomes and everything to do with making as much money as possible in the shortest period of time.  It has been my opinion for a long time now that the rise of brokerages, and providers willing to use their services, no questions asked shall we say, was the single most significant factor in the issues which arose from VFH.

A three-tiered system of loan limits will be introduced, with loans capped at $5000, $10,000 and $15,000 depending on the cost of teaching the course.

Again this is in my opinion a no-brainer.  I am yet to be convinced and a lot of people have tried, that a diploma of management is worth $10,000 plus. I think a tiered system rather than a flat cap acknowledges that different types of courses require different investments and have different costs associated with their delivery.  What this will do is reign in the costs associated with programs and bring them back to some sort of normalcy, something they haven’t had in a number of years.  Remember in some cases we saw 300-400% rises in course fees over essentially a 5 year period, with, in the vast majority of cases, no changes to costs or content, well except for having to pay a broker 25%.   UPDATE – Loan caps only apply to the amount of money which a student will be provided with by the government to ‘pay’ for their course.  Providers may charge whatever they wish for the course in question and students will be required to pay any difference between loan cap amount and course cost themselves.

Only students enrolled in courses aligned with industry needs and likely to lead to a job will be eligible for the loans.

I have said it before and I will say it again I am sure, vocational education is about employment outcomes and workforce participation and my mind has boggled at some of the courses which I have seen offered by certain providers.  I acknowledge that there are concerns around priority lists and the like, but if we are being honest here just how many personal trainers and counselors do we need to have.  This in conjunction with the tiered payments model should at least, if properly applied mean a much stronger employment outcomes for money invested in income contingent loans.

The new scheme will include tighter conditions so colleges can be paid in arrears and poor performing institutions can be suspended and have their payments cancelled.

All providers will be paid monthly in arrears based on authorised and verified student data. This is something which should have been part of the system from the word go.  Large upfront commencement payments drove the other activities which broke the system.  If there had not been such substantial almost unregulated upfront revenue a lot of the issues which occurred simply would not have happened.

The Fallout

Massive contraction at the Mega end of the market. Those providers with large exposure in their revenue streams to VFH, particularly those carrying a high level of debt which requires servicing are going to be in serious trouble as will any provider who has been used to charging $10,000 plus for a Diploma of Business, whether they are small or large.  Any provider which doesn’t have a diversified business revenue model will struggle to find their feet again and we will I think see a not insubstantial number fold or contract heavily.  If I was a provider who relied on VFH for a substantial part of my revenue, particularly if my dealings with ASQA or the Department had been anything less than favorable, I think I might be a little worried right now.

But anyway that’s just my opinion.

Let’s start being positive about VET

As some of you know I have been out of commission for a couple of weeks due to an injury to my hand, and during this little break from writing, I have spent a lot of time reading commentary, writings and discussions about the sector.  Something has struck me from all of this reading and it is something that really concerns me.  It seems that a lot of the commentators, industry leaders, thinkers and just people in the sector generally are spending a lot of time complaining and focusing on the negative issues which seem to be surrounding us.  Why does this concern me? Well mainly because we know that what it is we focus on and think about is what we see and what we get.  So if we continually talk about what is wrong about this sector, what needs to be fixed, and what all of the problems are, that is what we are going to see, that is going to inform our viewpoint of the sector and more importantly it is going to infect the viewpoint of others about our sector. Don’t get me wrong here, I like everyone am guilty of being critical of the sector and sometimes we do need to verbalise criticism, but too often I think this critical view takes over, so I want to try to change that a little today and see if we can’t just be positive about the sector for a while.

First off I am really proud of the sector that I work in.  I feel privileged to work in the VET sector, this is a sector that changes lives.  I was at a conference recently where a lot of people (and a lot a highly placed people) shared stories about how this sector had changed peoples lives.  Like the (youngish) grandfather who had improved his reading so much while undertaking a VET course that he was now able to read stories to his granddaughter and the massive change in the way he felt about himself that this seemingly small thing had created.  The kids from generationally  unemployed families, in deeply impoverished areas, getting apprenticeships and breaking out of the cycles that had been their lives.  People with Mental illness getting qualifications and training to help them to be able to work with others with mental illness to help those people on their own roads to recovery.

What we do in the VET sector is important!

We don’t just issue pieces of paper to people, or fill their heads with knowledge, or teach them how to perform tasks.  All of that stuff is well kind of the boring stuff of the sector, the nuts and bolts that sit underneath what it is that we really do.  We offer people the opportunity to change their lives, to have the opportunity to do things they are passionate about, to look at the world differently and explore the opportunities that are there.

VET changes lives!

I am so grateful that I have been able to work in the learning sector, be it VET or organisational learning, or professional and personal development for so many years, because it fuels that passion and that idea that what we do is important and let’s be clear it is not just important to the people we teach.  The importance of what we do if is wider than that.  We have seen recently several reports about the return on investment created by the sector, the value of international education, and the range of other important things that this sector does for the country as a whole.

So I have a little challenge for you all, Whether you are from the public sector (TAFE), a private provider, a not for profit or and enterprise RTO, let’s even if only for a little while try to focus on the great things this sector does, let’s talk about and share the good stories, the life changing moments, the things that really matter, because if we do that then we will improve the sector and the image of the sector far more than we ever could by focusing on the negatives.

 

Anyway, that’s just my opinion.

On the Redesigning VET FEE-HELP Discussion Paper

So as most of you are aware the Redesigning VET FEE HELP discussion paper was released on 27 April with submissions closing on 30 June.  So what I thought I might do today is have a look through the paper and discuss some of the propositions and statements in it and then see where we land after that.

As I have said many times previously, I think income contingent loans for a vital part of the educational landscape, they allow people to study things that they want to study, some of which may not have direct correlation to employment outcomes.  They also provide an opportunity for people, who without these processes may have not been able to upskill themselves in relation to job roles then may be interested in now, or in the future.

The first part of the paper goes through the purpose and reasoning behind VFH and how and why the system was extended into the VET sector from the higher education sector.  Also interestingly I think, it points out some of the differences between the two sectors which have, at least in part have been responsible for some of the problems the income contingent loan process has had in the VET sector which didn’t occur in the higher ed sector.  These differences are things like lower barriers to entry, lower graduate pay rates, competency based rather than a graded system, lack of formal semesters, with the preference being for rolling enrollment dates and a not insignificant number of VET enrolments where the student does not intend to finish the course rather their intention is to only complete a small subset of units, which has an effect on overall completion rates.

It also makes the point that the regulatory landscape surrounding VFH is quite limiting in terms of responses.  Non-compliance with ASQA and the regulations do not have a necessary impact on the right of a provider to payment of fees, the department had only limited powers of audit and information gathering and limited capacity to take compliance action for RTOs who had appealed ASQA decisions.  As it sates in the paper ‘until January 1 2016 the only relevant consideration for determining a providers’ payments was whether or not the providers’ student had an entitlement for VFH’.  In addition it looks at the fact that there was massive growth in VFH between 2012 and 2015 with the highest grow areas being those where the students could be considered to be most at risk or vulnerable.  There was a 649% increase in indigenous enrolments, 503% increase in very remote enrolments, 181% increase for people with disabilities and 172% increase for lowest socioeconomic status quintile.  In fact the lowest increase was in the highest socioeconomic quintile.  Now while this itself is not necessarily a problematic thing as it may point to more people, who would not have usually undertaken training, entering the system, it clearly should have been a red flag given the outcomes we know have occurred.  There was also a significant increase in tuition fees from an average of $5917 for a diploma in 2012 to $14018 in 2015 with VFH loan values doubling from 2009 to 2015.  This caused a massive disparity between the cost of diplomas under VFH and price various state governments were willing to pay in terms of funding for the same diploma.  A Diploma of Salon management for example with a smart and skilled pricing of $6,330 had an average VFH price of $32,941. The other issue that sat along side this, was the issue that a great many of the qualifications with the highest levels of enrollment had little or no actual links to employment outcomes.  A prime example of this is the Diploma of Community services where there is little or no job outcome as the vast majority of employers in the sector want people with a certificate III or IV in aged care or disability or similar as these are the qualifications which are required for the vast majority of roles.  The paper then goes on to discuss a range of other issues, including the dominance of the system by a very small number of providers, before moving on to look at the current and future reforms to the system.  It does appear however, that the 2015 reforms are having an effect on VFH providers with all areas of complaints (with the exception of debt dispute, which is a lagging indicator of previous poor performance) have dropped, in most cases significantly.  It is also acknowledged in the paper the capping of enrolments at 2015 levels may have had an effect on some ethical providers, but that it was necessary to reign in the soaring costs associated with the program.

So now let’s move on and have a look at the discussion questions posed.  The first question posed is whether there are additional eligibility requirements which might be necessary for the VFH system, with an additional question around administrative complexity in relation to LLN skills for potential students.  Now I am going to be a little controversial here because I think to a large extent both of these questions can in fact be answer quite easily.  Yes there should be an additional requirement for VFH students (which should if done well solve the LLN issue) and that is at a student not be eligible for VFH unless they have already successfully completed a course of study at Certificate IV or lower.  It is important I think to remember that is would not be a course prerequisite but rather a policy setting around eligibility for the VFH loan scheme.  If you have not completed a lower level qualification then you are not eligible for a VFH loan.

In terms of the lifetime loan limit for students I see no problem with it being part of and the same as the general Higher Ed FEE HELP system, providing of course there are some other refinements to the system put into place, particularly around the rising cost to students of obtaining a Diploma.  I have on a number of occasions suggested that the government rather than limiting the loan amount or price setting (setting a price that all providers need to charge) it rather needs to simply develop and publish, and force (through its VFH contacts) all providers in all of their materials to publish, a ‘recommended’ price.  I do however think that attempting to calculate this price, factoring in mode of delivery over complicates the process without adding significant value.   With this recommended price openly published providers can then still choose to charge whatever they wish.  Those who wish to charge lower than this may justify it by them being a TAFE or a not for profit or any other number of reasons, and equally those who charged a higher fee would then need to justify why their course costs where higher.  The justification process could also be one that was part of the VFH application process as well, where providers were asked to justify why their course costs were at the level they had set them if they were significantly over or below the recommended price.  I also think the concept of linking VFH funding levels to industry need, employment or pathways to further study has value.  A priority system (similar to that used in some of the states) could then be used to determine the level of VFH funding applicable to the course.  A level one priority program would have a VFH loan rate of 100%, Level two 75%, Level three 50% for example.

It is my opinion and one which I have held for some time now, that external, third-party brokers, should simply be banned from the VET sector.  They add zero value to system and only serve to drive prices up.  All marketing should be done by the RTO themselves and directly controlled by them.

Rather than simply a VFH ombudsman a far more elegant solution would be to  appoint a VET sector ombudsman, however it is acknowledged that given the way in which various powers are spread across the states this may be significantly more difficult to achieve therefore it seems that an ombudsman to deal with VFH.  It would be my suggestion that this simply be a short-term appointment to deal with the current issues with its continued necessity being considered after changes to the system had been implemented.

I am also in favor of provider cap of some description.  A provider should on application to utilise VFH estimate the number of VFH students they will have within the next financial year.  This initial estimate should be capped at a level not exceeding 75% of their current student enrolments.  This estimate process could then simply occur each year which any increase on the previous years cap of more than 10% requiring justification as to why the number of enrollment will increase that significantly.

In terms of quality measures the links between results of ASQA audits and non-compliances and continuing VFH approval should be significantly strengthened, with higher quality standards being applied to all VFH providers through the provisions of the contractual arrangements.  This should include student completion and progression rates and additional outcome measures around employment and further study outcomes resulting from the various courses of study.

It should also be the case that with any new standards/contracts that all current providers be required to reapply for VFH status under any new system.  There should be no providers who are simply moved to the new system.  The current system should be finalised at the end of 2016 and all students either given two years from their initial enrollment date to finalise their course of study or moved onto the new system where appropriate.  In addition there should be a legislative time limit placed on all approvals (no more than 3 years) which should also be at the discretion of the minister to alter or removed as deemed  necessary on a provider by provider basis.  All providers approved to deliver under VFH should be, as with most funding contracts with the various state governments, required to report their avetmiss data on a monthly basis.

I think the current tuition assurance system is solid though there needs to be stronger links between the government and the providers of the schemes in order to ensure that students are provided with the range of protections which they require.

It is and continues to be my position that upfront payment of fees is in general a mistake and the system should be moved to a model which is more reflective of completions rather than commencements.  A fuller discussion of this can be found here.

Anyway that’s my opinion.

 

Labor want a review into the VET sector in Australia

So the big news around the place this morning is the announcement from the Federal Labor Party that if it wins office in the next election it will launch a major review into the Vocational Education and Training sector in Australia.   A full review of the sector is certainly well over due, particularly as we have seen the amount of funding provided to the sector decline over the past few years and certainly not keep up with the schools or university sector.  However, it needs to be an actual proper review.  A review that puts aside our entrenched bias, ideological and political agendas and simply focuses on one key question, what do we need to do in order to ensure that the VET sector in this country is able to provide value for Australia for many years to come?  Now the rhetoric in the announcement about evidence based approaches to policy making and the terms of reference for the review which can be found in the Shadow Ministers press release seem promising at least in terms of an impartial review , but will we really get that?  We have seen both Labor and Green politicians jump on the ‘Stop TAFE cuts’ bandwagon, which is being heavily pushed by the Education unions with both parties already in various forums suggesting that the answer to problems in the sector is to simply pour more money into TAFE.  So I would call on both Bill Shorten and Sharon Bird to emphatically promise us that any review into the  VET sector is actually an impartial one.  One that is prepared to BBQ sacred cows if that is what turns out to be necessary.

So how can this kind of impartial review be undertaken in a way which will convince the sector that it is transparent and not simply a justification of pre-existing ideologies.  Firstly there needs to be representation from all of the parts of the sector public and non-public. The terms of reference need to not preference any particular part of type of provision, which they currently seem to.   There needs to be a chair or whoever is tasked with leading the review who is truly impartial.  The person needs to be someone who the sector can trust is not driven by ideological commitments, someone who does not have commitments to either the public or non-public parts of the sector.  An academic perhaps, I think would be suggestion a number of people could make, however again I would caution this choice as  as we have seen from a lot of the writings of the academics in the sector at the moment there seems to be, at least to my mind,  a bias towards public providers and I a not insubstantial amount of cases connections to either the education unions or the public VET sector.   I actually think that in order for this to be a fair, impartial review that whoever leads it needs to be from outside the sector, preferably with few, if any actual links to it.

Any kind of advisory panel associated with the review also has to be well-balanced and consist of both those from industry and the provider side of the picture,  BUT  please not just the big players.  I for one am sick and tired of seeing advisory panels in this sector stacked with managing directors or the like of very large providers, massive industry groups and worse union leaders or worse academics who have no idea of how the sector works as they have never actually worked in it.  Given that when we take the big players both public and private out of the picture the average provider has less that 750 students there is a massive disconnect if the only people who advise the government are the large providers. And the same goes for industry groups, there needs to be representation from those people at the coal face of employing graduates from the sector and to be honest I have really understood why the unions actually need to be at the table at all in these discussion but that may just be me.  Too often these kinds of reviews become rarefied academic affairs rather than something which produces an actual tangible and usable model for the future.

If Labor, or any other party is going to do this then they need to do it properly, they need to put aside their politics, ideology and sacred cows and undertake a review that looks impartially and transparently at what this sector needs going forward and if it doesn’t produce recommendations which match to what they would have desired they need to suck it up and actually do what is good for the country and sector.

 

Anyway that’s just my opinion.

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