Careers Australia, one of the biggest vocational education providers in Australia has lost its students loan and has been placed into voluntary administration. About 1,000 staff members were stood off right after the decision without pay. The decision was communicated by way of the letter on Thursday night by Voluntary Administrators David McEvoy and Martin Ford of PPB Advisory. The letter was obtained by the ABC’s 7.30 program.
The letter read, “We do not currently have sufficient funds available to meet payroll and other costs which would allow us to continue trading the Group on a ‘business as usual’ basis. Accordingly, we hereby confirm you are stood down effective 25 May 2017 whilst we undertake an urgent assessment of the Group.”
Upon receiving the letter all the classes were cancelled and students were informed regarding this via a text message. Approximately 15,000 students have their classes cancelled as of now across 14 campuses.
The news came as a shock to students as once Careers Australia ranked the among the highest in taxpayer funding for expensive training courses. Things started to go bad after an investigation by 7.30 revealed that the education provider was targeting vulnerable students by offering free computers and other lucrative deals. The sales tactic was then banned by Federal Government after which the education provider had allegedly resorted to marketing means like telemarketing including cold calls, lucrative online competitions promising prizes like iPads. They also allegedly went for employment websites to obtain contact numbers.
Last month, Careers Australia was informed that its students will not be entitled to student education loans under the new VET Scheme replacing the VET FEE-HELP loan scheme. The decision was taken considering the financial position of the education provider and the poor student results. Now it has been confirmed. An Education Department spokeswoman said, “The original decision was Careers Australia did not meet three provider criteria: financial performance, management and governance and student outcomes.”
Though Careers Australia is one of the biggest education providers in Australia, in the year 2015 only 14 per cent of its enrolled students had completed their course. In the month of May, Careers Australia had to repay a sum of $50 million it had received under the VET FEE-HELP to Australian Competition and Consumer Commission. Further it had to forego a sum of $110 million that was yet to be received.
Affected students can contact:
Careers Australia’s Tuition Assurance provider TAFE Directors Australia- 02 9217 3180
Education Department- 1800 020 108.
