A letter drafted by a group of private Vocational Education Training (VET) providing colleges says that one in five institutions could go bankrupt in 2024.
AFR reports that up to 200 vocational colleges of the 1000 vocational colleges registered to teach international students could be forced to close.
The letter claims that some colleges could “become distressed or in more severe cases collapse altogether” once the government measure comes into force.
“If such harsh measures are implemented with the sector without justifiable clause [sic], there will be a widespread provider collapses [sic] which may impact on thousands of students and the entire TPS (tuition protection scheme) and the potential financial impact on the Australian economy will ripple for quite some time to come.”
The letter adds:
“Providers are facing severe revenue shortfalls and unhealthy competition from the more unscrupulous providers in the market, thus making (the) entire sector unsustainable.”
This is in response to the Australian federal government’s proposed VET reforms to restore integrity to the system.
Earlier, Skills Minister Brendan O’Connor signaled that he will pursue more measures to rid the vocational education sector of corrupt providers.
Mr O’Connor said in a statement:
“Cracking down on dodgy VET operators and strengthening the integrity of the VET sector requires a national effort. I am working with States and Territories and the VET sector to examine further measures and tools to support the regulator ASQA to stamp out potentially unlawful activity.”
The federal government is planning to shut down a loophole used to bring international students as a back door to secure jobs in Australia that led to “ghost colleges.”
Further, a college will be suspended if visas are refused to at least 50 percent of students they have recruited.
In addition, the federal government’s proposed changes included requiring all prospective students to show they have at least $24,500 in savings.
Home Affairs Minister Clare O’Neil has also said that the measures were part of broader efforts to restore integrity to Australia’s international education and migration systems.
“Dodgy training providers have no place in VET, international education and our migration system. These measures support actions we are looking to take under the ESOS Act to issue suspension certificates to high-risk education providers.”
The reform needs legislative changes and will be in place next March 2024 at the earliest.
Phil Honeywood, chief executive of the International Education Association of Australia (IEAA), told AFR that colleges that offer questionable courses should be put under the most scrutiny.
“Such Mickey Mouse programs make a mockery of providers which are genuinely delivering training in skill shortage areas.”
The Australian Skills Quality Agency (ASQA) has been given some additional powers to increase scrutiny of suspect colleges and ban education agents from receiving commissions for poaching students from high-quality education institutions.
Federal government data shows the number of visa applications to study a vocational course was a record high of 136,000 in 2022-23.
The number of international student visa holders stands at 660,765 at the end of June 2023.
About 90 percent of visa applications refused to study a VET degree are from India, Bangladesh, and Nepal.
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