Government forced to wipe $500m in 'dodgy' student debt

The federal government has been forced to wipe almost $500 million in allegedly dodgy debt slapped on students in one of the worst education rorts in Australia.

Almost 40,000 students have had their debts cancelled so far but there are still thousands of cases yet to be assessed.

The debts happened through a vocational loan scheme, known as VET. In many cases, students were signed up to the loans they didn't consent to.

The issue with the program is it granted virtually unregulated government subsidies to anyone who signed up. So, it led to a lot of people allegedly being duped by private course providers.

The vocational loan scheme was scrapped in 2017 and this year the government started to wipe debts found to be inappropriate.

The Commonwealth Ombudsman says it could take another year before all complaints have been assessed.



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