Thousands of students in limbo as Careers Australia collapses after withdrawal of govt funding

Students protest against a federal plan to cut funding for higher education. The collapse of Careers Australia comes as the government reviews the way funding is distributed to the sector.
Students protest against a federal plan to cut funding for higher education. The collapse of Careers Australia comes as the government reviews the way funding is distributed to the sector.PHOTO: EPA

SYDNEY (REUTERS) - Careers Australia Group, a provider of vocational education and training, has gone into voluntary administration after losing government funding, putting 1,100 people out of work and 15,000 students in limbo, its administrators said on Friday (May 26).

All work placements for students, many of them from overseas, will be suspended immediately, as will all school-based apprenticeships and traineeships.

Australia's vocational education sector has been hammered by an exodus of foreign students, its main customer base, as universities offer more places in line with new rules allowing higher numbers of overseas students.

"Regrettably, we have had to suspend all classes and stand down employees while we assess all options available to the business moving forward," said Mr David McEvoy, partner at PPB Advisory, which was named as administrators late on Thursday (May 25).

"We are working closely with the management and key stakeholders to urgently determine whether the business can be sold or restructured."

The collapse of Careers Australia, which has 14 campuses, comes as the government reviews the way funding is distributed to the sector.

The Department of Education and Training said the firm had notified Careers Australia on Wednesday that it will not accredit the company for a new vocational education scheme.

"Careers Australia did not meet three of the provider criteria: financial performance, management and governance, and student outcomes," it said, adding that the government may provide financial assistance to affected students.

The firm did not address the reasons for the denial of funding in its statement, saying only that the administration process provides an opportunity to explore options available to the group.