Tuition fee protection for TAFE, private college students

The scheme gives domestic students the same protection as international students if their education provider shuts down.

Private colleges and TAFEs have welcomed the federal government’s decision to extend tuition fee protection to students who have government loans but are not studying in universities.

The new Tuition Protection Scheme, announced last week by Assistant Minister for Vocational Education and Skills Karen Andrews, will give many domestic students the same protection that international students have if their education provider shuts down and cannot complete a course a student has enrolled in and possibly paid for.

“I think it’s a big step toward protecting students and maintaining a fair and reasonable approach toward security for students,” said Bruce Callaghan, chairman of the Australian Council for Private Education and Training, which represents private colleges.

“It will remove uncertainty from the whole sector.”

The government announcement said students with VET Student Loans or FEE-HELP loans provided by the government will not owe a loan debt for study they have paid for but were unable to complete because the education provider closed down.

As well as giving more security to students in private vocational colleges, this will also help students doing higher education courses in non-university institutions who have FEE-HELP loans from the government.

The new protection scheme, which will start on January 1, 2019, will give students more confidence in private tertiary education providers, whose reputation was battered by the VET FEE-HELP scandal in which a few private colleges rorted the system and left students owing over $1 billion in debt for courses either never completed, or of little value to the student. Mr Callaghan said it would help ­ensure a level playing field for public and private providers.

To fund the new scheme, private colleges will be required to pay an administrative levy, a risk levy and a surcharge, while TAFE colleges will have to pay just the administrative levy.

If an education provider fails, students will be assisted to find another provider to complete their course without being required to pay more or increase their loan.

Other colleges or TAFEs will be offered an incentive to take on the students of failed education providers. If a similar course is not available then students will be ­eligible to have their loan debt forgiven.

Even though TAFE colleges, as public sector institutions, don’t have the same confidence issue as private providers, they also welcomed Ms Andrews’s announcement.

TAFE Directors Australia chief executive Craig Robinson said Ms Andrews should be congratulated for the new scheme.

The Tuition Protection Scheme replaces two similar schemes — one run by TAFE Directors Australia and the other by ACPET — which failed under the impact of the VET FEE-HELP scandal and were taken over by the government.

The scheme will be managed by a government-appointed ­director who will be advised by an independent advisory board.

It will also be advised by the Australian Government Actuary.