"These are deeply disturbing allegations. If proven correct they are an example of the worst type of behaviour in the operation of the VET FEE-HELP scheme," Senator Birmingham said. "This is the worst type of behaviour that is bringing down the reputation of training in Australia." The news came as shares in Australian Careers Network, the listed company that owns Phoenix Institute, lost 10 per cent of their value in morning trading following the report in Fairfax Media on Thursday. The report revealed that Phoenix Institute was one of a number of vocational colleges whose salespeople use the lure of free laptops to sign students to courses that they may never complete, in return for $18,000 payments from the federal government. The scheme is projected to treble in cost to the federal government this year, from $1.3 billion to $4 billion, as new colleges and salespeople jump into the industry.

The industry regulator, the Australian Skills Quality Authority, said it had received 20 complaints regarding Phoenix Institute since mid-May. "As a result of complaints received, ASQA commenced regulatory scrutiny of the provider in July to assess its compliance with the required national standards," it said. The company issued a statement on Thursday insisting that it had "industry-leading course completion rates" of 80 per cent, and that its screening process for enrolment applications meant that up to half of the new student applications brought to it by salespeople were rejected. "The [Fairfax] article is in the board's view inaccurate and misleading," the statement said. According to the Department of Education, just one out of 122 students who started a course at Phoenix in 2010 had finished by 2013, a completion rate of 0.8 per cent. The institute had a completion rate of 51 per cent for 2011 commencing students and 22 per cent for 2012 commencing students, according to the department.

A company spokesman said the 80 per cent figure referred to the entire Australian Careers Network group, not just the Phoenix Institute, and the company aimed to "reverse any low completion rates". Senator Birmingham said his department and the Australian Competition and Consumer Commission also had the Phoenix Institute under investigation. The Consumer Action Law Centre has also received complaints about pushy salespeople doorknocking and cold-calling vulnerable people to sign them up to courses. The centre's senior policy officer, Katherine Temple, said she was very concerned about reports that Phoenix Institute was targeting vulnerable Victorians. "They are potentially signing people up to a lifetime of debt."

Students must pay back the debt held against them once they earn more than $54,000 per year. Ms Temple said the commission-based recruitment model adopted by training colleges was a big part of the problem. "These salespeople are driven by commission and as a result best practice falls by the wayside." She welcomed federal government reforms to crack down on rogue providers but said an industry-funded national ombudsman scheme was needed to resolve disputes. "We need to make sure that students who have been duped into signing up to inappropriate course are refunded. The financial burden should be shifted from students and taxpayers to offending training providers."

The Fairfax report included secret video of Nikhil Talwar, one of the "brokers" selling courses on behalf of Phoenix Institute, talking about the illegal practice of giving away free laptops to lure prospective students to sign up. His company, Education Circle, is one of the group's registered brokers. Senator Birmingham made it clear that "Phoenix will be held accountable for the actions of Education Circle, acting on their behalf". Opposition spokesman Kim Carr said unscrupulous providers were undermining public confidence in the vocational education system. "The cost of their activities is being borne by individual students, Australian taxpayers and industries that are being deprived of the skilled workforce they so desperately need," Senator Carr said. Victoria's Training and Skills Minister, Steve Herbert, said Phoenix Institute held a contract with the state government in 2013 and 2014, but did not apply for one in 2015.

He called on the Commonwealth to do more to clean up the VET-FEE HELP scheme, saying it had got "out of hand." "It is totally unconscionable that we have teams of shyster salespeople going around preying on those with disabilities or disadvantage," Mr Herbert said. "They are preying on their vulnerability, not delivering any skills or any real opportunity, and those people are not only saddled with debt that will probably never get repaid but they lose their entitlement to other government-funded training." He said costs to taxpayers had skyrocketed under the scheme and ASQA had been too slow passing on information to Victoria about dodgy colleges. Since July, the Victorian government has terminated the contracts of six training providers due to "serious cases of non-compliance". More than $10 million has been withheld from a further 17 providers who are under case management. Mr Herbert said the state government had also ramped up its audits of the sector, sending auditors into colleges to talk to students and providers.

"Something like that needs to be duplicated by the Commonwealth because this is out of hand. The taxpayer should not be paying these huge amounts of money for training that never gets completed, that's unsuitable and never gets a job outcome." Figures show Victorian students who drop out of expensive training courses are wasting more than $40 million in fees and government funding.





