Students saddled with thousands of dollars of course fees will have their public debt reversed, after the Australian Competition and Consumer Commission successfully pursued one of the nation's largest college networks for $44 million.
On Monday, Careers Australia, which has campuses in the Sydney and Melbourne CBDs as well as Parramatta, admitted it had breached Australian consumer law and "engaged in unconscionable conduct" while it enrolled students in some of the poorest, most remote communities in Australia into thousands of dollars of debt.
According to the ACCC, the conduct included misrepresenting that the courses were free, that they would lead to employment, and offering inducements such as iPads.
ACCC chairman Rod Sims said it was unacceptable that Careers Australia enrolled consumers from a remote Aboriginal community but did not alert them to the debts they would incur.
"This conduct affected some of the most vulnerable and disadvantaged groups of consumers in Australia," he said.
"It is also unacceptable that significant Commonwealth money went to fund courses that were often not undertaken."
The court-enforced undertaking, revealed on Monday, allows Careers Australia to avoid court action in the Federal Court but compels the company to automatically cancel the enrolments of students who have not completed a unit of study, and to repay the Commonwealth any amounts received as a result of those enrolments.
Since 2013, the company has received $190 million in Commonwealth funding for 20,000 enrolled students. It has since begun the process of reversing enrolments and student debt, handing back $44 million to taxpayers, and relief to up to 12,000 students, some of whom live in impoverished communities.
The private college network has now been forced to implement a compliance program, including training for staff and regular reviews for its 15 campuses where it runs courses in nursing, business, counselling and community work.
Last year the company's CEO, Patrick McKendry, stepped aside from his role as one of the federal government's top advisers on vocational education pending the outcome the ACCC investigation.
Careers Australia is the fifth education provider to be pursued by the ACCC this year in its attempt to clean out the scandal-plagued vocational education sector.
So far, the ACCC has sought the return of more than $460 million in taxpayer funding from Sydney colleges Unique, Empower and AIPE, and Melbourne's Phoenix Institute. It is understood the regulator has another five private operations in its sights.
