Did we miss all the signs? A closer look at the recent Captain Cook College Federal Court judgement and the long shadow of for-profit training providers (Image: Australian Broadcasting Corporation)
By Anisha Pillarisetty | @nishkinsilk
In yet another case brought against a Registered Training Organisation (RTO) for engaging in misconduct, the Federal Court of Australia found on July 2 that Productivity Partners Ltd, operating under the pseudonym Captain Cook College, had profited at the expense of thousands of students.
The charges against the College, the chief executive officer Ian Cook, and the parent company Site Group International Limited (Site Group) were brought by the Australian Competition and Consumer Commission (ACCC) at the end of 2018.
According to the ACCC, the Court found that Site Group and its former chief operating officer Blake Wills were “knowingly concerned” in the College’s “unconscionable conduct”. This included signing up over 7000 people to courses online and across Sydney & Brisbane campuses that they would not be able to complete nor benefit from, along with removing withdrawal and enrolment safety clauses that had protected students from unnecessary debt.
The Federal Court also found that the College’s recruiters had signed up those with poor literacy, numeracy and computer skills, sometimes through forceful sales tactics, and misled students by saying that courses were free and by offering other incentives.
This allowed the College to claim $50 million from the Commonwealth under the now replaced Vocational Education and Training (VET) FEE-HELP scheme.
CEO Ian Cook reached a settlement with the ACCC last year, by admitting his involvement in the College’s misconduct.
ACCC Chair Rod Sims said the College used public money to exploit “vulnerable and disadvantaged” students by landing them with a huge VET FEE-HELP debt and nothing to show for it.
“Over 90 per cent of the affected consumers did not complete any part of their online course, and about 86 per cent of them never even logged into their course,” he said.
The three months after September 7, 2015, when the College removed the safety clauses, their student base increased five and a half times – from over a 1000 to over 7000 enrolments.
Just months before this, the Senate Education and Employment Committees, following a parliamentary inquiry, recommended that VET FEE-HELP be limited to “only providers with the highest reputation for quality”.
“The committee recommends that, given the evidence of rampant abuse, accelerating costs, and doubling of bad debt, the government launches an immediate review,” the report stated.
The VET FEE-HELP scheme was overhauled and replaced with VET Student Loans at the start of 2017 about two years after the inquiry was launched.
In response, the Australian Education Union (AEU) said the new VET model still lacked adequate checks for private providers and failed to support the public Technical and Further Education (TAFE) system.
The AEU also criticised the model for carrying on the previous VET FEE-HELP practice of reducing Government funding while increasing the financial burden on students.
The 2014 inquiry was far from the first red flag signalling a failing VET system.
In 2013, an Australian Skills Quality Authority (ASQA) report found that up to half of the RTOs were “potentially misleading” future students with their marketing, with some breaching the national standards for RTOs. The ASQA report recommended strengthening national training standards to better protect consumers.
The requirements for VET trainers and assessors were strengthened in 2016 and again in 2017-18. In its 2019-20 Regulatory Strategy, ASQA said its heightened measures acted to increase trust in and control the quality of the VET and international education sector.
In the same year, the AEU reported the Federal Government had withheld $1 billion dollars allocated to TAFE and training programs over a five-year period and there was no mention of TAFE in the 2019 Federal Budget.
In response to the 2014 Federal Budget’s move to extend Commonwealth Supported Places to private, Non-University Higher Education Providers (NUHEPs), the National Tertiary Education Union (NTEU) published a fact sheet detailing the adverse effects this decision would have on Australia’s public higher education system.
It said Victoria’s vocational education system, previously the domain of TAFE, had collapsed as a result of the State Government opening up the sector to private competitors in 2008. Despite mounting evidence indicating the failure of the market model, private providers became part of the VET system nationally over the next decade.
The Government recently extended Commonwealth Supported Places to NUHEPs, as part of the Job-ready Graduates Package, and allocated 5000 more short courses to the non-university sector.
Over the years, South Australia’s TAFE has also succumbed to competition and under-funding.
In November 2020, Steven Marshall indicated South Australia would be moving towards funding private providers instead of TAFE, despite the Australia Institute report released last year stating that a well-funded TAFE system is vital for the recovery of the Australian economy.
The report also showed that TAFE was far more effective than private VET providers in delivering career pathways for students.
National Union of Students (NUS) President Zoe Ranganathan said for-profit tertiary education treated students “only as consumers”.
“Captain Cook College has been exposed today as a small cog in the larger system of financially exploitative private education providers,” Ranganathan said.
Meanwhile, the Productivity Commission’s December 2020 report recommended opening up the VET market to private competitors.
The AEU Federal President Correna Haythorpe said the report privileged profit over educational outcomes.
“The Federal Government must ditch its failed VET marketisation model. It has seen billions of dollars of funding stripped from TAFE and millions of dollars funnelled into the pockets of dodgy private training providers,” Haythorpe said.
The VET FEE-HELP Student Redress Measures, effective from January 1, 2019, offer a remedy for eligible students who incurred debts due to provider misconduct. If you think you were affected, the ACCC recommends contacting the VET Student Loans Ombudsman. If your claims are confirmed, you may have the relevant VET FEE-HELP debts cancelled.
Since 2016, $2.8 billion in VET FEE-HELP has been re-credited to more than 150,000 students, mostly through the Redress Measures.
The TAFE system, however, isn’t the only public higher education sector facing financial pressures. National Tertiary Education Union (NTEU) President Dr. Alison Barnes said the Federal Budget has forsaken university workers and students.
“While the private higher education providers will welcome the additional public funding, the Government is hanging university workers and Australia’s future out to dry,” Dr Barnes said.
“If this Government was serious about wanting to invest in skills, education, and training to tackle unemployment, it would invest more in higher education than just 5000 short course places [in NUHEPs].
“Instead, there’s a pittance in this Budget for higher education, from a Government which has abandoned Australian university workers and students.”
NUS Education Officer Chris Hall said Captain Cook College’s misconduct was a “blatant abuse of students”.
“Let this be a warning to the university and TAFE sectors to stop treating students as cash cows,” Hall said.
Ranganathan said student representation and democratic involvement is necessary to keep universities from falling prey to commercial interests.
“Universities need adequate government funding to make sure that they don’t need to pursue commercial avenues just to survive,” she said.
“Such funding should be tied to standards that ensure that universities must follow the interest of students, rather than being influenced by large corporations.”
University of South Australia Student Association (USASA) President Noah Beckman said a majority of universities were increasingly treating students as “consumers on a balance sheet”.
“This is particularly true for our international student cohort, often being treated as cash cows with no regard for their wellbeing,” Beckman said.
He said USASA has frequently pushed for the University of South Australia to take a “proactive approach” in program delivery.
“The University has more of a duty than just enrolling and passively providing services to students,” he said.
The University of Adelaide recently announced a massive deficit in its projected 2022 revenue which has prompted a merger of faculties and a cut to 130 full-time staff members.
This comes in the wake of a community petition against staff cuts at the University of Newcastle and redundancies at Macquarie University that will further cement their student to teacher ratio as the worst in the country.