Department of Education tightens requirements on vocational education and trainee programs

By Julian Hammond and Caroline Sakinofsky

A series of new Federal Government reforms have cracked down on onshore vocational education and training (VET) programs, making it more difficult for students to transfer from universities to colleges. The changes will affect VET providers by restricting the number of international students who wish to undertake additional study at the same time as the principal course for which they hold a student visa.

The reforms

The Department of Education has recently introduced measures to regulate VET Programs by:

1. removing the concurrent study functionality from the Provider Registration and International Student Management System (PRISMS);^[1]
2. implementing a ban on education agents receiving commissions for poaching students enrolled in universities;
3. amending the Education Services for Overseas Students Act 2000 (Cth) by strengthening the existing fit and proper provider test;
4. granting further regulatory functions to the Australian Skills Quality Authority (ASQA) to monitor VET providers, including the ability to make unannounced visits to VET colleges to monitor student attendance and accessing agent performance data such as student completion rates;
5. allocating $37.8 million to set up the Integrity Unit within the ASQA, to support the intelligence and compliance work of the ASQA and to prevent illegal behaviour and the exploitation of vulnerable students;
6. establishing a VET tip-off line with ASQA to provide a confidential avenue for students, staff and other potential whistleblowers to report non-compliance; and
7. placing requirements on VET providers to inform ASQA of significant changes to their operation, including the ownership and location of their programs.

These changes have come following the recent investigation into the rise of ‘ghost colleges’ in Melbourne’s CBD, whereby it has been alleged that registered VET courses are operating as a shopfront for international students to gain employment while holding a student visa.

In short, the investigation exposed a number of VET programs that encourage international university students to transfer from university to college on the basis that the college will award a degree without requiring student attendance or participation.

How will the reform affect VET providers?

Amending the fit and proper provider test

Under section 7A of the Act, an education provider must be fit and proper to be registered.  Currently the test requires consideration of whether the provider:

1. has been convicted of an offence;
2. has previously breached its registration or has been issued with an Immigration Minister’s suspension certificate;
3. is a bankrupt or has sought the relief of bankrupt or insolvent debtors; or
4. any other relevant matters.

The Federal Government has indicated it will amend the Act to tighten this test based on the outcome received from the report into the immigration and visa system by former Victorian police commissioner Christine Nixon.

It is likely that this amendment will strengthen the standards needed for providers to gain and hold registration, while also cracking down on cross-ownership of businesses between education providers and agents.

Removing concurrent study functionality

Before August 2023, an overseas student in Australia on a student visa was permitted to undertake additional study at the same time as the principal course for which they hold a student visa. These students could undertake additional study on the condition that they:

1. remain enrolled in a registered course;
2. achieve satisfactory course attendance; and
3. progress in their principal course of study.

This function has now been removed, which means that, in accordance with the National Code of Practice for Providers of Education and Training to Overseas Students 2018 (National Code), students cannot transfer to another education provider within the first six months of their primary course of study.

How can VET providers prepare for this reform?

At this stage, the further enforcement powers and resources provided to ASQA have not yet been published by the Department of Education.

However, VET providers should take steps to ensure they can effectively demonstrate that they are providing genuine and legitimate education programs to their students.

As a reminder, ASQA retains broad powers to manage non-compliance of VET providers and may:

1. conduct a compliance audit of VET providers to assess whether the organisation continues to comply with the National Vocational Education and Training Regulator Act 2011 (Cth);
2. assess training packages and take steps to ensure that training packages are of a high quality;
3. suspend or cancel registration where a VET provider does not comply with the National Vocational Education and Training Regulator Act; or
4. impose significant penalties against VET providers that are conducting business outside the scope of their registration or who are failing to uphold the required standards under the National Vocational Education and Training Regulator Act.

As the Federal Government turns its focus to cracking down on ‘ghost colleges’, it is imperative that education providers stay across the changing landscape of their legal obligations to ASQA.

If you would like to discuss how this impacts your organisation, please contact us.

[1] The Department of Education, ‘Concurrent Studies Update‘ (26 August 2023).