A new vocational education and training student loan program is set to rein in dodgy private colleges across the nation.
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The new VET Student Loans program will be introduced next year, replacing the VET FEE-HELP scheme.
Federal Education Minister Simon Birmingham said the new program would “return integrity” to the VET sector and be a win-win for students and taxpayers.
The FEE-HELP scheme has blown out from costing $325 million in 2012 to $2.9 billion in 2015, he said.
The new program will include tougher entry barriers for providers, loan caps on courses, stronger course eligibility criteria and mandatory student engagement measures.
“Central amongst our new program is the need for providers to go through a rigorous application process and extensive monitoring and evaluation,” Mr Birmingham said.
The new scheme will see public providers and TAFEs granted automatic eligibility to offer VET Student Loans, however they will face the same new conditions on enrolment, enrolment numbers and loan caps.
The program is set to include three bands of loan caps at $5000, $10,000 and $15,000 which will be set for courses depending on their delivery costs with a compulsory review after the first 12 months.
The 144,000 Australian students already enrolled in VET FEE-HELP can opt to be to “grandfathered” through to the end of 2017, according to Mr Birmingham.
State Education Minister Jeremy Rockliff said the planned changes were positive news for Tasmania’s VET sector.
“We know TasTAFE takes its responsibilities as a public provider seriously, having always provided reputable and high quality training,” Mr Rockliff said.
“This change will protect the reputation of the entire VET sector which was unfairly tarnished through the past actions of a small number of unscrupulous providers.”
Australian Council for Private Education and Training chief executive Rod Camm said while he welcomed some of the reforms, he was concerned others would unfairly punish high quality providers.
“Many of the reforms announced will actually have an adverse impact on quality providers and innovation, reduce student choice and overly regulate an industry that has decades of high quality contestable delivery,” Mr Camm said.
