The Australian Research Data Infrastructure Strategy

VETStudent Loans Courses and Loan Caps Review

Background

On 1 January 2017, the Government implemented the VET Student Loans (VSL) program, replacing the former VETFEE-HELP scheme.

VET Student Loans are income contingent loans provided by the Government to students to support them to undertake high quality training for skills that are aligned to workplace needs.

When implementing the new program in January 2017, the Government committed to an early review to ensure the VSL approved course list and loans cap methodology remains current and robust and continues to meet stated policy objectives.

Review

On 11 December 2017, the Government announced the outcome of the review. The review was undertaken to ensure the program is well placed to support the ongoing skills development needs of Australian workplaces.

Through wide consultation with stakeholders, the review considered:

• methodologies for determining eligible courses

• methodologies for determining loan caps

• appropriate processes to update the approved course list and loan caps.

The review included the release of a public discussion paper, receipt of over 300 written submissions, and extensive consultations. The review has resulted in no change to the methodology at this early stage of the program.

Overall, the feedback indicated that the program remains well targeted and has addressed a number of flaws that existed under the failed VETFEEHELP scheme. In addition, the capping of loans to $5,000, $10,000 or $15,000 has limited the excessive price gouging experienced under VETFEE-HELP.

Whilst there was no compelling evidence to warrant significant change to VSL program settings at this early stage of the program, the Government will continue to monitor its operation and explore the possibility for minor adjustments as more data becomes available.

Course list and loan caps

Courses that are approved for loans and the amount a student can borrow per course is set by the Government.

In setting limits on which courses are available for a VET Student Loan and the amount that can be borrowed, the Government is seeking to ensure that students are not incurring an inflated level of debt and that loans are only being provided for courses that are closely aligned to the skills Australian employers require, thereby enhancing the opportunities for graduates to work and repay the money lent to them by taxpayers.

Where course price exceeds the applicable loan cap

Establishing loan caps does not prevent approved VET Student Loans providers from setting tuition fees above the cap. Rather, it sets a ceiling on the maximum loan amount the Government is willing to lend to students for a specific course.

If a student wishes to undertake an approved course with an approved VET Student Loans provider that is charging above the allocated loan cap, the student will need to cover the difference.

Course list and loan cap updates

From 1 January 2018, loan cap amounts will be indexed as provided for by the VET Student Loans Act 2016 and according to the provisions set out in the VET Student Loans (Courses and Loan Caps) Determination 2016 (the Determination).

The Determination will be refreshed in early 2018 consistent with the ongoing methodology, that is, courses must be current, and on at least two state or territory skills lists, or are science, technology, engineering or mathematics related, or are tied to a licenced occupation requirement.

Students who commenced studies and had loans approved prior to the update will continue to access the loan to complete their course of study.

Have the loan caps changed?

The capping of loans to $5,000, $10,000 or $15,000 has limited the excessive price gouging experienced under VET FEE-HELP. From 1 January 2018, loan cap amounts will be indexed as provided for by the VET Student Loans Act 2016 and according to the provisions set out in the Determination.

How often will the course list and loan caps be refreshed?

The Determination will be refreshed twice yearly from 2018.

Students who commenced studies and have loans approved prior to any updates will continue to access the loan to complete their course of study.

Why has there been such little change?

The review found that the current list of courses sufficiently targets the VSL program to areas of study where there are strong employment outcomes for students, identified skill shortages and emerging industry demand.

The capping of loans to $5,000, $10,000 or $15,000 has limited the excessive price gouging experienced under the VET FEE-HELP scheme. There was no compelling evidence to warrant change to the loan cap amounts at this early stage of the program.

For more information

If you cannot find the answer to your question in this document, in the Frequently Asked Questions publication or on the Department’s website, you are encouraged to use the Department’s dedicated VET Student Loans online enquiry form at www.education.gov.au/vet-student-loans-students.

You can also call the Department’s Student Enquiry line on 1800 020 108.

Please note: The information in this factsheet refers to VET Student Loans. Should you be impacted by provider closure and require further information on tuition assurance for VET Student Loans, please refer to the relevant tuition assurance operator or the tuition assurance information available on the Department’s website at www.education.gov.au/vet-student-loans.

Last updated: 11 December 2017