Private colleges will no longer be able to use brokers or cold-callers to try and recruit new students under a wide-ranging crackdown on dodgy operators to be announced by the Federal Government on Wednesday.

The vocational education and training sector – known as VET – has been plagued by unscrupulous educators who have taken advantage of successive governments’ loan schemes by luring prospective students with laptops, cash and other incentives.

Students have found themselves slugged with the cost of their course, sometimes without even realising they’d signed up.

Federal Education Minister, Simon Birmingham, will on Wednesday announce a range of measures aimed at stopping the rorts, including prohibiting providers from directly soliciting students.

TAFEs will be automatically eligible for the payment system. Photo: AAP

Tough new criteria

Providers will face tougher barriers to be eligible for the Federal Government loan scheme in the first place. They will need to prove they have a clean track record and high course completion rate, and that they have a good relationship with industry and employers.

And if they do the wrong thing, the new rules will make it easier for the Government to cancel their payments and revoke their approval.

As flagged by the ABC’s Hack programme in August, the Government will also introduce limits to the amount of money students can be loaned to undertake a particular course. The amount of the loan will be tiered – $5000, $10,000 or $15,000 – and will depend on the course itself.

Only courses that fill skills shortages will be eligible for loans, and the loan cap can be reviewed at any time.

TAFE courses to fulfil criteria, too

All private operators will need to apply to see if they’re eligible for the tougher loan scheme.

Dismal course completion rates alerted authorities to the problem. Photo: AAP

TAFEs and other publicly-funded providers will automatically be eligible for the payment system, but they will be subject to the new criteria – meaning students in some TAFE courses in industries where there are a glut of graduates could no longer be eligible for loans.

If you’re one of the 144,000 people undertaking a TAFE or VET course now – don’t panic yet.

Your loan is safe until the end of next year. But new loans will have to fulfil the tough new criteria from January.

“The Turnbull Government’s new VET Student Loans program will return integrity to the vocational education sector and deliver a win-win for students and taxpayers through a range of protections,” Simon Birmingham said in a written statement.

“We will close off new loans under VET FEE-HELP at the end of 2016, with the new program including course restrictions for providers, loan caps and student engagement requirements commencing from mid-2017.”

The changes are expected to net the Government $25 billion over the next decade.

Labor has released a plan to cap the loan on all courses to $8000 – a move it says will save $6 billion over ten years.

– ABC