Australia needs qualified workers for future jobs but getting the right skills comes at a cost.

This submission to the Commonwealth Government's Discussion Paper: Redesigning VET FEE-HELP finds that poor design and oversight of VET FEE-HELP has led to students paying more for some VET qualifications. Enrolments in expensive full VET FEE-HELP qualifications have risen, while cheaper state funded enrolments have dropped for the same courses. 

Full fee VET FEE-HELP enrolments grew dramatically and at far greater cost to students and the Commonwealth than if growth had occurred through state subsidised courses.

The paper highlights some major issues with VET FEE-HELP:

  • Using VET FEE-HELP in a demand driven, competitive market underpins implementation problems. VET FEE-HELP was introduced to create equity between students studying equivalent programs in higher education and VET. 
  • VET FEE-HELP risks should have been identified, assessed and managed far earlier, including through urgent legislative amendments. 
  • there is no clear logic or rationale for how or why students, courses and providers are now funded on a different basis across three public funding categories for VET Diplomas and by different levels of government. This has led to a decline in publicly funded enrolments in Diploma courses and above. 
  • there is no consistency in funding of higher education Diplomas, Advanced Diplomas, Associate Degrees, Graduate Certificates and Graduate Diplomas.

We have previously proposed two broad options to redesign VET FEE-HELP:

  • the Commonwealth takes responsibility for public funding of VET and higher education Diplomas, Advanced Diplomas, Associate Degrees, Graduate Certificates and Graduate Diplomas through course subsidies and FEE HELP. This option was also identified in the Reform of the Federation Discussion Paper.
  • the Commonwealth refocus VET FEE-HELP on a broader range of publicly funded courses as part of a new shared funding agreement with the states, with a primary purpose of increasing participation in publicly funded VET. This system would see the states sharing risks and costs of VET FEE-HELP, as they do under current arrangements for publicly funded courses. 

This paper has been submitted to the Commonwealth Government's Discussion Paper:Redesigning VET FEE-HELP.


Peter Noonan
Emeritus Professor of Tertiary Education Policy, Mitchell Institute