Following on from the VET FEE Help program, the Commonwealth created VET Student loans scheme. The Commonwealth Auditor General has looked at its design and implementation. Here are the conclusions, but there are issues.

The scheme

The VET Student Loans (VSL) program replaced the much rorted VET FEE-HELP (VFH) scheme, which was reported on by the Auditor General’s Office in 2016. The new program was formally endorsed by the Australian Government in late 2016 and began operations on the 1st of January 2017. Like VFH, it is administered by the Commonwealth Department of Education and Training (DET). The Auditor General reports that around 42,000 students accessed a VSL loan in 2017 and nearly 43,300 did so in the first half of 2018. Nearly 390 approved courses are on the eligible course list and 180 Registered Training Organisations have been approved to provide training under the program. Readers can access details about the VSL scheme here, and download a copy of the Auditor General’s review of VSL here.

One of the key features of the new scheme was to set three maximum fee levels for particular programs, capping at around $15,000.

The Auditor General’s verdict

They concluded that:

“The Department of Education and Training’s design and implementation of the VET Student Loans program was largely effective.”

They also reported that: “the department executed an appropriate design process that considered the impacts of the new program on key stakeholders and was informed by lessons learnt from the former VFH scheme and consultation with stakeholders.” In addition:

“the department’s arrangements to support the implementation and management of the program are largely sound as it has established appropriate oversight, performance management and risk management. The department’s approach to compliance is risk-based but could be improved by detailing, in the compliance strategy, how the activities are prioritised and resourced on a risk basis.”

In implementing the program, the Auditor General suggests that the department has established appropriate arrangements to manage the program, coupled with an effective performance management system. This includes establishing and maintaining an appropriate risk management framework and developing “an evaluation strategy and has completed a number of reviews of aspects of the program.” This is coupled with “a largely effective communications and stakeholder engagement strategies for the VSL program.”

The commentary

Nevertheless, some concerns about the new program have been raised, in particular – and most recently – in a media release by TAFE Directors Australia. In it, they highlighted the low level of take up of these relatively high-level qualifications. Indeed, the Auditor General reported that that only eight per cent of the available $4.1 billion in loans over two years has been taken up.

Thus, in trying to cure the ills of the earlier VFH scheme TDA suggests that “as is often the case within government, replacement schemes can swing too far the other way.” Thus, while trying to control rorting another outcome that TDA foresees may be “that businesses will soon feel the pinch when skilled workers are in short supply.”

This scheme, like its predecessor, aims to provide access to skills needed by the community and in industry, and to do so by deferring the cost of training students might otherwise face. The Auditor General makes two recommendations, both of which are agreed by the Department. The first recommends that the Department “analyse maturing VET Student Loan program data to enable it to monitor progress of the program, analyse its impact on stakeholders and identify potential enhancements to the program and its administration.” The second is that it “develop key performance indicator(s) to measure the contribution of the VSL program to promoting confidence in the regulated VET market.”