Supported by Labor and Liberal governments, the scheme granted up to $100,000 in taxpayer-funded loans for every person enrolled in a course. Loading This created a perverse incentive for some colleges and brokers to enroll as many “students” as they could, often offering free laptops and other incentives to vulnerable people to sign them up for courses they would likely never finish. But three years since the program was scrapped, numerous providers have avoided being fully held to account, while the cost to taxpayers keeps rising. The Sunday Age can reveal that since 2015, the government and the Australian Competition and Consumer Commission have spent a combined $8.5 million to pursue six court cases against private training colleges. The education department has spent another $3.7 million investigating about 45 providers suspected of rorting the system.

However, no investigation has yet resulted in fraud charges. Two legal battles – involving the Phoenix Institute and Captain Cook College – are ongoing. Meanwhile, a number of providers have been hit with more than $35 million worth of Federal Court-imposed penalties but some have gone into liquidation and avoided paying up. Among these was Empower Institute, the Sydney-based college that was given a $26.5 million fine – and ordered to repay $56 million to the Commonwealth – for using “unconscionable” tactics to enrol more than 4000 students between June 2014 and December 2014. Only 42 completed their course. Another was Acquire Learning, a broker that recruited students for VET FEE HELP providers and once had former AFL boss Andrew Demetriou on its advisory board. The group received a $4.5 million penalty in 2017, with the court likening its activities to an “unscrupulous fly-by-night operation.”

An ACCC spokesman said that while the consumer watchdog was not able to recover penalties from a company in liquidation, the sanctions nonetheless “demonstrate the serious nature of the conduct, and will deter other businesses from engaging in similar conduct." Loading And in at least one case, money has been recouped: Unique International College was fined $4.16 million for exploiting six people, one of whom was an Aboriginal man with learning difficulties, lured by the offer of a free laptop. The penalty has since been paid in full. "At the time of launching court action against VET FEE-HELP providers, a court order was necessary to enable affected consumers to have their student debts cancelled," an ACCC spokesman said. "This made court action important regardless of a VET FEE-HELP providers’ ability to pay any eventual penalty."

The latest revelations are further evidence of the ongoing legacy of VET FEE HELP, which cost taxpayers $7.5 billion between 2009 to 2016 – most of which went to private colleges over public TAFE. They also come after The Sunday Age revealed that the Morrison government this year alone had to wipe more than $493 million worth of “inappropriate debt” for about 38,000 people, most of whom had loans issued without their consent when they were signed up to substandard courses. Loading While the government is now reforming the sector through a $585 million skills package, industry bosses say VET FEE HELP left people so distrustful of vocational education that many have instead opted to study at universities. “Students who would have gone into VET as a pathway are no longer doing that, and we're not quite certain if we’ll ever get them back,” said TAFE Directors Australia chief executive Craig Robertson.

VET FEE HELP was replaced with a tougher student-loan system in January 2017. Under the new scheme, loans are capped to limits ranging between about $5000 to $15,000 depending on the cost of delivering a qualification. But critics say that the new caps are too restrictive, making it difficult to run enough quality courses. According to department data, 14 providers have entered into external administration or liquidation since the new loan scheme began, but the government declined to answer questions last week about their circumstances. A spokesman for Skills Minister Michaelia Cash simply said: “Quality vocational training is critical to our economy, and the government does not tolerate poor quality training providers. “Every single one must meet strict requirements before they can become an approved course provider – and they must continue to meet these requirements while they are delivering training." VET FEE SCHEME

Australian Institute of Professional Education Pty Ltd, Sydney Federal payments: $210 million Founders: Radiologist Tej Dugal and real estate mogul Ajay Valanju. CEO: Amjad Khanche, a NSW Premier's Awards for business finalist. Action against: Federal Court found it engaged in unconscionable conduct. Fine yet to be determined. Captain Cook College, Brisbane Federal payments: More than $60 million Founder: CEO Ian Cook

Action against: ACCC instituted Federal Court proceedings in November 2018. Parent company Site Group International says it will defend the action in court in 2020. Cornerstone Investments Aust Pty Ltd Trading as Empower Institute, western Sydney Funding: $56 million Owner: Businessman Jin Yang. Action against: Fine of $26.6 million plus $56 million repayment order. Fine remains unpaid. Ceased trading, entered into voluntary liquidation in April 2017.

Phoenix Institute Subsidiary of Australian Careers Network, Melbourne Funding: $100 million Owner: Former police officer Ivan Brown. Action against: Federal Court hearing finished last month, ACCC awaiting outcome. Unique International College Pty Ltd Granville, Sydney