The “shonks” and “crooks” in the international education industry are the reasons for amending the Education Services for Overseas Students (ESOS) Act, according to the Minister for Education, the Hon Jason Clare MP, in his speech to Parliament yesterday. As we reported (TKN 160524), the Government introduced the first reading of the ESOS Amendment (Quality and Integrity) Bill 2024 in Parliament this week, with the Minister aiming his comments at unscrupulous actors who compromise the integrity of the sector.
TKN has been delving into the Bill, Explanatory Memorandum (EM) and Minister’s speech. In this part we look at what the Bill says about two of the most prominent issues, education agents and enrolment limits. Where possible we have given the rationale for the amendment and posed several questions that the Bill raises.
Education Agents and giving information to registered providers
New definition
- The Bill introduces a new definition for an education agent that is “activity-based”, rather than being in relationship to the provider. While it covers the expected recruitment of students and providing information or advice to overseas students, there is also a broad definition that it is an entity that is “otherwise dealing with overseas students, or intending overseas students”.
The Explanatory Memorandum argues that this approach is because some agents do not have formal agreements with specific providers. If that is the case, then those providers are acting in contravention to Standard 4 of the National Code of Practice, which requires the provider to have a written agreement with its agents. Why hasn’t the Government taken action if they believe this is occurring so widely that they need to change the definition in the Act?
Conceivably, this could lead to some confusion in the future of who a provider argues is an education agent.
Commissions
- The Secretary of the Department of Education may request information from providers about how much agents are being paid in commission, including monetary and non-monetary amounts. Strict timeframes and penalties are also detailed in the Bill.
- Provision is also made in the Bill to apply these amendments before, on or after the commencement of that Division in the Bill, meaning that providers will need to start keeping records immediately.
- “Information about education agent commissions in connection with the recruitment of accepted students” has been added to the information that may be published about education agents. Information about the number of transfers from one provider to another or one course to another is also included.
The Government links the requesting of this information to its strategy in banning commissions from being paid for onshore student transfers.
Providing what has previously been considered commercial-in-confidence information about agent commissions has been spun as a way of providers assessing which agents it should work with for “cost-effective and quality results”, without appreciating the influence providers have on these arrangements. Seeing this information shared across the sector will surely be of concern to many providers.
Ownership
- When a regulator determines whether a provider is ‘fit and proper’ to be registered it will take into account if the provider has any ownership or control, direct or indirect, of an education agent. It will also consider whether an education agent has any ownership or control of the provider, direct or indirect.
- Providers must also notify the ESOS agency if they become an owner or assume control.
Cross-ownership has been of concern for the Government due to reports of collusion and unscrupulous business practices, enabling profiteering from non-genuine students among other things. At the same time, the sector has been wondering how the Government intends to deal with cross-ownership, given some of the current ownership arrangements in the sector. The EM provides guidance that some cross-ownership relationships are appropriate “where there are transparent arrangements”.
Cross-ownership alone will also not necessarily mean a provider would be considered ‘unfit’; it is one of the factors that will be considered.
Enrolment Limits at the provider level
- The Minister may determine an enrolment limit on the number of international students, and this may expressed to apply to the total number, or a combined total of new and continuing students.
- A provider must not exceed its enrolment limits for a year.
- A deadline of 1 September of the year before for the instrument to be in place determining the enrolment limits.
- Providers that exceed their enrolment limit will have their registration automatically suspended for all courses for the year.
- Transitional provisions for 2025 will only apply to new international students that enrol in that year, and allows for the enrolment limits to be set by 31 December 2024.
The devil is in the detail of this change, with the EM noting that the Minister may specify a total enrolment limit “that will apply to class of providers or by giving notice to a provider specifying their enrolment limit”. This means that there may not necessarily be individual limits determined for all 1400 current registered providers. TKN predicts that this could make quality private vocational education and training (VET) providers nervous, if the Government decides to lump all private VET providers into a restricted enrolment limit.
The consequences of automatic suspension are profound. A provider whose registration is suspended will be unable to accept any new international students until the suspension is lifted.
TKN is grappling with how this will all work in practice given:
- How long it will take the Department to consult.
- The timing for student recruitment for the start of the year is done and dusted well before 1 September of the previous year. How long prior to this date will the instrument be in place? And how can they think that 31 December 2024 for 2025 is manageable.
- The uncertainty of visa grants, as well as the delays in grants – how will a provider know how close they will be to their limit?
- Changes in enrolment both prior and post Census in universities can be significant
- The penalties involved. Will providers take a risk mitigation approach and enrol well under their limit, just in case?
Enrolment limits at the course level
- In addition to determining an enrolment limit at the institution level, the Minister may also determine limits at the course level.
- The Bill provides for the Minister for Education to take into account the relevance of courses to Australia’s skills needs when setting enrolment limits. It allows for exemption of certain courses where there is a skills shortage.
- Providers that exceed their enrolment limit will have their registration automatically suspended for the courses covered by the enrolment limit.
The data shows that most students return home after their studies with only a minority staying on to work in Australia. Let’s also not forget that the Government has already announced that it intends to halve Australia’s net overseas migration.
In his blog released prior to the tabling of the Bill, Andrew Norton said it most succinctly, stating that “people who will spend their most of their working lives in non-Australian labour markets should be free to take courses that reflect their own interests and career plans”.
Consultation
The lack of consultation has been a sore point for TKN (see this article among others) and the sector more generally, although the EM provides a long list of bodies that were “regularly engaged” during the development of Parts 1 and 2 of Schedule 1 of the Bill (there are 8 parts).
The Minister makes assurances that he is serious about consultation with the sector to “make sure we get these reforms right”. It is important to note, though, that the consultation is not about the content of the reforms, but rather the “implementation of the powers set out in the bill” (emphasis added).
Minister Clare’s speech also goes on to specify the bodies that will be included in the “broad and continued engagement”, with most peak bodies and the Council for International Education being mentioned. TKN notes that the Minister’s speech writers forgot to include English Australia, although we are certain this was not deliberate.
Check out part two as we continue to unpack the Bill, EM and Minister’s speech.
The first reading of the legislation can be found here.
The explanatory memorandum can be found here.
