One of Australia’s biggest private vocational training schools has spectacularly caved in on itself today, leaving over 1,000 staff and 15,000 students dangling in limbo with no clear picture about their futures.
Careers Australia was placed into voluntary administration by its operators today, with staff told they would be stood down without pay effective immediately, and students informed by text message that all classes have ceased.
The company was already well up against it after a Federal Government decision six weeks ago that saw it stripped of its funding, largely due to a particularly poor track record which included worryingly low graduation levels and aggressive recruitment tactics that brazenly contravened consumer law.
The facility was denied entry into the Turnbull Government’s revamped VET student loan scheme, effectively cutting off its source of cash completely. The school had previously raked in $264million in taxpayer funding between 2013 and 2015, but only managed a graduation rate of just 14.7% of all students.
The ABC reports that an appeal of the decision by Careers Australia failed earlier this week, triggering the collapse of the company.
Students enrolled at the facility were informed their school had virtually disappeared via text message delivered at 10:45pm last night.
“All activities of Careers Australia Group are suspended. No classes, no workplaces effective immediately. Further information will be provided.”
The company issued a media statement blaming the Federal Government ruling for the implosion.
“The recent decision by the Federal Department of Education and Training not to approve Career Australia’s application to become a VET student loan scheme approved course provider has materially impacted the group’s operations.”
“Regrettably, we have had to suspend all classes and stand down employees while we assess all options available to the business moving forward.”
A series of reports from ‘7:30‘ found that the company had been using shady and overly aggressive recruitment practices, including door-to-door salespeople dangling “free” computers as inducements to sign up. When the Federal Government put the kibosh on that, the company then allegedly moved to telemarketing, online competitions, and other nefarious means of spruiking their dodgy product.
Staff reported feeling blindsided by the decision, asserting that senior management never informed them of the company’s dire financial position.
The Education Department has asserted that tuition assurance arrangements already in place would help transfer enrolled students into a similar course of study, or offer up refunds of any tuition money that remains unspent.
They also encourage students who were enrolled in courses at Careers Australia to contact TAFE Directors Australia – Careers Australia’s tuition assurance provider – on 02 9217 3180 with any queries. They can also contact the Department of Education and Training on 1800 020 108.
Photo: ABC/Twitter.
