Free Training and the Value of Education

As everyone is no doubt aware by now in their latest budget the Victoria Labor Government has decided to spend $172 Million primarily to make 30 priority courses and 18 pre-apprenticeship programs free, if and only if you do them at a TAFE.  I have elsewhere expressed my view on this particular policy decision and won’t expand on that here, however the fact that we are already see articles on how to take advantage of this new initiative are concerning enough .  What I do want to discuss is the concept of value in educational programs and how that intersects with ideas such as completion rates, student contributions, choice, quality and monopoly behaviours.

Let’s take a look for a moment at the world of MOOCs (Massive online open courses), free courses, which anyone, anywhere can enrol in.  The completion rate is between 5 and 15% depending on whether you count simply finishing or completing assessments and receiving a certificate.  That’s a rate that makes even the approximately 40% completion rate for apprenticeships, we have in this country look good. One of the reasons for this that we can refer to these courses as ‘easy in, easy out’ as my good friend Ryan Tracey suggested. There is not real cost, or condition on entry and enrollment, and no cost or consequence for exiting or no completion.  Now of course there have been a plethora of other arguments made for why this is the case and MOOCs may not be a perfect mirror for vocational education.

What of university education then, where it could be argued there is still a fairly easy in, easy out scenario, depending on the course of study chosen and bearing in mind that there may be some debt consequences.  Again however there is not cost on actual admission to a course, tick a box on your admissions form and the ‘cost’ of our degree disappears into the nether world of FEE-Help. Yes you have to pay it back at some point, probably, however for the vast majority of students their accumulated HELP debt doesn’t even enter their minds until the tax department goes, hello were going to be taking your income tax return to pay for your loan.  On average,  approximately 30% of students fail to complete their university studies within six years of enrollment.

If we also bring into the frame the VET FEE-Help saga where we saw in some cases completion rates as low as 2%, the only reason brokers and the like were able to sign up such massive numbers of people and generate such huge sums of money was because there was no barrier to entry and in particular no cost component.  I am aware that this is a simplification, however imagine how different the VFH landscape would have been if there was a mandatory $100 sign up fee, paid by the student prior to their enrollment.

Now before anyone says it, I know that there are a lot of people out there who could afford to pay $100 on the spot to access an enrollment, that’s the point.  It is not to suggest that there should not be equality of access to education, an even playing field so to speak, something which I have argued for and supported in various roles and across a wide range of forums.  It is simply to suggest if there was a gateway condition which needed to be fulfilled prior to entry into a program, then some of the things which occurred may not have.  Enough of that though.

Successive Queensland governments have held the position that in all but specifically funded programs designed to engage with people with various disadvantages (Skilling Queenslanders for example) that all providers must charge a student contribution fee on all state government-funded training, whether it is User choice, Certificate III guarantee or something else.  Providers can choose what the level of contribution can be and it ranges from $50 to $1000+ depending on the course, the provider and the level of funding provided, but they must in all cases charge a fee and there must be evidence that, that fee was paid prior to commencement of the course.  This of course doesn’t suggest there are not a range of programs and other initiatives which are designed to assist people who are unable to afford even a smaller contribution fee, there are, however in all cases what this does, by either the person having to contribute themselves or meet secondary criteria is provide even a small gauge that the person has some level of commitment to the course of study they wish to undertake.

The other issue which comes up here is that of choice.  Should not students be able to choose whom they wish to study, to choose the provider who best suits their needs in terms of curriculum, modes of learning, content, units offered and quality of teacher staff and outcomes.   Surely that is not a lot to ask.  I can almost guarantee that the standard mode of delivery of the courses offered for free, will be the bog standard one of semester based, face to face classes, mostly daytime classes.  Which is of course the model which best suits, teachers and administrators rather than students, particularly those who are trying to support themselves as well as study.  But most of all why should students be starved of choice and forced to undertake their studies with particular providers, who may or may not be able, or willing to customise the qualification to suit the needs of the student and whose learning outcomes may not be as good as offerings from other providers who are not similarly funded.

We can have equitable access, an even playing field for people wishing to undertake high priority, skills shortage programs, without resorting to massively devaluing the outcomes of students and the hard work of stakeholders in the sector, it just requires we actually build a systematic non-agenda driven approach to how we fund these training programs.

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NCVER’s Government funded Student data; What does it tell us?

So for those of you who aren’t aware, NCVER released its government funded student data for 2016 recently and I think it has some interesting findings contained in it.  Firstly though what is the overall picture which the data presents us with. The big thing which should jump out of this data for anyone looking at this data is that 7.8% of the Australian population aged 15 to 64 years participated in the government-funded VET system in Australia in 2016.  That is about 1.3 million students, a 3.3% increase from the previous year.  This shows the enormous part that funded training plays in the VET landscape in Australia and the importance that it plays in allowing  people to undertake post secondary education.  Without this funding a significant amount of that 7.8% of the population would not have otherwise been able to access the training they needed to improve their workforce participation options.

Interestingly while there was an increase in students there was also a decrease in subject enrollments, primarily due to the fact that there was a significant (nearly 300%) increase in the number of people undertaking funded skill sets as opposed to full qualifications.  This points out a growing industry trend and one which must be acknowledge and properly dealt with by all of the various funding bodies involved in the sector, that of increasing demand for focused skill sets to meet the needs of an industry or a particular employer.  This is a trend which is on the rise rapidly not just in VET but across organisational learning and development and post secondary education in general.  Organisations and students are looking for short, focused courses containing a small number of units to fill skills and knowledge shortfalls and to be more competitive in rapidly changing markets.

Interestingly 52.2% of funded students, were enrolled in their study at TAFE or other government providers, with only 40.8% enrolled at what would generally be defined as private providers.  The balance of enrollments were through community education and other providers.  This represents an increase for TAFE in terms of students of 14.8%, with both private and community providers both dipping by around 7+%.  I find this interesting (and yes I know these are last years numbers and things can change) because there has been significant media coverage of the downturn in student numbers enrolled in TAFE’s.  What this seems to suggest, at least to me, is that if TAFE is clearly improving its position in the funded training market, then it must be losing substantially in the more competitive fee for service markets, including income contingent loans which as we all know are not Funded Training.  To be fair, the non-TAFE sector has for a long time (even before VFH) traditionally done better in the fee for service space for various reasons.  I will be interesting to see what the total VET activity data says this year, when we can get a picture of all enrollments to compare against the funded enrollment data.

Every demographic with the exclusion of 15-19 year old’s increased in terms of student numbers as did Females, indigenous people and people with disabilities, which is win as often these groups are the ones most in need of financial assistance in terms of their ability to undertake training.  The community services training package was the largest contributor to student numbers at 18.5%, which given the numbers of staff which will be needed in this sector in the coming years is probably a good thing.  The most popular fields of education though were engineering and education however information technology and natural and physical sciences had very significant drop offs at 14.6% and 16.4% respectively.

Overall the real impact of this report is that it shows that enormous value that funded training contributes to this country.

Anyway that’s just my opinion.

P.S.  As some of you know I will be moving on from my current role at the end of this week, to take on a more traditional, less VET centric organisation Learning and development role.  I will be still quite strongly connected to the sector, just in a different way than I currently am.  It is also probably the case that (and I can’t promise this) that I will take a break from posting for a couple of weeks as I get up and running in the new role.

 

Paul

Some VET Fact and Myths

Rod Camm wrote a really interesting piece for his ACPET National Monday Update this week, which really struck a chord with me, primarily because it is looking at the VET sector and trying to inject some facts into a discussion often held ransom to media outbursts and ideological positioning.  I thought therefore today I might look at the facts that Rod outlined and perhaps some others to see if we can’t get a little less biased view of our sector.

The first, and I think one of the most important facts pointed out, is that there is only about 2500 providers in the VET sector, actively delivering training, not the 4-5000 which is an often quoted number and the enrolments with these providers range from 1 student to over 100,000 students.  A lot has been made of high-flying corporate whiz kids, cashing in on the VET sector and making massive profits at the expense of everyone else The media, the various education unions and some politicians have had a field day promoting this view, often for their own ends.  The truth is however that private providers have average student enrolments of 819 with the median number being much lower at 204.  This is tiny in comparison to the 19,000 and 16,000 figures for TAFE.  The overwhelming majority of private providers are not huge corporate monsters, whose only goal is to make as much profit as they possible can; with just under 1000 private providers have less that 100 students, the vast majority are simply small providers, providing awesome outcomes to their students and the industries they serve.  I bet we will never see that little nugget from the news media or the deep left, who much prefer the sensationalism of corporate failures.  As I said in my piece early last year non-public providers are an incredibly diverse lot.

There is another myth that has been perpetrated upon this sector or more specifically upon the non-public side of the sector and that is that business and industry trusts and is more satisfied with the public provision of training than with the private sector.  You could wonder I  think, when you read the news media and the various commentaries and interviews around it as to why there was even a a need for a non-public VET sector given the love which is espoused for the public providers.  When we look at the data from NCVER however, we see a different picture; employers indicate 80.0% satisfaction with private providers, 83.6% with industry and professional associations and 66.1% with TAFE. 80% of employers are very satisfied with the training delivered by non-public providers.

Now please don’t think I am trying to badmouth or undermine TAFE here, I have always been, and will continue to be a strong supporter of a well-funded and healthy public provider system.  The public providers have a  tough job, constrained in ways the non-public side isn’t, funding, bureaucracy, student cohorts, and the needs and wants of governments, it is no wonder their satisfaction figures are lower. This doesn’t mean that they do not do as good a job as or produce outcomes equal to that of the non-public providers, it is just that when you are trying to keep so many, often competing stakeholders happy, you are never going to succeed in doing that.

On to some other stuff now, well some facts and figures, which Rod doesn’t mention, but which I think are worth commenting on, primarily costs, funding and VFH.  Now I have covered all of these points in other articles before, however I think that they are all worth mentioning again in this context.  The first is of course the issue of funding for TAFE, much has been made of the fact that TAFE needs to be better funded and interestingly in 2016 we saw a lot of people talking about the need for TAFE to receive at least 70% of the funding available for VET  This of course stopped quite quickly when it was pointed out that the public providers received around 80% of the public funding available in the sector already.  Now before you ask where this figure comes from, it comes from the actual budget papers of all of the state governments, who are the ones responsible for the funding of the TAFE sector.  The bigger question, which I asked last year and never got an answer for is where did that figure come from in the first place?

The other point is this idea that training delivered through a private providers is far more expensive that training delivered through the public provider, in one case it was claimed by The Greens, that private provision cost as much as 7 times the cost of public provision.  These claims are demonstrably incorrect as I explained in detail here.  These sorts of claims are based in general of really poor interpretation of information by people who have little or no knowledge of the sector itself.  They ignore facts such as, that under most of the entitlement funding models the subsidy if the same for all providers, so the amount of money being paid is the same no matter who delivers the training.  Even when we roll VET fee Help figures into the whole mixture of other funding and models that are out there, we see that at the very outside non-public provision across all courses at all levels the cost of delivery of a qualification through a non-public providers is about the same as it is through a public provider with both, when it all comes out in the wash costing around $45,000 per enrollment.  It is important to remember however that is figure is going to dropped substantially with the introduction of the VSL scheme in its entirety from June this year.  It will be interesting to see what happens to these figures and comparisons, when we get to look at them again at the end of the next financial year.

So why bring all of this up and talk through it?  As Rod suggested it is important that we know the industry that we are working in.  It is important that we know not just how to do the jobs that we do but the facts and figures which underpin that.  Why? Because if we don’t then we might be tempted to believe some of the  ill-informed, ideology fueled nonsense that comes to us through and is promoted by the media and other sources.  Whether it is delivered by a TAFE, and industry association, a not for profit, an enterprise RTO or a private company, Vocational education is important to this countries future and decisions about it and how we can make it better need to be based on fact not opinion.

Anyway that’s just my opinion.

 

QLD budget 2016 and the VET sector, some thoughts and snippets

Well it was QLD budget time yesterday and if we go to the main budget website we can see training and education right there on the front page highlights with ‘record funding for training and education of $12.9 billion.’  Now I have to admit that that sounds like an absolute wheelbarrow of money, but what is it that the VET sector is actually going to get out of that great big pot.  After digging through the budget papers, (for those of you who are interested, here are the more interesting of them  Budget strategy and outlook and service delivery statements) we see that not to much has changed and the QLD government as it has had a bit of a tradition of doing over quite a period of time has shown a good understanding of the sector and the needs of students and stakeholders.

So what are we seeing, firstly let’s look at the the funding arrangements;

  • User Choice Apprentice and Trainee Training Subsidy increase slightly from  $209 million to  $220 million
  • Certificate 3 Guarantee Tuition subsidy decrease from $152 million to $140 million
  • Higher Level Skills Tuition  Subsidy increase from  $54 million to $60 million

Now firstly you might thing hang on why is the certificate III guarantee going down.  It’s not, the reduction to $140 million is just a better indication of the demand for places under this program and with a $10 million boost to this to provide second chance funding to students who already hold a certificate III, there are not any real losses here for anyone. There is also the $60 million which forms part of the Skilling Queenslanders for work program, which while it is not directly part of the VET sector itself, does increase the number of students having access to training, which is always a good thing.

In addition there are some interesting little tidbits hidden away in the various parts of the budget as well that I think provide a bit of an insight into the sector, and are worth while looking considering;

  • The average annual dollar value of user choice subsidy per student is $2,532
  • The average subsidy value for Certificate III funding is $2,734, with the subsidy for each qualification ranging from $530 to $7,880
  • The average subsidy value for the Higher skills program is $4,281, with the subsidy for each qualification ranging from $2,130 to $11,060
  • The average total cost (to the government) per competency successfully completed is $525 (This figure is calculated by dividing the Training and Skills service area budget by the number of successful VET competencies (individual study units) directly funded by the department)
  • The average cost per competency successfully completed through TAFE is $776, with the 16-17 estimate being $799. (This figure is calculated from total expenses divided by the number of competencies successfully completed by students)

See I told you there were some interesting snippets of information did I not.  When we look at the information in the budget papers it seems to suggest that a unit of competency is about $275 more costly if delivered through TAFE than the average cost to the government of a funded unit.  Now we need to be careful with this information mainly because it may be the case that there are costs associated with non-public delivery (Student contribution fees, offsetting costs through fee for service training etc) that are simply not captured in this information and which may make the cost per unit very similar when calculated in.   What we can say however, from a purely economic and budgetary perspective, for the government, non-public provision of funded training is less expensive than public provision. Please remember though that that is from a completely economic standpoint and does not take into account, the high costs associated with regional and remote training, training for specialist populations, TAFEs high overheads (staff and facilities) and other considerations.

Importantly what I think we can take from this, is that non-public provision of funded training (at least in QLD) forms a vital part of the overall picture of the Vocational education and training sector and without the inclusion of non-public providers the costs associated with the delivery and assessment of VET in this state would rise.

So where does the VET sector stand in Queensland after the 2016 budget, in a pretty strong place I think.  When we roll in the Departments increased risk assessment strategies around PQS providers, a training ombudsman and Training Queensland, I think there is a very solid footing for the next few years to be positive.  The only hole on the horizon though is that the National Partnership Agreement runs out next year and no matter who gets into government federally this could in the long run result in wholesale changes, but that is 12 months away, we can worry about that later.

Anyway that’s my opinion.

 

Queensland’s VET Investment Plan – Moving forward 2016 and onwards

For those of you who are regular readers of this blog, you will know that for the most part I have been a supporter of the Queensland Governments VET investment plan both under the previous and current governments.  I also think it is necessary for me to indicate at this point that the organisation that I work for is a PQS under both VET investment and User Choice before I go any further however.  So with the end of the 2015-16 financial year approaching, yes it is almost the end of February folks, this means that the current plan is set for review.  I therefore thought that it might be a worthwhile time to have a look at the program and what possible changes might be useful and not useful in the next version of the plan.

My first thought is a simple one.  The PQS system, where providers are required to meet and adhere to additional guidelines and regulations in order to be able to access funding under VET investment is a great one.  Access to entitlement style funding, should have additional requirements attached to it, over and above simply being an ASQA registered provider.

My second thought is also a simple one.  Please don’t break something that is working.  I would appeal to the government not to follow the route of South Australia in thinking that portioning off a large amount of the available funding and earmarking it as TAFE only funding is a good idea.  We need to support TAFE and we need to have a vibrant and effective public provider, but cordoning off large portions of a funding program and making it TAFE exclusive is not the way to go.  Neither is I think putting in place quota systems, unless we are very very sure of the numbers of people we are going to need in particular areas over the coming years.  The system that we currently have is not broken, it is working and with a few modifications could be even more effective.  Throwing it out and trying to start over, or trying to massively overhaul the program is I think a recipe for disaster.

I guess what I am saying, is something that I have said before, I think Queensland has got there funding initiative pretty right, particularly if we look at the whole picture.

  • Skilling Queenslanders for Work – While only just starting up will really help to assist that segment of learners that are extremely disadvantaged, through programs supported by community services organisations.
  • User Choice –  Apprenticeships and Traineeships are important, in fact vital to business and industry and need to be continued to be funded
  • Certificate III Guarantee – This is a fantastic program which needs to be continued both for public and private providers, as with the SQFW program, this program really assists to get jobs and to change their circumstances.  Prioritised funding for those courses where there is high need and good employment outcomes continues to be the way to go and currently for the most part I think the government has the mix right.  The only tweak that could be made would be where a person has an extremely old qualification in a different field of education and wants to move into a new vocational area.  Being able to support this move for people who are not currently employed would make the program stronger.
  • Higher Skills – I am a fan of this program, the ability for people who are currently working and who only possess entry level qualifications to receive a subsidy to gain a higher level qualification or skill set is fantastic and has at least in our sector (community services) enabled significant numbers of people to improve their employment outcomes.
  • Funding for TAFE – TAFE needs to be funded, even if that funding is simply support to maintain their infrastructure and resources.  But keep it separate from the other funding and subsidy programs however, provide them with what they need to be strong and competitive, but also keep choice in the system.  Choice is actually vital to producing a vibrant public system.

On a side note with regards to the Certificate III and Higher Skills programs, having a mandatory student contribution is vital, however I would caution against setting what that contribution should be.

Therefore please @YvetteDAth and the Queensland Department of Education, lets keep what we have and keep it working.  Lets not go the way of some of the other states and throw the baby out with the bathwater.

Anyway that’s just my opinion.

Remove government funding and lets see who survives!

Over the years and again recently I have heard a number of people suggest that one way to deal with some of the issues around the VET sector would be to remove all government funding for a period of time (say 12 months) and see who survives.  The suggestion is that this would cull providers who are not financially sound, don’t have strong fee for services business and who are doing the wrong thing. The thinking is that if there are no incentives then there is no reason for profiteering enterprises to be in the market.

Now aside from the fact that there are a lot of people who are looking for employment, or improved employment opportunities who rely on various funding arrangements to achieve their educational goals (I am not going to talk about this explicitly here), there seems to be an underlying position in these statements.  A positions that is when people say remove funding they are actually saying remove funding from non-public providers.  However if we remove that underlying position and just ask the question, who would survive if all government funding to the VET sector was cut for all providers I think what we get is a much more interesting position.

So who would survive out of all the providers, both public and non-public, if all government funding was stopped for 12 months.  Lets look at the non-public side first.  Would the big boys survive, those top five providers who have who have massive enrollment figures up to 15-20,000 students?  Maybe they would, there certainly have the capital to be able to weather a storm of this nature, but would we seen campuses in every suburb and gigantic corporate offices?  I think not, I think the downsizing would be swift and severe and it would have to be.  These businesses survive and remain profitable only to a large extent on the constant flow of new students into the system.  I  suspect that we would see  carnage at the top end of VET town if something like this were ever to be enacted.

What about at the other end of town, the small providers, the mom and pop shops, the niche market players and in general the not for profit sector?  While I think there would be damage here I think the damage would be less.  A lot of these businesses already operate on successful fee for service models and while there student number might reduce, a lot would weather the storm. Another reason for this with this group I think, is that most of these providers have high levels of commitment to the sector and to student outcomes.  They’re not in the business for the money, they are in it because they want to be and they believe in it.

Where we would see the most carnage is in the middle tier.  In those businesses where there are lots of competing players, margins are small, cash flow is tight and even a bad month makes paying the bills look a little bit shaky.  Now I know no one out there wants to admit it but there are a lot of providers in the middle range who are in just these circumstances, where even a small change in the level of government funding for a qualification has profound effects on their business and staffing.  This is where we would see the biggest losses in terms of sheer numbers of providers, and therefore training and administration staff.

But what about the public sector?  Lets put aside arguments about public good, the need for strong TAFEs etc and just for a moment consider what would happen if government funding was removed across the board for all providers.  Even if we said that the various state government could still support TAFE through capital and infrastructure costs, but they had to generate all of their operating costs through fee for service models and received no direct or indirect funding for students.  They had to pay for things like staff wages, resources and general operating costs just from the money they could generate.  How many of the 57 public providers would be left?  Well I think there would be a lot vacant office and training space up for lease or sale at the end of the 12 months.  The vast majority of public providers would simply not survive.  The public sector providers would be decimated.

Of course let’s be honest here when people call for funding to be removed from the sector, that is not really what they are saying, what they are saying is lets remove funding from the non-public sector and give it all back to TAFE.  It is interesting though to think about what would happen if all funding was actually removed from everyone.

 

Anyway that’s just my opinion.

 

University vs VET Completions and VET FEE Help!

So I have been looking at a lot of the Government data on completion rates at Australian Universities, on the back of the release of the report on the likelihood of people finishing a government funded VET course.   For me looking at the two sets of data (even though to be fair there is certainly some apple v oranges issues) makes for some interesting reading.  Now it is often suggested that University completion rates are quite high (80-90%) but what is interesting is that that is based on a time frame of 9 years, or in some other cases it is the percentage of students who re-enrolled in the next year which is more of a retention rate than a completion rate, however when we look at the 4 year average it comes down to about 45%.

Now if we compare the completion rates of funded VET courses which sit at between 35 and 45%, with the four-year degree completion rates we see that while overall the VET sector is a little lower, when dealing with the under 25 years of age cohort we see quite similar completion rates.  It is only as the years roll on that we see the degree completion rates outstrip the VET completion rates.  Of course as we don’t have the Total VET activity data yet to look at are just looking at the government-funded portion this picture may change somewhat with different data.

The other issue of course is that VET programs don’t go for 4-9 years. They have a length of between 6-24 months in general (apart from apprenticeships), so it seems like it might be really trying to compare apples and oranges.  However what if we look at first year attrition rates at university and perhaps compare them to something like subject load pass rate, with both of these rates sitting at around 80+% they seem to be fairly similar.

So what is it that I am trying to say here.  Well I guess the first thing is that we need to be careful particularly when we are thinking about the implications of VET FEE-Help in trying to compare University and Vocational studies, which seems then to give us this issue if needing to find out what we think an acceptable completion rate for vocational courses, and in particular those with income contingent loans attached to them is.  The second thing is what is a good completion rate and how do we judge it.  As I said elsewhere I recently looked at our completion figures over the last 7 years and found that over that time we averaged a qualification completion rate of around 75%, this grew to about 93% when unit completer’s (those students who never intended to complete a full qualification, they simply wanted a skill set or single unit) were factored in.  Now I am the first to admit that figure is comparatively quite high and has quite a lot to do with a range of factors including student recruitment, enrollment numbers and cohort makeup, our scope and the structure of both our training and our organisation.  At the other end of the scale I am aware though of some VET FEE-Help only providers (in particular those who deliver a substantial proportions of online only training) who have completion rates which are close to or below 10%.  I also know of a  number of enterprise RTO’s who have completion rates of 98-99% primarily due to the way in which they handle enrollments.

What should we be aiming for then and what should be happy with in terms of completion rates for VFH courses.  Would we be happy if the completion rate sat at around 35% but we aimed to try to raise that to say 45%, which puts our target at around where funded training and 4 year completion rates for the University are?  Are we aiming to low there?  Or is it better to aim at that level rather than to aim at say 70% in the full knowledge that most of the providers in the market place whether public or private are simply never going to meet that mark.

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