Chapter 2
Issues
Introduction
2.1
Submissions supported action being taken by the government to address
the presence of poor quality education and training providers in the
international education sector. Many submissions also looked beyond the scope
of this bill and made further suggestions for improvements to the regulatory
framework. As noted in chapter one, this is transitional legislation focussed
on addressing the immediate issues of quality education and training delivery.
The longer term issues are under review by Mr Baird. Where appropriate, some
additional suggestions which fall outside the scope of the bill have been
incorporated in the report. Issues raised with the committee regarding the bill
focussed on fairer targeting of high risk providers, addressing ad hoc
relationships of providers with agents and the capacity of the regulatory
authorities to ensure compliance with agreed standards of education and
training.
Re-registration of providers
2.2
Schedule 1 provides for the re-registration of providers. The bill
requires re-registration of all institutions currently registered on the
Commonwealth Register of Institutions and Courses for Overseas Students
(CRICOS) by 31 December 2010. Item 25 inserts proposed section 92A which details
that providers not registered by this date will have their registration
cancelled. DEEWR advised that the purpose of this measure is to:
Build confidence in the quality of education services
provided across the entire international education sector, and to strengthen the
registration process by allowing only providers who can satisfy the higher
entry standards that will be applied in the re-registration process to be
registered. It will establish a clean slate register of education providers for
overseas students.[1]
New registration criteria
2.3
Items 5 and 7 introduce two new registration requirements:
2.4
If the new criteria are not met by a provider, its registration will not
be renewed. This will be assessed by the designated authority in each state and
territory in the first instance but the Australian Government's delegate will
also be able to refuse re-registration if the delegate believes the two
criteria have not been met.[2]
Implementation
2.5
These measures received general support. The National Union of Students
(NUS) welcomed the re-registration and new criteria and noted:
NUS has become increasingly concerned about the registration
procedures undertaken by the state authorities that should have involved
on-site examinations of the campus, teaching spaces and equipment. It has been
apparent in many of the media articles that these initial examinations were not
undertaken or were not legitimately undertaken, given the teaching spaces and
equipment would not have been able to meet the required standards.[3]
Call for a risk management approach
2.6
While there was no outright opposition to this measure, implicit in the submissions
was the view that those who are compliant with legislation are being punished for
the actions of a few unscrupulous providers. The committee acknowledges that the
majority of providers demonstrate a commitment to education and training and it
recognises the unfortunate necessity that all providers will have to go through
processes to eliminate the few poor performers. The differences between the
providers of education and training are not well understood overseas and, in
order to restore confidence in the whole sector, the committee understands a
'clean slate' approach is necessary.
2.7
Submissions suggested a targeted approach to implementation to address
the areas experiencing most problems. The Australian Technology Network (ATN)
pointed out that between 2005 and 2008 international enrolments at private
providers increased by 195 per cent and accounted for 84 per cent of all
international VET enrolments. In contrast, international higher education
enrolments grew by 12 per cent over the same period. In the same period,
Indian student enrolments in private VET providers grew by 1,724 per cent. ATN
advised that each education sector has unique characteristics and suggested applying
a risk management approach to the various sectors. This risk profile would look
at elements such as:
-
the percentage of international students against the full cohort;
-
diversity in source countries;
-
management of agents;
-
pathway composition;
-
that universities are first and foremost providers of education;
and
-
length of registration.[4]
2.8
Universities Australia also suggested that a risk management approach
would direct attention to institutions with a higher risk profile which could
be characterised by:
-
a high proportion of students from a single source country;
-
provision of a limited number of education programs (including
those linked to future migration outcomes);
-
a rapid increase in enrolments in the recent period;
-
previous breaches of the National Code; and
-
a history of visa fraud in student visa applications.[5]
2.9
Independent Schools Council of Australia (ISCA) also pointed out that the
new requirements do not differentiate between the private vocational sector and
other education sectors and advocated for re-registration to focus on high risk
institutions. It believed that the new registration requirements are redundant
for the independent schools sector.[6]
2.10
The Australian Council for Private Education and Training (ACPET) called
for the measures to be strategic and targeted so that the majority of education
providers who operate ethically are not disadvantaged by the actions of a few.
It advocated that those providers with a history of regulatory compliance
should not be disadvantaged by an additional regulatory and administrative
burden.[7]
Costs
2.11
In arguing for a risk management approach, submissions also pointed to
the financial and administrative burden that re-registration will impose on
institutions.[8]
DEEWR noted that the financial effects could be reduced by state and territory
registration authorities taking a risk management approach and by possible
changes in prioritisation of their current activities.[9]
Resources
2.12
Submissions also expressed concern about the ability of the regulatory
authorities to undertake the measures proposed in the bill, questioning whether
they have sufficient resources.[10]
The AEU noted:
The issue of adequate resourcing of state and territory
agencies charged with the responsibility of registering and auditing international
education providers has been highlighted by a number of stakeholders throughout
the current debate. Requiring a wholesale re-registration of all providers will
not serve its intended purpose if governments fail to provide adequate
resources to ensure that such processes are effective.[11]
2.13
NUS submitted:
...NUS hopes that there will be adequate qualified staff
through which to conduct the large number of audits required for this process.
Given that in 2008 in Victoria there were 21 contract auditors (according to
the VRQA taskforce background information) as well as qualified staff auditors,
there may need to be an increase in resources in order to ensure the system
does not end up in the same position it began, due to under resourced auditing
and monitoring.[12]
2.14
In addition to the comments made on resources in chapter one, the committee
notes advice from DEEWR that the Commonwealth departments involved in
regulation will fund their own contributions to the re-registration process
through re-prioritisation and management of existing resources.[13]
As noted in chapter one, states and territories will not receive additional
resources.[14]
Comment
2.15
How the process for universal re-registration will proceed has not yet
been announced. The committee notes that the Commonwealth is working with states
and territories to develop a consistent approach to the measures contained in
the bill, particularly re-registration.[15]
2.16
Some submissions suggested a more targeted approach to re-registration. The
committee supports dealing quickly with high risk providers, if only to ensure
the best use of resources. It notes that DEEWR appears to support a risk
management approach:
Implementation can be designed in a streamlined way using a
risk management approach and using reference to other regulatory regimes where
relevant to avoid as far as possible any unnecessary burden on providers.[16]
Recommendation 1
2.17 The committee recommends that a re-registration process be developed
which gives priority and directs resources to high-risk providers.
2.18
In demonstrating the two new criteria have been met, the committee notes
advice from DEEWR which stated:
Capacity to deliver quality education can be demonstrated
through a track record of successful provision in Australia or in another
jurisdiction, or by ensuring that a new provider has in place all the elements
needed to give confidence in its ability to meet the required standards.[17]
2.19
The committee understands that the cost to the government of the
re-registration process will be managed within the current budget. As outlined
in chapter one, the committee has reservations about the ability of the
regulatory authorities to carry out the measures in the bill in the time
required. The committee expects the issue of adequate funding to be addressed during
the review of the ESOS Act being undertaken by Mr Baird.
Ensuring support for students
2.20
While supporting the re-registration measure, the Australian Federation
of International Students (AFIS) cautioned that students must be provided with
adequate support where providers do not meet the new standards and face de-registration.[18]
Support for any displaced students was also urged by ACPET. It advised that it
is currently undertaking modelling of the increased audit activity and
assessing the capacity for the market to absorb any displaced students and looking
at its possible financial obligations through the Tuition Assurance Scheme
(TAS). It also recommended the formation of a taskforce to respond to the needs
of displaced students.[19]
2.21
The NTEU expressed concern about the design and implementation of the
ESOS Assurance Fund and its relationship to the TAS. It had sought clarification
from DEEWR about whether students have the right to apply directly to the ESOS
Assurance Fund where they wish to access a provider of their choice. NTEU is
concerned that the choices offered to students will be limited to providers
that are members of the relevant TAS. The NTEU recommend that there be only one
national assurance scheme for all providers of education to international
students.[20]
Comment
2.22
DEEWR advised the committee that while it is not possible at this stage
to predict the need for the ESOS Assurance Fund, these arrangements will be
considered by the review underway by Mr Baird.[21]
The committee is reassured that the reviews of the possible use of the Tuition
Assurance Scheme and the ESOS Assurance Fund will occur in time for the
re-registration process and trusts that issues such as the one raised by the NTEU
will be clarified.[22]
Identification of agents used by providers
2.23
Schedule 2, Item 4 inserts proposed section 21A which requires providers
to maintain and publish a list of its agents. This measure was supported. It
also provides for regulations to be made dealing with providers' agents. DEEWR
advised that the regulations to provide further protection for students will be
developed in consultation with providers and may include:
...training requirements for providers, recognition of overseas
schemes of registration for providers and the provision by providers of media
through which students may record their experiences of agents.[23]
2.24
AFIS listed of a number of unrealistic promises made to international
students by irresponsible agents. It also pointed to the links between
education and migration agents and the commissions received.[24]
2.25
This measure was supported by the Tasmanian government which suggested a
national register and selection criteria for education agents.[25]
2.26
Submissions noted that this requirement is already carried out by some
providers. ATN submitted that all ATN universities undertake thorough 'due
diligence' when entering into relationships with overseas education agents and
already list agents who work on their behalf on their websites.[26]
Universities Australia noted that all universities either publish a list of
their agents on their website, plan to do so as soon as possible or are open to
doing so.[27]
2.27
While supporting the amendment, some organisations noted that agents
often represent parents. ISCA explained:
Parents will approach agents to seek a place for a child in a
school that might be located near a relative in Australia or which offers a
particular program. In this case the agent is clearly not recruiting on behalf
of the school.[28]
2.28
ISCA noted that, under the current legislation, schools are not required
to have agent agreements with these agents although some schools choose to do
so. It requested clear guidelines about which agents need to be posted on
websites.[29]
2.29
This requirement appeared to cause concern for some submitters but the reasons
were not clearly articulated. English Australia pointed out that the English
language sector is particularly dependent on education agents and that this is
not the sector which has provoked these amendments. It mentioned that the
requirement has the potential to fracture long-standing and important business
relationships but did not explain why. English Australia then asked for the legislation
to be delayed so as to allow more consultation on unintended consequences.[30]
2.30
ISCA submitted that there are some schools with very limited
representation by education agents but they do have relationships with specific
regions or areas. It argued that requiring their details to be published could
compromise the commercial relationship, 'leaving the agent open to 'poaching'
by another provider'.[31]
2.31
NUS provided a possible reason for any reluctance to publish agents:
...many education institutions are reliant on the work of the
education agent for their share of this extremely lucrative market and as such,
the most successful education agents are increasingly of the most value to the
providers and the unethical agents is more likely to be the successful agent...Therefore,
it is unlikely that an education provider will disengage an unethical agent
unless they are concerned about the consequences of engaging with this agent,
such that the law is being monitored and enforced with penalties with will
impact detrimentally on the trade of the provider...[32]
2.32
Beyond the specific amendment to address unscrupulous agents, some
submissions suggested the introduction of education agent protocols or a code
of practice, and capping the percentage of commissions paid to agents and
education agents practicing as migration agents.[33]
Comment
2.33
The committee does not believe that reasons opposing this amendment have
been clearly articulated or persuasively argued. If a provider has a
relationship with an agent, then they are responsible for establishing the bona
fides of the agent. Having done so, there should be no problem in listing them publicly.
For example, the committee notes comments from English Australia:
...colleges spend a lot of money developing relationships with
agents. The good colleges send their staff offshore to visit their offices,
meet their staff and provide induction or training programs.[34]
2.34
Where such a relationship exists with commitment from both sides, it
would seem counterintuitive not to wish to publicly acknowledge it. Even in the
case of ad-hoc relationships, where a provider may occasionally be
approached by an agent on behalf of a family seeking a particular location or
course, the committee believes there is still a responsibility for a provider,
on behalf of their students, to assure themselves that they are dealing with a
reputable agent.
2.35
The committee believes the requirement to publicly list agents would
have little effect on most providers of education and training. Universities
maintain such a list and almost all of them publish the list on their websites.
The committee also notes that the private college sector has announced that it
will establish a public list of approved agents.[35]
2.36
The committee is pleased to note the advice from DEEWR that more
protection for students in this area will be addressed as the regulations are
developed. The references committee will have more to report on this matter in
its report on the welfare of international students.
Consultation
2.37
DEEWR outlined the consultation that has taken place on the amendments
outlined so far in the report:
The amendments related to re-registration and education
agents were developed in a short time-frame in response to public concerns
about the impact unsatisfactory providers and agents could be having on
overseas students and the reputation of Australia's international education
industry. Consultation on these two amendments involved states and territories
through the Joint Committee on International Education (JCIE) and, particularly
in relation to the re-registration proposal, by teleconference with selected
industry stakeholders including the Australian Council for Private Education
and Training, English Australia, TAFE Directors Australia and Universities
Australia. In her second reading speech, the Deputy Prime Minister noted the
need for further consultation with stakeholders in implementing these
amendments.[36]
Discretionary removal of the prohibition on education providers collecting
monies from students when a course has been suspended
2.38
Schedule 2, Item 14 provides for the discretionary removal of the
prohibition on providers collecting money from students who have started the
course when a course has been suspended for the whole or part of the period of
suspension. Evidence supported this amendment which will facilitate the
continuing provision of courses with the minimum of disruption to students.[37]
2.39
However, the AEU did not agree and stated:
The AEU sees no valid reason why a ministerial discretion
should be introduced to enable a provider to solicit or accept money for a
course from an overseas student or prospective student while they are
suspended. At a time when grave concerns have been raised about the quality of
education being provided to international students every effort should be made
to protect them from operators whose registration is at risk. As a right all
prospective students should be able to access the audit history of providers
and be advised of any suspensions or sanctions.[38]
2.40
DEEWR explained the reasons for this amendment:
Currently, while suspended, [from registration on CRICOS]
providers are permitted to continue teaching students who had commenced their
study prior to the date of imposition of the suspension. Depending on the
circumstances, it may be unreasonable to deny a provider the right to collect
fees from students that it continues to teach. If the provider is continuing to
provide a service, and is incurring costs to do so, it is reasonable for the
provider to collect fees from existing students if the suspension is for minor
offences. This will assist the provider to continue providing education to
enrolled students, which will help avert potential insolvency and disruption to
students' education.
...It will reduce the risk of providers being placed under
unreasonable financial distress while undertaking the necessary improvement to
their operations and rectification of breaches that are usually required by a
regulator before the suspicion is lifted [39]
Comment
2.41
The committee agrees that, in circumstances where the offence is minor
and steps are being taken to address it, this measure would result in less
disruption for students than risking closure of the school by denying it the
ability to collect fees. However, the committee believes that a timeframe for
the provider to rectify the offence should be specified. It also believes that in
these circumstances an audit should be undertaken by regulators to determine
whether the offence is symptomatic of more serious problems.
Recommendation 2
2.42 The committee recommends that where a provider's registration has been
suspended for a minor offence and it is allowed to continue to collect fees,
that a clear and reasonable timetable should be imposed to rectify the offence.
Recommendation 3
2.43 The committee recommends that where a provider's registration has been
suspended, but the provider is allowed to collect fees, an audit should be undertaken
by regulators.
Technical amendments
2.44
DEEWR advised that the amendments detailed above were developed quickly in
response to public concerns about unscrupulous providers and agents. The more
technical amendments described below address issues that have arisen in the
application of the legislation and which require clarification. The amendments:
...seek to harmonise the application of the Act with the
education quality assurance and regulatory frameworks as well as provide greater
flexibility to reduce unnecessary red tape. These more technical amendments
have been the subject of consultations on a case-by-case basis, and in the
course of regular dialogue with industry stakeholders and with states and
territories through such fora as the JCIE [Joint Committee on International
Education].[40]
Conditions imposed by
state/territory governments on education providers to be recognised by the
Commonwealth
2.45
The bill will allow conditions imposed on a provider's registration by a
state or territory authority under state legislation to be recognised and
adopted or modified by the Commonwealth. This could occur at the time of the
initial registration or any time after registration. DEEWR advised that this
amendment will for example:
...enable the Commonwealth to enforce restrictions on the
number of enrolments which are currently imposed and enforceable only through
state and territory legislation.[41]
2.46
DEEWR advised that this amendment is necessary because:
At present the Commonwealth must undertake its own
investigation and enforcement action in order to impose a condition on a
provider's CRICOS registration, even where the state or territory authority has
already carried out this work under its own regulatory regime. This amendment
will remove this duplication of regulatory effort and allow the Commonwealth,
where appropriate to support the state/territory action by adopting the
condition for the purpose of CRICOS registration.[42]
2.47
Evidence supported this amendment to streamline the ability of
governments to share information and address provider compliance breaches more
effectively.[43]
Exemptions from provider default
refund requirements for providers changing their legal identity
2.48
DEEWR advised that this amendment will:
...lessen the financial and regulatory burden on providers
changing their legal entity in circumstances where the delivery of courses and
outcomes for international students will not be affected. In the past, a number
of providers have been found to be in default when no negative consequences
have been imposed on either their students or the organisation's education
outcome as a result of the change to the legal entity, for example a normal
business takeover or merger.[44]
2.49
Evidence supported this amendment to lessen the financial and regulatory
burden on providers.[45]
Suitable alternative course
2.50
When a provider can no longer offer a particular course, it is obliged
to offer the student a refund or a place in a suitable alternative course. Currently
there are no clear criteria to determine whether a course is a suitable
alternative. This amendment will enable the development of clear criteria in the
ESOS regulations.[46]
2.51
Evidence supported this amendment which aims to provide clarity in
relation to where students can be placed by the Tuition Assurance Scheme.[47]
NUS suggested the criteria for a 'suitable alternative course' include the
following:
-
the student should not be academically disadvantaged;
-
the student should not be financially disadvantaged;
-
the course should provide for an equal or higher academic
qualification;
-
the course should provide a qualification equivalent to the
occupation or vocational outcome as the discontinued course;
-
the course should allow a student to remain in housing and
employment contracts; and
-
the course should be offered at a suitable proximity to their
residential address.[48]
Other issues
Internal and external complaints procedure
2.52
The importance of a complaints procedure is recognised through the
National Code in Standard 8. The Commonwealth Ombudsman suggested that the
recent problems with irresponsible providers may mean the requirements are not
being met and proposed the following:
This failing could be addressed by stating in the legislation
itself that a provider shall not be registered unless the Secretary is
satisfied that the provider has adopted a complaints process that complies with
prescribed criteria. Section 9 of the legislation should be amended to require
all providers to give the Secretary a written complaints policy and procedure
(including identification of their external complaints mechanism), as part of
the requirements to be met before the provider is registered.[49]
2.53
To address this issue quickly, the Commonwealth Ombudsman recommended a
two-part compliance audit be undertaken.[50]
The Commonwealth Ombudsman also noted that apart from WA, the external
complaints mechanism used by students is not clear. He suggested that:
There would be a more effective marshalling of complaints
information and trend data, if a single national agency were appointed through
the National Code or legislation to undertake this role, or if there was a
single entity identified as the external complaints mechanisms for all
providers in each state and territory, with annual reporting provided to a
relevant agency for collation at a national level.[51]
Comment
2.54
The committee supports clear advice to students of the internal and
external complaint mechanisms available to them. However, it believes that
consideration of these issues should be included in the wider review of the
ESOS Act being undertaken by Mr Baird.
Conclusion
2.55
The experience of the majority of students living and studying in
Australia is very positive. The committee believes that unscrupulous operators
are in the minority but it is disturbed by the exploitation of students that
has occurred. It affects not only the students but also their families and the
reputation of Australia as a provider of quality education. The committee
welcomes this opportunity to review the legislation that is part of the effort
to eliminate the harm done by a small number of agents and providers, and to
improve the educational experience of international students in Australia.
2.56
The committee recognises that the amendments contained in the bill are
only part of the processes to improve the quality of education providers and
agents. There is further detail to be worked out, but this legislation is
important as a quick response to restore confidence in the quality of the
education provided to international students. It sends a clear message about
the need to improve quality and compliance with regulations. The bill will
strengthen the registration process which will reduce the number of high risk
providers currently in, or seeking entry into, the sector and provide a 'clean
slate' of providers to restore confidence in the quality of education services.
2.57
While supporting the changes, some submissions questioned proceeding
with the amendments before the Baird review of the ESOS Act has reported, since
it is likely to recommend further reforms. The committee notes that these amendments
are intended as a transitional measure to address immediate matters of concern
regarding regulation of the industry. Longer term issues will be considered by
the review of the ESOS Act being undertaken by Mr Baird. The committee looks
forward to the outcomes of this review.
Recommendation 4
2.58 The committee recommends that the bill be passed.
Senator Gavin Marshall
Chair |
Senator Gary Humphries
Deputy Chair |
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