International Education Export Sector: Cover Paper
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1 OFFICE OF THE MINSTER FOR TERTIARY EDUCATION, SKILLS AND EMPLOYMENT OFFICE OF THE MINSTER OF IMMIGRATION The Chair Cabinet Economic Growth and Infrastructure Committee International Education Export Sector: Cover Paper Purpose 1 This paper provides context for the three Cabinet papers on the International Education sector: a. Work rights for international students; English language students work rights Full-time work rights for students during vacations Unlimited work rights for PhD and Master by Research students No new visas granted to study with very low quality providers. b. Legislative amendments related to the pastoral care of international students; and c. Immigration industry partnerships with education providers. Executive Summary 2 International education is important to New Zealand s economic prosperity, cultural and social links with the world. As well as strengthening the education system, international education is expected to contribute to New Zealand s goals for research, innovation, trade and tourism. The partnerships that international education encourages with our major trading partners in Asia, Europe, Latin America and the Pacific are crucial for economic growth, international relations, human capital development and the acquisition of highly skilled people. 3 International education is a significant service export and a key contributor to the Government s Business Growth Agenda. In 2012, international education contributed around $2.5 billion to the New Zealand economy. The Leadership Statement for International Education sets ambitious goals for the sector to achieve by 2025: a. to double the annual economic value to $5 billion through increasing international enrolments in tertiary institutions, private providers and schools; b. increase annual revenues from offshore education services to at least $0.5 billion; c. increase the number of international students enrolled in providers offshore from 3,000 to 10,000; d. double the number of international postgraduate students from 10,000 to 20,000; e. increase the transition rate from study to residence for international students from bachelor level qualifications and above; and f. increase New Zealanders skills and knowledge to operate effectively across cultures. 1
2 4 Meeting these goals will bring an additional $2.3 billion annually to the economy and contribute more widely to the Business Growth Agenda, trade, innovation and research targets. 5 In 2012, there were 92,995 international students enrolments in international education. The tuition revenue earned across the sector amounted to $746 million. The largest number of international students came from China (27 per cent), followed by India (12 per cent). Asian students made up 70 per cent of all international students. In addition, in 2012 a total of 3,354 foreign nationals were enrolled with our universities as domestic students for PhD programmes. 6 International education student enrolments increased up to From 2010 to 2012 New Zealand has seen a decrease in international student enrolments but an increase in international tuition revenues (as shown in Table 1). This increase in value per student was achieved in the context of significant external factors or changes in policy settings. Table 1: International education student enrolments and tuition revenue Measure International fee-paying student enrolments International tuition revenues ($ million) 96,896 99,446 98,660 92,995 $664 $709 $732 $746 7 The following external factors influenced the reduction in international fee paying student enrolments from 99,446 in 2010 to 92,995 in 2012: a. The Christchurch earthquake of 22 February From 2010 to 2012 there was a 57% decline in international enrolments in Canterbury (i.e. from 15,210 to 6,543). b. As the New Zealand dollar has appreciated against the US$ and the currencies of important source countries for international students (China, Korea, Japan and Europe), this may have contributed to the declines in enrolments in unfunded PTEs. c. Enforcement activities run jointly by New Zealand Qualifications Authority (NZQA) and Immigration New Zealand (INZ) during 2012 resulted in four PTEs suspected of being non-compliant with their education and immigration obligations having their visa processing suspended temporarily. 8 Immigration policy settings also changed in a manner consistent with a focus on enhancing the value of international students to New Zealand. These changes may have contributed to the decline in student enrolments in the short-term. a. Post-study work visa changes included limiting eligibility so students doing qualifications below degree-level must have studied in New Zealand for two years. The policy change was expected to result in a decline in students enrolling in oneyear courses at lower levels, where study was being used as quick access to the labour market. It is expected an increase in students enrolling for two year courses should become evident at the start of Not including foreign nationals who were enrolled as domestic students and hence paid domestic student fees. 2
3 b. PTEs and Institutes of Technology and Polytechnics (ITPs) offer the majority of qualifications below degree level, and were more significantly affected by the decline in students enrolling in one-year courses. The decline has not affected all PTEs and ITPs the same way: Category 1 providers saw an 18 per cent increase in student visas for year-long courses between 2011 and c. In addition student visa changes included increasing the amount of funds required for students maintenance during their stay in New Zealand, from $10,000 to $15,000. The previous amount had been set in 2003 and no longer represented the cost of living in New Zealand for a year. 9 Competition for international students is intensifying across the world. New Zealand needs to be competitive in terms of price, quality, ease of access and work-study opportunities while ensuring adherence to our principles of enhancing the value of the contribution of international education to the New Zealand economy. To achieve this, the Government has established the International Education Senior Officials Group (IESOG) to ensure New Zealand remains competitive and can achieve growth while staying strong on our principles. We need to have competitive immigration settings to grow the industry and be able to respond to our competitor countries upping their game as they seek to market their domestic education systems to international students to replace lost domestic student revenue (e.g. USA). Background 10 Economic expansion of many developing countries since the mid-1990s (particularly China, India and Brazil) has driven a steady increase in the international mobility of students. The international student population is projected to continue to grow rapidly over the next 10 years. 11 The international education sector encompasses international students studying in New Zealand, transnational education, international research collaboration, and exporting education knowledge, technology and services. Transnational education is defined as all types of higher education study in which the learners are located in a country different from the one where the awarding institution is based. 12 The greatest revenue is drawn from inbound international students studying with a New Zealand institution. The value of inbound students goes beyond educational services fees to include tourism revenues from students and family visitors, and the potential skills pipeline bought by international students to New Zealand. 13 The government established Education New Zealand, a Crown Agency, to focus the international education sector and take a leadership role in development and growth of the sector. Education New Zealand has a key role in marketing and promotion of New Zealand. Its budget was increased in Budget 2013 by an additional $10 million a year over four years to support industry development including outbound scholarships. Also Education New Zealand is developing, with Ministry of Business, Innovation and Education (MBIE) and the Ministry of Education, a refreshed strategy for growing the sector and ensuring New Zealand retains its competitive position. 14 In New Zealand, the international education sector is highly regulated with respect to education quality, work rights and pastoral care standards. Responsibility for regulation spans a number of agencies including New Zealand Qualifications Authority (NZQA), Ministry of Education, Tertiary Education Commission and MBIE (which includes Immigration New Zealand). Settings across these agencies impact on our competitiveness, and need to be fit for purpose. However, we also recognise that changing settings can have effects elsewhere for example in the labour market. 3
4 15 As mentioned previously, the International Education Senior Officials Group (IESOG) was developed to advise Ministers on policy settings and options for the development of the international education sector. This paper highlights the current issues identified by IESOG that need to be addressed around international student work rights, pastoral care and partnerships in order to maintain New Zealand s competitiveness in the sector. It is important to note that these changes will help ensure New Zealand remains on par with competitors and where appropriate, maintain comparative advantages as we seek to grow our international education industry. Work rights for international students 16 A powerful incentive to attract international students from some overseas markets is the right for student visa holders to work while studying. 17 For New Zealand to remain competitive with other competing countries in the international education sector (Australia, Canada, UK, USA) it is important our work rights for students are seen to be attractive and at least on par with other countries. 18 Any changes to work rights for international students will be guided by the following objectives: a. be used strategically to increase the value of international education; b. incentivise international education providers to strive for higher education standards; c. balance export education competitiveness with the Government s policy of New Zealanders first in the workplace; d. support the goal of the 2011 Leadership Statement for International Education that New Zealand double the number of international postgraduate students; and e. be clearly understood by students and education providers. The following proposals are discussed in the attached papers: English language students work rights 19 Private Training Establishments (PTEs) and English language providers have experienced a decline in enrolments of international English language students, largely due to external factors, such as the exchange rate. 20 To ensure New Zealand remains competitive in a global market and to acknowledge the decline in student numbers, we propose relaxing the eligibility requirements for international students enrolled in English language courses to work part-time. 21 Eligibility will be set so that only students enrolled with a university or with a tertiary provider rated Category 1 under the External Evaluation and Review (EER) will qualify. Full-time work rights for students during vacations 22 Australia, Canada and the United Kingdom (UK) allow full-time work during all scheduled vacations for international students, though Canada and the UK restrict this to students enrolled in publicly funded institutions only. New Zealand is the only country to restrict full-time work rights to students undertaking a course of one year or more and to restrict full-time work rights to the Christmas/New Year summer vacation period. 4
5 23 We propose that full-time work rights for international students during vacation periods be extended to all scheduled vacations for students enrolled for an academic year or more at all tertiary providers regardless of External Evaluation and Review (EER) rating. Unlimited work rights for PhD and Masters by Research students 24 As previously stated, the Leadership Statement for International Education sets the goal to double the number of international postgraduate students from 10,000 to 20,000 by In 2012 there were 597 international students enrolled in Master by Research degrees (up 16 per cent from 2011) and 1,962 international students enrolled in other Masters degrees. In addition, 3,354 foreign national students enrolled in PhD programmes as domestic students (up seven per cent from 2011). 25 There is strong competition globally for the best and the brightest higher degree students. In particular there is strong interest in those students undertaking study in the areas of science, technology and mathematics. 26 We propose that PhD students and students enrolled in a Master by Research degree (a New Zealand qualification that is awarded by a New Zealand tertiary institution) be granted unlimited work rights (that is, may work full-time, anytime) for the term of their visa. No new visas granted to study at very low quality providers 27 In order to avoid damaging the international reputation of New Zealand s international education industry, we propose that Immigration New Zealand not grant any new visas to students who seek to enrol at those few providers assessed as Category 4 (the lowest ranking) under the EER. Legislative amendments related to the pastoral care of international students 28 To support the goals for international education, regulatory support is important to ensure that international students are well cared for and have a positive experience while studying in New Zealand. Perceptions of safety and quality care are an important factor in many students choice of country destination. 29 Under the Education Act 1989 all providers that enrol international students must be signatories of the Code of Practice for the Pastoral Care of International Students (the Code). The Code specifies standards of care and support that international students should receive from providers. 30 A recent review of the Code has revealed some shortcomings in the monitoring, review and auditing processes and a need for better alignment with the wider education quality assurance mechanisms; insufficient clarity on outcomes sought; and dispute resolutions and sanction processes which need improvement as to better protect international students. 31 We propose amending the Education Act 1989 to establish a new legal framework for a revised Code, and to establish an independent contract disputes resolution scheme for international students and their education providers, using existing infrastructure. Immigration Industry Partnerships with Education Providers 5
6 32 The industry partnership model proposed for the international education sector is a crossagency model, encompassing education quality assurance systems and immigration outcomes. The aim is to facilitate improved visa processing timeliness by enabling the sharing of risk and responsibility between Immigration New Zealand and its industry partners that is, education providers. 33 Industry partners will be able to choose whether to offer streamlined visa processing to students or request a full Immigration New Zealand (INZ) assessment. If they choose streamlined visa processing, the industry partner will be responsible for satisfying itself that the student: a. has sufficient maintenance funds; b. has genuine intentions to study; c. is choosing an appropriate course; and d. meets all the course entry requirements. 34 The industry partner would be accountable for the immigration outcomes of all its international students through regular monitoring by INZ. 35 INZ intends to roll out a sector-wide industry partnership model in 2015 using the new Immigration Online ICT system. Prior to this an interim pilot model, that will be operational in 2014, will be used as a learning tool and to inform the development of the end model. The pilot will include up to 25 providers from across the sector. INZ is currently working to identify providers who will be invited to participate in the pilot. 36 The industry partnership model will incentivise export education providers to strive for high education standards, select students carefully, and take more responsibility for good immigration outcomes. Education partners will benefit from many of their students visa applications undergoing lower intervention, prioritised processing, swifter decisions and the opportunity to be more internationally competitive. 37 The immigration partnership is initially limited to Category 1 ITPs and PTEs only in order to: a. Incentivise high quality education performance and thereby enhance New Zealand s reputation for high quality education; and b. Minimise immigration risk by risk sharing only with providers who have demonstrated a commitment to high performance. Human Rights 38 The relevant accompanying Cabinet papers address any issues with regards to the New Zealand Bill of Rights Act 1990 and the Human Rights Act Legislative Implications 39 Proposals made in the Pastoral Care for International Students paper requires legislative amendments. It is proposed that these amendments be included in the Education Amendment Bill (No. 2) 2013, which has been given a place on the legislation programme with a category 4 priority. 6
7 40 It is also recommended that the part of the Bill in relation to proposals made in the Pastoral Care for International Students paper come into effect six months after Royal Assent, so as to allow sufficient time to draft the new Code and rules for the disputes resolution scheme, consult the sector, and allow affected education providers to make necessary changes to comply with the new Code and the relevant legislative amendments. Regulatory Impact Analysis 41 The relevant accompanying Cabinet papers address any regulatory impact. Recommendations 42 The Minister for Tertiary Education, Skills and Employment and the Minister of Immigration recommend that the Committee: a. Note the significance of international education as a service export and a contributor to the Government s Business Growth Agenda. b. Note that New Zealand s policies must be in line with key competitors if we are to maintain and increase our market share of international education. c. Note that this paper provides a context for the Cabinet papers on the international education export sector: Work rights for international students (English language students work rights; Full-time work rights for students during vacations; Unlimited work rights for PhD and Master by Research students; No new visas granted to study with very low quality providers); Legislative amendments related to the pastoral care of international students; and Education sector industry partnership project. Hon. Steven Joyce Minister for Tertiary Education, Skills and Employment / / Hon. Michael Woodhouse Minister of Immigration / / 7
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