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and assessed,  having not been taught particular units or subjects, or that the material they have been taught is out of date.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.

 

 

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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.

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