The system seems to punish those who seek vocational training

BARRIERS to vocational education are becomming a serious problem for Queensland and Shannon Fentiman is pushing for overdue reform.

QUEENSLAND is crying out for more mechanics, electrical engineers, child care workers, onshore gas drillers, plumbers, bakers and furniture makers.

But perversely, it’s more affordable to study a Bachelor of Arts in Ancient Greek and Latin than skill up for the state’s most needed jobs.

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Those in the sector say the way the Commonwealth works its vocational education and training (VET) student loans is threatening the future of the sector as fewer students choose a trade and trainers, especially TAFEs, struggle to deliver courses around budget constraints.

It’s an argument being taken up by Queensland’s Skills Minister Shannon Fentiman, who is currently rallying her interstate colleagues to push for reforms to VSL loans.

At the moment, there are four loan rate caps offered to students depending on what course they choose – $5000, $10,000, $15,000 and $75,000 for aviation.

On top of that, students pay a 20 per cent loan fee that's rolled into the debt and starts being repaid as soon as they earn $45,000 a year.

The way the Commonwealth works its vocational education and training (VET) student loans is threatening the future of the sector, writes Jess Marszalek

The VSL system was introduced to rightly guard against the rorting of the former VET FEE-HELP loans, but the structure is causing problems for two reasons.

Firstly, private trainers are cutting corners to make sure they can deliver courses without a massive upfront gap payment for the student and TAFE Queensland is struggling to be competitive.

It means some private qualifications aren’t worth the paper they’re printed on while TAFE Queensland is forecasting a cracking $38 million deficit next year.

The second problem is that the gap payment, 20 per cent fee and repayments that kick in at just $7600 above the minimum wage are discouraging students from careers with dire skills shortages now and ones forecast for incredible growth.

Queensland Minister for Employment and Small Business and Training and Skills Development Shannon Fentiman is currently rallying her interstate colleagues to push for reforms to VSL loans.

The Commonwealth’s own expert review into the sector this year found evidence loan fees are steering people away from trades and into university courses, “even when it does not suit them or their career aspirations”.

For example, a person taking a subsidised apprenticeship through TAFE Queensland in a Cert III in Light Vehicle Mechanical Technology – listed as a “critical priority” on the state’s skills list – will incur $1728 in fees and isn’t eligible for a VET loan.

A full fee-paying student doing a Diploma of Nursing – also listed as a priority skill – will be eligible for a VET student loan, but this is capped at $15,514 leaving up to $5000 in upfront costs and a 20 per cent loan loading charged by the Commonwealth.

For a full fee-paying Diploma of Crime and Justice Studies student at TAFE there is no loan available and the upfront fee is $7650, despite that too being listed as a priority skill.

On the other hand, a student studying a Bachelor of Arts at the University of Queensland can defer the entire $72,000 in course costs with a HECS loan with no loan fee.

And that’s the case even if they’re majoring in classical languages, English literature, gender studies or something else entirely useless to the future of the state’s economy.

A student studying a Bachelor of Arts at the University of Queensland can defer the entire $72,000 in course costs with a HECS loan with no loan fee.

For a lot of people, a couple of thousand dollars for a course might not seem much.

But if you’re a young person from a disadvantaged family, a single parent, unemployed, or just someone struggling between pay checks looking to turn things around, it is.

If you’re upskilling on the job, the bump you get in your pay from doing the course might be immediately eaten up by loan repayments automatically sucked out of your wage.

In the aftermath of the introduction of the VSL, TAFE Queensland took a $18.6 million hit as fewer people took out loans to study.

In fact, the Commonwealth budgets for $2 billion in loans every year, but signed off on just $277 million of them in 2018.

And all this is happening in a multi-career era where entire industries are dying and evolving in a matter of years and VET courses are run in nine of the 10 occupations where the greatest future growth is predicted.

At the same time, young people (and their parents) are snubbing trades despite many VET graduates actually out-earning Bachelor degree graduates and enjoying better job prospects.

The median full-time income for a VET graduate is $56,000 compared to $54,000 for someone with a Bachelor’s degree.

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Sixty-nine per cent of university graduates find full-time employment, while 78 per cent of VET graduates and 82 per cent of those who trained under an apprenticeship are employed after training.

But even as Ms Fentiman makes her case for change, federal Employment and Skills Minister Michaelia Cash has accused her of being a political stunt woman.

Interestingly, you don’t need any qualifications to work as a stunt performer. But you will need to do a first aid course, and you can go to TAFE for that.