The Federal Court found on the 2 July that private education institution Captain Cook College engaged in systemic unconscionable conduct to maximise profit from vulnerable and disadvantaged students, the majority of whom did not complete any part of their course.
Productivity Partners Pty Ltd, trading as Captain Cook College, offered diploma courses subsidised by VET FEE-HELP government loans on campuses in Sydney and Brisbane.
The college recruited students outside Centrelink offices on the false premise that they would be given a free laptop and course that they would not have to repay.
Recruiters targeted illiterate, elderly and intellectually disabled people for courses they were unlikely to complete or benefit from, signing them up for large student loan debts. Multiple other private colleges have been found using these recruitment tactics, with some students claiming they only signed up because they felt harassed.
The Australian Competition and Consumer Commission (ACCC) corporate watchdog commenced legal action against the private college in November 2018, alleging that it had engaged in misleading conduct since September 2015 when it removed consumer safeguards from its enrolment and withdrawal processes to improve financial performance.
“Over 90 per cent of the affected consumers did not complete any part of their online course, and about 86 per cent of them never even logged into their course,” ACCC Chair Rod Sims said.
“Captain Cook College engaged in egregious conduct that sought to maximise its profit at the expense of students who were left with a debt and at the expense of the Commonwealth.”
Captain Cook College claimed a shocking $50 million over three months under the VET FEE-HELP program for about 6,000 consumers, making it one of many private colleges that have rorted the system.
“This finding is a symptom of the for-profit higher education system, where students are treated only as consumers, and private providers are able to take an unfair share of money which would be better spent by public education providers,” National Union of Students President Zoe Ranganathan said.
This is the fifth ACCC action in which the Court has found that a VET FEE-HELP provider has made deceptive representations to exploit students. It has previously taken action against Unique International College, Cornerstone Investment Aust Pty Ltd (trading as Empower Institute), Australian Institute of Professional Education and Acquire Learning.
VET FEE-HELP was introduced in 2007 by the Howard government as a HECS-type loan scheme to encourage vocational training. It closed for new students at the end of 2016, replaced by VET student loans.