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.

The Business of Vocational Education – Purpose

What is the purpose of Vocational Education?  For me this is a really important question because I think  our answer to this question will have some wide-reaching implications for how we might view the sector, and how we might be able to conceive of a business model which would be ethically and financially sustainable and meet the needs of the many and varied stakeholders within the sector.  If we look at a simple definition from the Australian government, Vocational Education and Training (VET) is designed to deliver workplace-specific skills and knowledge, and covers a wide range of careers and industries, including trade and office work, retail, hospitality and technology. While this is a solid definition, I tend to think that it does not go far enough, simply because it fails to mention the link between VET and employment or workforce participation.  Other definitions talk about it as preparing participants for work or for advancement, by providing with the skills and knowledge mentioned in the original definition and this is I think an important link in the VET chain.

It is an important link because if we consider VET as related to workforce participation (whatever that might mean in the long run) then that changes the dynamic and the purpose, at least to my mind.  If the outcome or the aim for someone undertaking a VET course is a greater level of workforce participation, rather than just to undertake study for the purpose of study, then what an ethical business model is going to look like is certainly going to change as well.  I say this because ones ability to participate in the workforce is not solely dependent on having a piece of paper which indicates that you should possess certain skills or knowledge.  I have over the years fired heaps of people who had pieces of paper that said they knew and could do certain things, but after a short period of time it became abundantly clear that they could not.  It is actually having the skills and knowledge which the paper you have says you have and being able to put them into practice which at least to some extent determines how long you will be able to participate in the workforce.  If we put the idea of producing competent graduates who can participate in the workforce at the center of our business model, then a lot of other structure around what that model might look like seems at least to me to be self-evident.

It is easy to see the first things to go in approaches such as this.  Models that preface provider growth on the strength of continuing streams of enrolments, or where the central concern is the issuance of certificates to generate payments are going to have a difficult time justifying themselves;  whereas models which consider the student experience and competence outcome as their central focus are going to be those that make the grade.  This should however be taken to suggest that a provider cannot be both student focused and profitable, the two are not mutually exclusive at all, nor should it preclude us from suggesting that the delivery of vocational education should not managed in as cost-effective way as possible.  It is simply a recognition that what we should always be seeking as an outcome is competent graduates, graduates who have the potential to participate in the workforce, even if for whatever reason they do not.

These concepts of competent graduates, workforce participation and cost effectiveness become even more important when publicly funded rather than personally funded vocational education is considered. It could be suggested that where someone is funding their own education, providing we meet the outcome of competency, the need for a workforce participation outcome seems not to be as strong.  It does need to be suggested here though that where the ‘personal’ funding’ is something like an income contingent loan scheme (such as VET FEE Help) I tend towards the suggestion that workforce participation and cost effectiveness or ROI come back into play, and all three need to be present.

So it seems to me that the purpose of being in this industry should be to provide high quality learning which leads to competent graduates with improved workforce participation potential in an efficient and cost-effective manner.  Now if we believe this it seems to give us very solid base from which we can develop an ethically and financially sustainable business model.

Anyway that’s just my opinion.



Where to from here? Some reflections.

Well hasn’t the sector been in the news again recently.  Minister Brimingham addressing the ACPET conference and talking about VET FEE help changes, the CEDA chief executive saying that VET has suffered significant reputational  damage, a suggestion that the VET sector is the weakling of the Australian educational system, the release of the apprenticeship reform report  and a number of other releases and statements has made it an interesting few weeks.  So given all of this I thought I would reflect on the last few weeks and ask myself the question where to from here. Interestingly as soon as I did the song “the only way is up” by Yazz jumped into my head, (And yes I did link to it for those to young to remember) because it feels a little bit to me like that is the only way we can go from here.

Now I know a few people were a little critical of my last post where I suggested that we perhaps look for the positive in all of this, but really when you look at the beating that the sector has taken over the last 12 months or so, it really does to me feel like we have bottomed out and are finally starting to move forward again.  While there are certainly issues with the sector, what I am finding now is that more and more people are talking about the underlying issues which have impacted the sector for a number of years now in a positive and solutions based manner; in particular the fact that the sector has been treated like a second class citizen when compared to the K-12 and university sectors in areas like funding, deep policy settings and the purpose of the sector itself.  Now sometimes I agree with what is being said and sometimes I don’t, but what is important in my book is that these issues are now actually coming to the surface and being talked about.

We are seeing the government move to fix the VET FEE help mess, which while as most of you know only really affected a small group of providers and clients, has caused the bulk of the reputational damage to the sector in the last couple of years.  The impact of such a small part of the system will, even with positive changes, haunt us for a while to come yet.  We are seeing changes though and more importantly we are seeing people called to account, either through legislative, market or other forces.  I agree with what Peter Noonan says around what he has suggested will be the changes to the program in his article in the conversation and while I disagree with some of the other points he makes (that might make an interesting discussion for another time) the need to come up with a workable system between the State and Federal governments is paramount.  This is particularly important because it needs to be remember that the National Partnership agreement ends in 2017.  It presents an opportunity for everyone involved to develop a comprehensive, robust system that addresses the reputational damage done to the sector as well as moving us out of the Middle child syndrome we seem to be stuck in.


Anyway that’s just my opinion.

Lets stop talking about VET and Higher ED and start talking tertiary education

For those of you that aren’t aware I have spent the last few days in Sydney at Akolade’s 2nd Annual Innovative Business Models for VET Forum.  It was a really interesting couple of days with a large number of highly experienced VET people in the room and presenting and it was chaired of course by yours truly.  One of the themes if you will that wound its way through the forum was the idea that VET is, well, often considered to be the poor cousin to going to university or what is traditionally spoke if as Higher Education.

There were a range of stories and anecdotes from many of the speakers and attendees relating to the idea that often in this country, and in other countries (Thanks Prof Mohan) that children and young adults who choose to undertake Vocational education are viewed in some respects as having failed or not achieved as much as they could have done.  Now interestingly while this view of children having failed if they undertake a VET course may not be the standard viewpoint in Australia, it is certainly the case, that the view that VET is the not quite so good second cousin to going to university is still very strong, in fact my very first post on this blog was a short piece which pointed out the academic snobbery that existed between Universities and RTOs.  There was also a lot of discussion at the forum about the fact that it is often better for a student to undertake a VET program and be successful than it is to try and struggle through university and either fail or get lower grades, as employment opportunities for someone with a VET qualification may be better, in a number of areas at least, than for someone with a a mediocre university transcript.

I think it was Norman Gray from the Box Hill institute (sorry if it was someone else) who made a point that really captured the essence of the sectors for me, he said (and I am paraphrasing a bit) VET is simply applied tertiary education and what is delivered in Universities is simply theoretic or research driven tertiary education, they are still both part of the tertiary sector.  It dawned on me at this point that this was one of the first times I had heard the post secondary education sector cashed out in a way that was simple and made solid sense.  Let’s think about it for a minute, when you leave secondary school and move into post secondary or tertiary education you are simply making a choice about whether you want to take a study path where the focus is on the application or a study path where the focus is on theory, it is all still tertiary education.   In fact when we look at definitions of tertiary education we see that in general all of the definitions agree that Tertiary education, also referred to as third stage, third level, and post-secondary education, is the educational level following the completion of a school providing a secondary education, for example universities as well as institutions that teach specific capacities of higher learning such as colleges, technical training institutes, community colleges, nursing schools, research laboratories, centers of excellence, and distance learning centers.

Now this should not be taken to mean that I think that RTOs (public or private) and Universities (public or private) should all just be lumped together, particularly in terms of how they are regulated and how they develop and provision the courses which they provide to the consumer nor that the distinction which Norman pointed out around applied vs theoretical knowledge is not an important one.  However if we talked about the post secondary sector as a single entity with simply two paths which could be chosen depending on the what learning experience and journey was important to the student, we may find some interesting things happening.  If viewed as a single sector, we might see a reduction in the number of Higher Ed students who drop out in the first year because it is simply not for them,  because rather than heading down the University track because it was expected, they chose a Vocational (applied) pathway from the start.  We might also see a raising of the profile of Vocational education as a legitimate choice for students and not just a poor cousin where people who couldn’t cut it for university go.

Anyway thats just my opinion

NCVER VET provider market structures – Dam what a boring title

First off NCVER could you come up with some sexier titles for your work please.  I mean VET provider market structures: history, growth and change is a very interesting read but the title doesn’t excite me to even open it, which is of course a shame given the volumes of interesting things contained inside it.

Enough of that though.  A little over a 18 month ago I wrote a  piece entitled “Who are these private RTOs anyway?” and the response to it enormous, in fact it became one of my most popular posts of 2015.  It simply sought to provide some perspective on the breadth of providers within the VET sector in this country and how it seemed a little unfair to simply lump all providers together into one basket, particularly when the vast majority of providers are small to medium size businesses and not nation spanning conglomerates.  Now NCVER has released a report on providers within the VET market and what these providers look like, and well isn’t it an interesting read.

Now I did have the pleasure of seeing some of this data earlier in the year during a presentation around it by NCVER, but I wanted to wait until the full paper was released before I made any commentary about the results.  So now it is all out and available lets have a look at what it says.

The first thing that is really striking in the research is that the VET provider market place has been fairly stable in terms of the number of providers over the last 15 years. While there was, as to be expected, back in around 1998 (when we first got our RTO status) an enormous amount of applications, much higher than at any point since, since that point applications and overall numbers have remained relatively constant.  What can we take from this?  I think we can pretty safely say that the number of providers we currently have in the market is probably the number of providers that the market can support.  While providers may come and go for various reasons having such a constant number over such a long period of time seems to suggest that the overall number of providers is appropriate.  What makes this really interesting is that over the 15 years the data covers there has been a myriad of changes to policy, funding arrangements, training packages, and well pretty much everything to do with the sector, however the number of providers within the sector has not changed substantially.  Providers have obviously come and gone and new providers have replaced old, but the overall number has really not altered at all.

A lot of the other information that is interesting is the research which pertains to the breadth and diversity of providers within the market place.  Firstly it needs to be said that this research makes no claims nor does it seek to make any about the levels of quality or outcomes across the various provider types, it simply looks at the number of providers and the students they service.

The really interesting thing for me was to see that around 2000 providers or 40% had less than 100 students and some had far far fewer students than this number, and on the flip side 50% of all students were enrolled with the largest 100 providers.  What we see from this is something that I have been suggesting for some time now, while there are a small number of very large providers, with large numbers of students (and can we please stop using the terms TOP which suggest they are the best and use the term LARGEST), that is not the norm, in fact about 50% of all students don’t do their study with a large institution be it public or private, they in fact choose one of the multitude of small to medium sized providers who operate in the market.  In fact when we look more closely at the data we find that 30 providers account for more than 1 million students (about 25% of the total number), however the next million students (25%) are services by more than double that number (70 providers).  The other 50% of students is looked after by around 4500 providers all of whom have less than 6000 students and in fact 4000 providers have less than 1000 students.

So what does all of this tell us.  Well while the research data released by NCVER doesn’t make any claims about what the data might be saying, I am going to.  To me what the data is telling us is that around half of all of the students involved in Vocational Education and Training are choosing to undertake their training with small to medium providers, most of whom are not public providers (TAFE) and the interesting question which comes out of that should be why.  In a lot of cases small to medium providers tend to play in niche markets or are strongly connected to organisations either as enterprise RTOs or in some other way, or have only a small number of qualifications on scope which represents the skill sets of the people involved in the business.  They also in a lot of cases provide a very different learner experience,  more personalised or tailored to the particular needs of the student and tend to provide a variety of ways in which students can study and interact with them outside of standardised classroom or online learning environments.  As with most parts of the Australian economy small to medium enterprises seem to be the foundation of the VET sector and the place that significant number of Australians want to get their education.

I think that when we look at the overall data in this report it becomes clear that those pundits who have suggested that there needs to be a rationalisation of the VET provider market place are simply wrong, well at least in my opinion.  The number of providers that we currently have seems, as I have said previously, to be the number of providers that the market wants and the diversity within those providers seems appropriate as well.  It is to me at least a recognition that not everyone learns in the same way or in the same environment or at the same pace and a lot of students realise that and look for providers that allow them  to engage in study in way they want to and in the programs that they want to enroll in.

Anyway that’s just my opinion.

New Governments and Vocational Education

Finally we have a result, well a result of sorts at least.  It is the case the the LNP has won the election and will probably be able to form government in their own right.  What then does this mean for the Vocational Education sector (VET) in this country, what can we hope for and more importantly what needs to happen.

Two things right of the bat here;  the coalition winning provides at least more certainty than there would have been should Labor won in its own right or in a worse case scenario had been forced to use The Greens or others to form government. To a large extent the sector knows the general thinking of the ‘new’ government in terms of the sector and this along with the relatively good relations that most of the players in the field have had with the government provides a level of certainty that simply would not have existed if there had been a change.  This should not be seen as a debate about the relative merits of various views, however, just that knowing a view is better than not knowing it.

The other thing, and this is something that I think is really important  Mr Turnbull;   could we please have a Minister for skills and training that hangs around for a while.  What we need in this sector is stability in terms of who is setting the rules and guiding the ship so to speak.  Both Senator Birmingham and Senator Ryan were both great advocates for and of the sector, (as was Minister Hartsuyker, who really was not in the ministry long enough for his impact to be judged) and I think the sector would be please to have either of them back.  However, whoever in the long run ends up with the portfolio please let them stay for a while, preferably for until the next election.

What then can we expect for the sector going forward.  I would be relatively confident that we would see things shaping up pretty much as we had before the election.  There has been a lot of work already done around the changes which need to be made to VET-FEE Help, how those changes might be implemented and what we can expect to see as a result. There is however,  another item which needs to be dealt with, has rarely been mentioned by anyone other that a couple of state training ministers, and needs to be dealt with both effectively and efficiently. That is the National Partnership Agreement.

Why is the National Partnership agreement on skills reform important, well it makes up a large part of where the funding comes from for the states to be able to pay for the funded training that they want/need to deliver  and also sets the scene for the delivery of that training.  Now there have been criticisms of the current agreement and how effective it was and what resulted from it, however these are discussions for another time and place.  What matters at this point is the federal government in conjunction with the states needs to reach a new agreement before the old one runs out, if for no other reason then to ensure that the various state governments are able to effectively fund their training sector for at the very minimum the 2017-18 financial year.  Now apart from the money of course, I think that there are five things I would like to see in any new agreement;

  1. A continuing and stronger commitment to both apprenticeships and traineeships
  2. A continuing commitment to income contingent loans, in what ever form they may take in the future
  3. A continuing commitment to a competitive market place, and
  4. An emphasis on quality of students outcomes
  5. Funding guarantee or entitlement arrangements particularly for those with no of limited qualifications

In the long run though the NPA is something for more important heads than mine to decide on so we shall just have to wait and see.

What about the elephant in the room; what can we expect to see around VFH.  I would expect that after all of the new government official thingys are all taken care of and all of the new ministers are in place we will quickly see some movement on this front.  One thing I expect to see happen is that all of the current contracts will be closed off, with perhaps a 12 month ‘teach out’ period attached to the contract to deal with students who have only recently enrolled.  The big question is will current VFH providers have to reapply for new contracts whatever those new contracts look like.  My personal opinion here is yes.  I think there will be a line drawn in the sand which will mark the movement from the old system to the a new system, if for no other reason then the political expedience of being able to say, ‘well that happened under the old system which wasn’t designed by us, look at our new system.”

With respect to any new system I think there are two things that probably shouldn’t to happen.  Firstly I don’t think it should be possible for any RTO to become registered and then simply apply for VFH.  Actually I think this applies to all government funding regardless of source, but that also is another discussion.  Secondly this concept of having delivered a diploma for a period of 5 years needs to go.  My general thinking around this is that an RTO needs to have been reregistered at least once or show quality in some other observable way.  The provider also needs to have a suitable risk rating from ASQA, solid financials and a history of acceptable student outcomes.  If these things don’t exist then they should simply not be given access.  The same should go with removal of access, there needs to be a simple but robust process through which the government can suspend payments or cancel the contract where they consider the provider to have breached the rules.  The department also needs robust reporting and contract management protocols in place so that things such as the rapid growth driven almost entirely by brokerages cannot happen again.

So there are a few things that any new minister into this portfolio will need to look at, and look at fairly quickly, but as I said at the start as we are not seeing a change in government, a lot of the hard work that has been done can be used as a basis for moving forward, so rather than there being a an issue of babies and bathwater which often happens in this sector when there is a change of government we will hopefully see some stability and focus around the sector.

Anyway, that’s just my opinion.

A mission statement for Vocational Education and Training

Those of you who were at the recent VET Leaders congress at Edutech 2016, may have heard a forum discussion, that I was part of,  about the future of VET in Australia.  During the conversations I suggested that one of the things that we clearly need in the VET sector in this country is a clear vision, or a mission statement if you will.  There was some discussion about the problems of achieving something like this at a government, strategic level and that any kind of statement which was created at this level would be compromised to some extent by the agendas of various stakeholders.  Now while I understand this concern and have seen it happen at all levels of not just government, but private enterprise as well, I tend to think that it may miss the point of what I was suggesting and almost throw the baby out with the bathwater so to speak.  So what was it that I was driving at when I suggested we need to have a vision for VET?

When I looked around the various websites and documents about the sector from government departments and the like, I could see a lot of talk about what VET was and how it was delivered, but very little that was inspiring, very little that would make me want to become involved in the sector, whether as a student, a provider or an employer.  It was all very boring and perfunctory and well, to be honest just a bit disappointing.  There were also lots of statements about data and regulation and quality, but again it was all written in such boring and uninteresting ways that no one could actually get excited about it.

I wrote late last year about the problems of the VET brand in Australia and that as a sector we needed to do something about it and that actually having an overarching brand for the sector would make a significant difference.  The general public, students, their families, even their employers are not terribly interested in figures and data and papers written about completion rates and how the VET sector helps disadvantaged people to improve their chances of workforce participation.  I mean even I got bored writing that sentence, now imagine how someone feels who is trying to find somewhere to study aged care or plumbing, or any other VET course, or trying to decide whether to go to Uni or and RTO, feels when they read that.  I have got a word for you – uninspired. People want to be inspired to take action, they want to feel that the decision they are making is the right one, they want to feel reassured and unfortunately data and boring statements about what VET is doesn’t do that.

Now to be fair, I know that a lot of  providers both public and private do a tremendous amount of work on their brand and their vision and position themselves wonderfully within the sector.  I know that we spend a lot of time thinking about our position and brand, and what it says about us and what we do. However I can’t help but think that if we had an overarching mission statement, a vision for the sector from which we and other providers could hang our particular brand, our way of living up to that vision then the sector as a whole might be a better place.

The vast majority of providers, be they public or non-public, do a fantastic job of providing outstanding outcomes for students and lets face it, this sector changes peoples lives.  There is absolutely no doubt about that what so ever.  We are however as a sector absolutely terrible at telling people this, in motivating, inspiring and meaningful ways.  We as a sector need to have a single cohesive vision of our purpose and goals.  We need to make this explicit and we need to spread it far and wide.  We need to make the value of vocational education and training part of this countries psyche and ensure that it is valued for the amazing contributions that it makes no matter who delivers it.

So here is the challenge for you all.  What should a mission statement or a vision for VET in Australia contain, what is it about this sector that will inspire and motivate not just those of use within the sector, but everyone else as well?


Elections, policies, promises and Vocational education

Just in case any of you failed to notice, we are at the beginning of the longest election campaign since the 1960’s and I was hoping that at this point we might have heard some real announcements or policy positions from the opposition parties at the very least around the sector given its high media profile recently.  However about from some rhetoric and banner waving about Saving TAFE (whatever that actually means) we really haven’t seen too much.  The Greens, it seems, still want to decimate the sector by creating an almost complete TAFE monopoly, where only things that can’t be delivered by TAFE could be delivered by Non-TAFE providers, so their policy position hasn’t changed much since the last election.  Labor want a review of the sector, which I am not against, providing as I have said elsewhere it is a fair and reasonable review and not one driven by ideology, which I am not sure we will see when the call for a review is accompanied by rhetoric about the unique position of TAFE.  The Liberals clearly have a contestable market driven policy but ultimately what that will actually look like going forward with the National Partnership Agreement up for renewal next year and the clean up that is happening in VET FEE HELP is at this point a bit of anyone’s guess.  So given I can’t actually discuss any details of any policy announcements I thought that I might look at what I thought a good VET policy might look like or at the very least what it might include.

So in no particular order I think that any policy on Vocational education should address;

  • The purpose and role of the sector and its importance to the overall economy and future of Australia
  • The roles that the various parts of the sector (public, private, not for profit and enterprise) play within the system and their strengths and weaknesses
  • The need for flexible, modern, and high quality learning solutions
  • The need for a sensible funding model, preferably one which is similar no matter what State you happen to be in
  • Student choice
  • The need for a strong, enforced national regulatory system
  • Strong links between training packages and industry practices
  • A recognition that vocational educators are not teachers, but industry professionals as well as educators, they are not just delivering curriculum, they are assessing competence.
  • The issues faced by regional and remote students and how those can be addressed
  • A system that is as inclusive as possible, and allows people with disadvantage and disability to access the system
  • The link between vocation education and employment outcomes
  • The link between vocations education, secondary education and university education
  • An improvement in data collection to provide deeper insights into the industry and its impact

There is probably a great deal more things that a good vocational education policy should do and lets not kid ourselves here the devil is always in the detail, but I tend to think that we could at least get these things sorted out we might well on our way to have a policy that might actually work and not be like trying to sand on a bottle cap, resting on quicksand with mines floating through it.

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.


Why 70% – TAFE and government funding

First things first.  I am a supporter of a properly funded, efficient and effective public provider system (TAFE) in Vocational Education and Training.  I have always said, as those of you who read my blog regularly will know that TAFE can and does do fantastic things and should be supported to do those things. So that being said let me move on to what I want to talk about today.

For about a week a now I have been trying to get an answer to what I thought would be a fairly simple question.  In fact when I first asked it on social media early last week, I expected to be inundated with responses telling me what the answer was and where to find the information that I sought.  Instead no one said anything, there was no response at all, which I found to be a little surprising.  So I took my question and I asked around a little more privately in case there was something I was missing, what I got was some vague references to the education unions and the AEU. So I thought I will ask the AEU then and I got no response.  So then yesterday, I thought surely someone on LinkedIn will know the answer so again I asked and again the best answer I got seemed to references to the AEU and there stop TAFE cuts campaign, but no actual answer to my question.

So what you may well ask was my question?  Is was simply;


Where did this figure of 70% of Government funding come from?  


To explain what I mean.  There has been quite a lot of publicity lately from the Education unions, some politicians and from people with the TAFE system about TAFE getting 70% of all government funding.  Now depending on the post or the article or speech you listen to the words around the 70% change, need, require, should get, even deserves have been words I have seen associated with it.  The guts of the argument appears to be that TAFE should get 70% of all government funding because it needs to have that much in order to provide the service it needs to provide.  Now if TAFE needs that sum of money, whatever that actual figure is (and I might touch on that later), to operate effectively and efficiently and provide Australians with a good return on money we put into it, then I am not averse to that.  So what may you ask is my problem?

My problem is I want to see the figures.  I simply want to know who came up with it and using what data.  Where are the figures, or the report or the research that sits behind this idea that TAFE should get 70% of government funding.  Now remember I am not saying it shouldn’t.  I am simply saying show me the figures.  I want to see the research.  Why do I want to know this?  Well a couple of reasons really, firstly I (as some of you might have noticed) like to troll through data and see what pops up.  Secondly given the amount of money (across all states and commonwealth) that we are talking about here, I want to know its right.  I want to know if someone figured out how much it cost to run all of the TAFEs in all of the states (I would love to know what that figure was too) and found out it was around 70% of the total VET budget for that year and went well that’s how much they need, or if they looked at unit costs and enrollments and additional services and infrastructure and maintenance costs and ran it through a formula and came up with a figure which turns out to be about 70% of government funding.

The other problem is this.  Surely any kind of formula or calculation would have come up with a dollar figure rather than a percentage figure.  So if it turns out that TAFE requires 70% of the current budget of government funding and a government then decides that it is going to add say $100 million to the amount of funding what should happen to that additional money.  Food for thought I think.

Here is the thing I want to know where this figure came from, so I am formally issuing a challenge to anyone one in any of the Unions, or Sharon Bird MP or Bill Shorten himself, The Greens, or who ever,  to tell me where this figure comes from.  Here is the deal as well, if this is just an ideological position, or a ‘well we can actually say we think we should have all of it because no one will wear that position,’ I don’t actually care.  I really just want someone to tell me what this figure is and what it actually means and I will take an answer from anyone about where this figure comes from.  However,  I am pretty sure that if none responds, and no one can show me where this 70% came from then that is an answer in and of itself.

Anyway that’s just my opinion.

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