NEWS.COM.AU: Business Diploma gold rush: Private colleges sign 10,000 students up to $90m worth of loans

Career College Central Summary:

AUSTRALIA: DOOR-TO-DOOR selling, cold calling and other aggressive marketing tactics helped two private colleges sign up more than 10,000 students to expensive taxpayer-funded Business Diplomas in 2013, many of which will never be completed.
Careers Australia Education Institute signed up 6,165 students to the popular course in 2013 — an extra 5,266 students from the year before — for a total of $51,227,115 worth in government loans.
That represented a 586 per cent increase in students on 2012.
At the same time, the Australian College of Training & Employment, trading as Evocca College, signed up 4,047 students for $39,127,500 worth of government loans. That represented an additional 1,858 students on the prior year, or a 118 per cent increase.
Only two other private colleges came close: Productivity Partners Pty Ltd, trading as Captain Cook Colleges, signed up 736 students for $6,064,000 worth of loans, while Study Group Australia Pty Ltd, trading as Taylors UniLink, signed up 330 students for $3,259,670 worth of loans.
The Business Diploma gold rush highlights just part of the bigger picture, with growing signs of a crackdown on the current sector arrangements which allow private colleges to make massive profits through state and federal government funding.
A Senate inquiry into the vocational education and training sector will table its first interim report today. The report is expected to raise concerns about the vast profits being made by private companies, with public hearings in coming months tipped to focus on the economics of allowing for-profit vocational training.
According to a University of Sydney study, some of Australia’s largest training companies have reported profit margins of more than 50 per cent.
Figures released by Assistant Training Minister Simon Birmingham last week revealed the government spent $1.615 billion in VET FEE-HELP loans last year for 189,000 students at 254 training providers, representing a blowout of $315 million.
Modelling by the Grattan Institute estimates 40 per cent of those loans will never be repaid, as many debtors’ salaries won’t reach the repayment threshold of $53,345, meaning taxpayers will foot the bill.
Education Department data shows only 26 per cent of the 30,595 students who enrolled in vocational education and training FEE-HELP courses in 2011 finished their course within three years, with just 7 per cent completing their online course.