Participation in VET Predicted to Drop to 1.4% by 2030

Projected participation
by Noonan and Pilcher (2018).

Participation in Vocational Education and Training (VET) in Australia is predicted to drop from the current 4.3% to 1.4% by 2030, while university participation is expected to remain at the current 4.9% of the population. This is in a recent study by Noonan and Pilcher (2018) from the Mitchell Institute at Victoria University.

The study has some limitations. One is that while noting postgraduate qualifications "are increasingly required for entry to many professions" they are not included in the study (Noonan & Pilcher, p. 4, 2018). A limitation not noted by the authors is that they have assumed other sub-degree qualifications (certificates, Diplomas and Advanced Diplomas) are only offered by the VET sector. I suggest there is likely to be increasing use of sub-degree university qualifications, as a way for government and students to stretch the education budget.

The study assumes that current government policies and practices are unchanged. This is unlikely as the current situation is unsustainable. The VET sector is in a state of near collapse, due to state and federal mismanagement. University budgets are being propped up by international student fees which could come to an end at any time.

Reference

P. Noonan and S. Pilcher, Participation in tertiary education in Australia: Modelling and scenario analysis,
Mitchell Institute, 2018. URL http://www.mitchellinstitute.org.au/wp-content/uploads/2018/04/Participation-in-tertiary-education-in-Australia.pdf

Put VET and University on Equal Footing Says Business Council

The Business Council of Australia (BCA) has released a 68 page proposal "Future-Proof: Protecting Australians Through Education and Skills" (October, 2017). This proposes putting the funding of Vocational Education and Training (VET) on an equal footing to university, to address the decline in the vocational sector. BCA point out that university programs attract more government funding and subsidized student loans than for VET. BCA suggest a "Lifelong Skills Account" for each student which can be used for  VET and HE programs, in place of existing loans and subsidies. Also information on jobs and salaries are suggested to help students select courses.

These proposals are worth consideration. However, untangling the current web of state and federal responsibilities for education is not going to be easy. Also the unintended consequences of policies that assume students act in their own long term interests and education providers act ethically, need to be considered. Richard Thaler recently won a Nobel Prize for work on behavioral economics. Perhaps some simple, quick, low risk, small scale "nudge" policies could help achieve reform.

Some simple reforms would be regulations and financial incentives for universities to provide credit to students for courses done at other universities and vocational institutions. At present university will offer such credit, but after the student enrolls, they find that the amount of credit they actually get is very implied. Another reform would be to encourage universities to offer nested qualifications, so a student who has to withdraw after years of study is left with nothing but a debt.

Vocational Education Agents Banned in Australia

The VET Student Loans Act 2016 makes illegal the use of broker or agents to arrange student enrollments as of 1 January 2017. This contrasts with the university sector, where the Australian government promotes the use of Education agents on its Study in Australia website and promotes the Education Agent Training Course (EATC) from International Education Services. Perhaps a similar regulatory approach is needed for the VET sector, rather than an outright ban on agents. I suggest the aim should be ensure that the same procedures are followed, regardless of if the student recruitment is undertaken by the institution's staff, or a contracted third party.

"49 Provider must not use broker or agent

(1) An approved course provider contravenes this subsection if the provider enters into an arrangement (whether written or not) that provides for another person to do one or more of the following in relation to an approved course:

(a) enrol students, or accept applications for enrolment, in the course;

(c) provide information or advice in relation to VET student loans (however described) for the course;

(d) assist students to complete or submit applications for a VET student loan for the course;

(e) assist, or provide support for, students who could be eligible for a VET student loan for the course to complete any assessments required to show that students are academically suited to undertake the course.

Civil penalty: 60 penalty units.

(2) Subsection (1) does not apply in relation to an arrangement that is:

(a) a contract of employment; or

(b) specified in the rules.

Note: Employees of approved course providers will be covered by other requirements that apply to approved course providers."

From: Section 49,  VET Student Loans Act 2016, An Act to provide for loans to students for vocational education and training, and for related purposes, Commonwealth of Australia

Extend Vocational Education Reforms to Australian Universities?

Reforms to the Australian Vocational education and Training  (VET) Student Loans program will come into effect on 1 January 2017. These will:

• "limit eligibility to courses to those that align with industry needs and have a high likelihood of leading to employment opportunities
• cap loans at $5,000, $10,000 and $15,000 to reflect the cost of delivery (with higher caps for courses with high delivery costs such as aviation)
• require students to regularly engage with the VET Student Loans online portal to ensure they are active and their enrolments are legitimate 
• set a much higher bar for providers to enter the program, with a new application process to assess providers’ relationships with industry, student completion rates, employment outcomes, and their track record as education institutions
• strengthen legislative, compliance and payment conditions, including increased powers to suspend poor performing providers from the program, cancel their payments and revoke their approval
• ban brokers, cold-calling, providers using third party lists to contact students, or incentive-based sales tactics
• limit the subcontracting of training to stop providers ‘selling access’ to higher-fee loans arrangements to training organisations that don’t meet the higher bar to qualify."

From "Stronger vocational education system delivered", Simon Birmingham, Minister for Education and Training, 1 December 2016

It will be interesting to see if the government brings in similar reforms for the university sector, which has its own loans scheme on which the failed VET scheme was based. While there is not the same level of misuse of the university scheme apparent, there is currently no requirement for university programs to align with industry need. If students were also required to undertake Higher Education in smaller increments (first a month long VET Cert IV, then a six month university Certificate, followed by university programs each of no more than two years) these measures would reduce cost and boost completion rates.

Proposed Reforms for Australian Higher Education

The Australian Parliamentary Library issued a Bills Digest, discussing the proposed changes to VET Student Loans (James Griffiths, 22 November 2016). The changes are to address a blow-out in costs in the Vocational Education and Training Sector. However, I suggest these measures will only be a stop-gap. Australia needs a policy which integrates VET and university sector.

One problem in the university sector is falling completion rates. A way to address this would be to use VET as a transition from school to higher education and as a way to support those who do not have sufficient, or recent, schooling. Currently Australian university have numerous ad-hoc programs to prepare students for university. These should be replaced with a coordinated national VET program.

Another way to address completion rates is with nested courses. Student loans could be limited to small qualification increments, so that students have to complete a vocationally useful qualification, before incurring more debt. Those with no prior HE qualification could be required to complete a six month certificate, before articulating to further studies. Students would then progress with qualifications which did not exceed two two years to complete full time. A typical path would be certificate, diploma or advanced diploma, bachelors degree, masters, and professional doctorate.

One element of VET which could be carried over to the university sector is planning for vocational outcomes. Currently universities can offer courses where there is not clear vocational outcome. An alternative would be to require universities to present evidence to show there are likely to be jobs for future graduates. Such predictions cannot be perfect, but some planning would be better than none at all. Universities and the VET would still be free to offer non-vocational programs, but these would not be eligible for student loan support.

Currently PHD programs are separately funded, for the purposes of advancing research. However, very few of the PHD graduates go on to a career in research. The current PHD funding could be reduced by 80% and the saving used for more direct research support. Students would instead have the option of a vocationally orientated professional doctorate, supported by a loan.

Victorian VET Funding Review

A Victorian VET Funding Review by Bruce Mackenzie and Neil Coulson, was released September 2015 (incorrectly dated February 2016 on the Victorian Government website). The report had as its first recommendation:

"1) That the Victorian Government work with the Commonwealth Government to consider the applicability of reforms to the fee-for-service and VET FEE-HELP markets."

However, a major failing of the report is that it diplomatically skirts around the way the flaws in the design of the Commonwealth's VET FEE-HELP scheme has distorted the VET market, wasted public money and damaged the reputation of Australian Higher Education.

The report recommends keeping additional funding for regional training:

"12) That the Government maintain a rural and regional loading to reflect the relatively higher costs involved in rural and regional training provision."

But the report fails to consider the value of on-line training to provide access for regional student, as well as those with work or family commitments, which prevent regular campus attendance.

The report proposes that the student contribution increase the higher the level of qualification:

"18) That the Government adopt the principle that the student contribution increase the higher the level of qualification."

It is not clear why the student contribution should increase with level of qualification. In fact there is no clear explanation in the report as to why VET courses should be subsidized for students who can afford to pay. There is a case for subsidizing courses where there is a shortage of skills and for students on low incomes.

The report recommends limiting Recognition of Prior Learning to 40%:

"36) That the Government limit RPL to no more than 40 per cent of the course volume."

This would have caused me problems, when I obtained 80% of a Certificate IV in Training and Assessment by RPL. I already had a Graduate Certificate in Higher Eduction and years of experience teaching at a university and an award from industry for course design. It would have been frustrating to sit in classes on something I could already do.