New legal advice shows Government can claw back VET FEE-HELP money

Consumer Action Law Centre today released new legal advice from an eminent Queen’s Counsel about the Federal Government’s ability to claw back VET FEE-HELP funding.  The advice is that the Government could compulsorily recover VET FEE-HELP money paid out to dodgy vocational education providers.

This release follows reports that the Federal Cabinet is currently considering how to reform the scandal-ridden VET FEE-HELP scheme.

The advice from the QC suggests that amendments could be made to the Higher Education Support Act 2003 requiring VET FEE-HELP providers to refund VET FEE-HELP payments received by them as a result of “unscrupulous conduct”. Student debts could be wiped at the same time.

Consumer Action sought the advice following the passage of 2015 reforms which included a provision suggesting that the Federal Government may be liable to pay compensation to VET providers in certain circumstances. [1] This provision raised concerns that the recovery of VET FEE-HELP payments would constitute the acquisition of property, requiring compensation on just terms pursuant to subsection 51(xxxi) of the Constitution.

Action by the Australian Competition and Consumer Commission (ACCC) has alleged systemic unscrupulous conduct by some colleges. The ACCC claims include breaches of the Australians Consumer Law (ACL) in the enrolment process; including providers making false or misleading representations and engaging in unconscionable conduct.

Under a remediation scheme, this unscrupulous conduct could be remediated without the need for lengthy and costly court action; recover much-needed funds for the Commonwealth, and wipe-away wrongly incurred VET FEE-HELP debts.

Quotes attributable to Gerard Brody, CEO Consumer Action Law Centre:

“The Government should establish a remediation scheme to claw back VET FEE-HELP money paid out to dodgy colleges for no return, no qualifications, and no jobs.”

“There could be tens of thousands of Australians, possibly more, carrying a VET FEE-HELP debt with nothing to show for it. They need the slate wiped clean so they can start again, and the dodgy colleges must pay back their ill-gotten gains to the Australian taxpayer.”


A copy of the advice can be downloaded here:

[1] Higher Education Support Amendment (VET FEE-HELP Reform) Bill 2015, inserting section 97A into the Higher Education Support Act 2003.

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