The researchers found that overall, just over half (53 per cent) of all VET certificate graduates excluding tradespeople earn above the repayment threshold. Non-tradespeople represent 65 per cent of VET certificate graduates.
The researchers, who based the calculations on census data, said this was significant because VET certificates are not covered by the loans scheme.
“This suggests extending the loans scheme to lower-level courses will mean many loans will not be paid back,” the researchers said.
The Independent Tertiary Education Council Australia, the peak body representing independent providers, has also called for the suspension of a 20 per cent fee levied on those accessing student loans to be extended beyond September 2020.
“As the crisis continues it’s appropriate that the suspension be extended through to June 30, 2021,” council chief executive Troy Williams said.
A spokeswoman for Employment and Skills minister Michaelia Cash said the government was considering the Productivity Commission’s recommendations and reviewing the VET Student Loan system. It would consider a range of views about how the program could be strengthened.
The federal government’s student outcomes data suggests that in the year after graduation, certificate I, II and III graduates are likely to earn less than the minimum repayment threshold. Salary outcomes of full-time Certificate IV graduates exceed those of diploma or higher graduates.
The Mitchell Institute education policy think tank has also warned that without reform, Australia will not be able to rely on the VET sector to provide the quality training needed to drive an economic recovery from the COVID-19 pandemic. It has made 10 recommendations, including a needs-based funding model similar to the systems used to fund schools and hospitals.
The researchers said this “baseline plus loadings” approach would create a “simpler, fairer national funding arrangement” between the Commonwealth and state and territory governments.
Ms Pilcher said that while the VET sector was designed to be flexible, this could result in huge variations in quality, which meant the public could not always be confident in how their money was being spent.
“We think it’s time to be more specific about the type and amount of training that students receive in publicly funded courses,” she said.
“The failed reforms of the past decade mean the VET sector can get a bad rap, but actually there is enormous capability and capacity if we get the settings right.”
Ms Pilcher said more independent assessment methods and measures of proficiency were needed.
Get our Morning & Evening Edition newsletters
Anna Patty is a Senior Writer for The Sydney Morning Herald with a focus on higher education. She is a former Workplace Editor, Education Editor, State Political Reporter and Health Reporter.