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Australia: AIPE fails after loan scheme scrapped

AIPE in Australia has gone into liquidationAIPE went into voluntary administration just days after it was announced the VET FEE-HELP scheme is being scrapped. Photo: Hamza Salam.

AIPE allegedly “made false or misleading representations and engaged in unconscionable conduct” when marketing VET FEE-HELP funded courses

As many as 16,000 students could reportedly be affected by the collapse of the college, which has been plagued by scandal and litigation over the last year.

Courses are continuing while a liquidator appeals for a buyer for the for-profit provider.

AIPE allegedly received $210.9m in funding for students on its VET FEE-HELP courses between 2013 and 2015

It is not yet known how many international students are enrolled at AIPE, which offers ELICOS courses for overseas students as well as higher and vocation education and training.

Its CEO, Amjad Khanche, told The PIE News in 2014 that the majority of international students enrolled were from South America, especially Brazil, and Eastern Europe. The college also had students from the UK enrolled and targeted online sales for students in the UK, he said.

Khanche has not responded to requests for a comment on the situation.

AIPE has faced multiple legal challenges in the last year. In December 2015 the Australian Skills Quality Authority revoked its license to operate as a VET provider. An appeal is currently underway, with closing statements due to be heard in mid-November.

Meanwhile, the Australian Competition and Consumer Commission and the Commonwealth jointly filed proceedings against the college in federal court in March, alleging that AIPE “made false or misleading representations and engaged in unconscionable conduct” when marketing and selling courses funded by VET FEE-HELP, which provides loans to domestic students.

AIPE received more than $210.9m in state funding for upwards of 15,400 students enrolled on its VET FEE-HELP funded diploma courses between 1 January 2013 and 1 December 2015, it is alleged.

There are also reports that AIPE enrolled some barely-literate Australian students on courses they were unlikely to complete, saddling them with debt they were likely unable to repay.

The government announced last week that the VET FEE-HELP scheme would be scrapped.

Under sweeping reforms to the vocational education loans scheme announced by Education Minister Simon Birmingham last week, VET providers must now undergo a rigorous screening process in order to obtain student loan funding.

They will also be monitored more closely once they are receiving funding, according to Birmingham, who said the changes aim to “weed out the rorters and restore credibility to vocational education and training”.

AIPE has gone into liquidation

AIPE’s Twitter profile notes the college has gone into liquidation

Just two days after Birmingham’s announcement, AIPE announced it was going into voluntary administration and had appointed Ferrier Hodgson as liquidators.

A notice on the financial advisory firm’s website invites “urgent expressions of interest” for the sale of all or part of the college.

If a buyer is not found, Australia’s Tuition Protection Service will help student visa holders wanting to continue their studies with a new provider with tuition fee support or in pursuing a refund.

The Australian Council for Private Education and Training, of which AIPE is a member, is currently working with the liquidators to obtain student details. “We will then be writing to students offering them further information and an opportunity to continue their study with another provider,” ACPET’s CEO, Rod Camm, told The PIE News.

Camm noted that although it doesn’t have student data yet, “We understand there are not a high number of international students.”

Asked about the reasons for the collapse, Camm said the representative body didn’t have access to those details.

“However, we note that they have been subject to significant regulatory actions and litigation and also that the VFH scheme is being closed down and that the new scheme will require a new approval for providers,” he added.

English Australia – which terminated AIPE’s membership over breaches of its constitution – has also said it will work to support non-student visa holder ELICOS students if the college closes. “English Australia will work to ensure all students are supported where feasible,” said CEO Brett Blacker.

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