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Student Loans Watchdog Created To Stop VET Fees Blowing Out

"Students were signed up for thousands of dollars in loans for courses they did not need or could never complete."

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The government will introduce a Vocational Education and Training (VET) student loans ombudsman as part of its sweeping crackdown on dodgy private colleges.

In a speech tabled in parliament on Thursday, assistant minister for vocational education and skills Karen Andrews said too many students have fallen victim to the "disastrous" VET-FEE HELP student loans scheme.

Between 2009 and 2015 the average course cost more than tripled from around $4,000 to $14,000, and the number of students accessing VET FEE-HELP jumped by 5,000% to 272,000.

"The value of loans landing as debts to students, and as Commonwealth borrowings, blew out from $26 million to $2.9 billion," she said.

To prevent a repeat of the exorbitant fee blowouts seen over the last seven years, the government intends to establish an independent student loans ombudsman tasked with monitoring private colleges and VET providers.

Andrews said the government was aiming to drive prices down in a sector that has seen incredible inflation in recent years. The ombudsman would ensure private colleges don't continue rorting hundreds of millions of dollars in taxpayer-funded loan payments by delivering substandard courses with poor completion rates and minimal job outcomes.

As part of the government's crackdown dodgy private colleges, which was announced last week, there will be three levels of loans caps available: $5,000, $10,000, and $15,000, depending on the delivery cost of the course.

Protections for students under the age of 18 have also been increased to include a two-day gap from an enrolment decision to an application for a loan.

Four hundred and seventy-eight courses have been defunded, including circus arts, butler service management, dental hygiene, police witness protection, and fitness coaching.

Greens senator Sarah Hanson-Young lobbied the government for the inclusion of a student fee ombudsman, and says it's an "important win" to protect vulnerable students from exploitation in the future.

“The rampant rorting of the VET system has been an extraordinary example of failed privatisation and, unfortunately, it’s the students who have suffered the consequences," she said.

“This sector desperately needs reform and that process won’t be complete until we see the end of public money handouts being given to private, for-profit education providers."

Alice Workman is a political reporter for BuzzFeed News and is based in Canberra.

Contact Alice Workman at alice.workman@buzzfeed.com.

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