Have you heard about the federal government’s changes to student loans? The new VET Student Loans system was introduced on January 1st this year. It will affect more than 5% of all currently enrolled students and those considering studying this year and future study.
If you’re currently studying through an approved VET provider or thinking about enrolling at Kangan Institute, it’s important to understand the changes to VET student loans. With the former VET FEE-HELP scheme reformed, your studies may be impacted.
The program incorporates a range of new measures to protect students and taxpayers. It also addresses key skill gaps faced in Australia right now. The new, sustainable and student-focused VET Student Loans scheme will help you to get the right skills and education.
Tougher barriers to entry for providers, carefully considered loan caps on a range of TAFE courses and strict eligibility criteria aligned with industry needs will help you to find a career that can combine your passions with long-term job prospects.
So, how will these latest reforms affect you?
1. A Limit on VET Student Loans Eligible Courses
Around 7,000 students enrolled in VET FEE-HELP courses in Australia will be affected by the VET Student Loans course eligibility criteria, with close to 478 of the current 800 VET FEE-HELP courses excluded from the program.
TAFE courses that are affected include musical theatre, journalism and more. Courses that are subsidised are diplomas and advanced diplomas which are on the National Skills Needs List. This is calculated based on current and forecasted industry needs within Australia.
Course eligibility is also determined by the analysis of employer, state and territory, and Commonwealth data. While the number of eligible courses is now more limited, this will help you to enrol in a course that will provide good employment once completed.
2. New Loan Caps and a Review System
There are now three bands of loan caps. These are $5,000, $10,000 and $15,000 for a range of diplomas and advanced diplomas. The caps are determined by the delivery cost of the course and are a critical reform to ensure that you aren’t subjected to overpricing.
On the eligible list, the loan for a Diploma of Nursing is now capped at $10,000 and requires providers to ensure that they have special equipment, such as a hospital bed, for students to practice in-demand skills to start a career in nursing.
Cap rates will be reviewed to make sure that student debt is effectively managed, and within the first 12 months, reviews can be made at any time. After this first year, a compulsory review system will be instated to ensure that the VET Student Loans program works as intended.
This will include a requirement for students to log in and engage with the VET Student Loans portal. This is to make sure that you are still active and legitimately enrolled, protecting the reputation and quality of the vocational education system.
3. A New Application Process for Providers
The newly reformed scheme features a new application process for providers who want to access VET Student Loans. This introduction features a much higher bar to entry to ensure the choice of respected, trustworthy and high-quality providers.
This is achieved by assessing their relationship with the wider industry, student completion rates, the employment outcomes of each course and the track record of the education institute.
New changes to student loans ideally provide the financial basis for tuition, not returns for providers as profit. This is to ensure that you can enrol in a range of TAFE courses which offer quality education and training.
The VET Student Loans system is also focused on the successful completion of study, working to make sure that providers are accountable for drop out rates and support you as you study.
4. Tougher Compliance Conditions
With strengthened legislative, compliance and payment conditions now introduced for providers, the new federal government scheme will protect the security and integrity of students and taxpayers.
These conditions include paying providers in arrears, the ability to cap provider loan amounts and student numbers, and to limit course scope. It also affords the power to suspend poor performing providers from the scheme - an important step in reform.
The ability to cancel their payment or revoke approval will continue to lift the quality-driven reputation of the vocational education sector.
Prohibit the Use of Brokers
As part of the new VET FEE loan system, approved providers will be prohibited from using brokers or directly soliciting prospective students. This will also limit their ability to subcontract training.
For further information about changes to student loans and the VET Student Loans program, visit the VET Student Loans website.
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