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Six of 10 top private college groups under a cloud

5 Nov, 2015
Source: The Australian
Author: Nicola Berkovic, Legal affairs correspondent

Six of the top 10 organisations running Australian private colleges — which together received more than $620 million in government-funded student loans last year — are under regulatory scrutiny or have been accused of questionable quality or marketing practices.

Four of the six colleges — the College of Creative Design and Arts, Cornerstone Investment, Study Group Australia and the Australian Institute of Professional Education — are the subject of regulatory audits.

One of the colleges, Unique International, is the subject of legal action by the Australian Competition & Consumer Commission and has been deregistered. A sixth, ACTE, which operates Evocca College, is set to be the subject of a possible class ­action by hundreds of students for alleged breaches of consumer and credit laws. Despite the many hundreds of millions of dollars flowing to the six organisations in government-funded VET FEE-HELP student loans, together they had just 1874 students finish their courses last year.

The Australian can reveal that the College of Creative Design and Arts, which runs colleges across Queensland under several brands, including Keystone College, had just 32 students complete its courses last year. It had a progress rate of 11.7 per cent, but ­received more than $35m in government-funded VET FEE-HELP loans last year and had 3576 students enrolled.

Those students were charged hefty course fees. Keystone’s six-month diploma of business costs $13,990, while the same course at TAFE Queensland costs $4900.

Several of the company’s ­directors are involved in running numerous training companies, including consultancies that show other businesses how to become registered training organisations. They declined to talk to The Australian yesterday.

New Zealand-born Aloi Burgess, 40, is one of the college’s ­directors and also a director of at least 10 other training-related companies, according to ASIC records. Mr Burgess owns four properties in Queensland.

One of the companies he ­directs, National Training and Development, is a student brokerage company, which was accused last year of signing up an intellectually disabled student to a training course outside Centrelink. The student was enrolled at Aspire College, of which Mr Burgess is also a director, in two courses costing $30,000.

Mr Burgess is a former ­national sales manager for Evocca College, according to his LinkedIn profile.

Another fellow director, Lindsay Hamon, is a director of at least seven other training organ­isations, according to one website, as is fellow director Karen ­Whitehead.

The website states that Mr Hamon has held “strategic CEO roles that drove year-by-year doubling of revenue across five RTOs”.

The College of Creative Design and Arts last night issued a statement saying the government’s figures were “12 months out of date and not accurate in reflecting student outcomes”.

“Notwithstanding this, CCDA has acted swiftly to put in place strong measures to assist students to progress and complete their courses,” it said.

It said these included a language program to “pre-identify students” who were “not yet ready to enrol for a CCDA course”. It said it had also “increased its staff-to-student ratio by opening physical branches in five states”.

Mr Burgess is also a director of the Australian Indigenous College, which is not registered but delivers courses under the registration of Study Group Australia — another company the subject of an Australian Skills Quality Authority’s targeted audit.

Study Group Australia managing director Warren Jacobson said the regulator had asked for information on a narrow range of matters and his company had strict compliance and quality controls in place.

“We will provide the ­information that they’ve asked for and I imagine we will get back to business,” he said.