In Confidence. Proposal One: relaxing the eligibility requirements for English language students to undertake part-time work during their studies

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1 Office of the Minister for Tertiary Education, Skills and Employment Office of the Minister of Immigration Cabinet Economic Growth and Infrastructure Committee INTERNATIONAL STUDENTS WORK RIGHTS Purpose 1. This paper puts forward three proposals to relax the conditions under which certain groups of international students are allowed to work during their studies, and one proposal preventing international students from getting a visa to study with the poorest performing education providers. The paper is part of a suite of three Cabinet proposals centred on the New Zealand international education export sector. Executive summary 2. The number of international students in New Zealand declined in 2012 and during the first quarter of 2013, both in terms of overall enrolments and student visa numbers. Enrolment figures for the first quarter of 2013 showed a 10 per cent decline for students in private training establishments (PTEs) across New Zealand compared with the previous year. The loss of students has been concentrated among those doing short courses and enrolled with PTEs. 3. Allowing student visa holders to work can be a powerful marketing tool to attract international students from some markets. This paper therefore puts forward a package of three proposals for expanding work opportunities for international students: Proposal One: relaxing the eligibility requirements for English language students to undertake part-time work during their studies Proposal Two: allowing students doing full-year courses to work full-time during all scheduled course breaks (not just over summer), and Proposal Three: removing the limit on hours of work for students undertaking a master by research or a doctoral degree. 4. New Zealand s key competitor countries have widely varied policies when it comes to international students ability to work, from Australia s very liberal approach, allowing all international students to work, to Britain and Canada limiting work rights almost exclusively to students enrolled at public universities. These proposals will support New Zealand s international competitiveness as an education destination, and contribute to growing the value of the international education export sector. 5. Proposal One is also designed as an incentive for education providers with the highest quality of education provision. Linking immigration benefits with the quality assurance framework established by the New Zealand Qualifications Authority (NZQA) can drive provider quality, which can contribute to the value of the sector by increasing the reputation of New Zealand for high quality education. 6. A fourth proposal also links with the NZQA quality assurance framework, by preventing the grant of new student visas for students enrolling with the lowest-performing education providers. This proposal complements proposals one above and protects the reputation of New Zealand for high quality education. 1

2 Context for international student work rights 7. International students generate revenue for New Zealand and create employment opportunities for New Zealanders, both in the provision of educational services and in associated sectors. The education sector regularly requests the extension of work rights as a means of selling New Zealand as an export education destination in what is a very competitive international market. While students work rights alone cannot drive the growth of a quality export education sector, they have a role to play in maintaining New Zealand s international competitiveness. 8. New Zealand already has one of the highest shares of international students in the population (8.3 per thousand inhabitants in 2010) 1. Any extension of work rights must be balanced against the risks of: attracting students whose main purpose is to work rather than study, and who may breach the conditions of their visa and/or overstay attracting too many students to low value courses, as this does not contribute to sustainable growth in the value of the export education sector reducing the work opportunities of New Zealanders, including students and young jobseekers, and potentially disappointing international students if they cannot find work, or increasing the risk of them being exploited by employers who offer them work that does not meet minimum terms and conditions. Recent decline in international student enrolments 9. The number of international students in New Zealand declined in 2012 and during the first quarter of 2013, both in terms of overall enrolments and student visa numbers. The decline has been concentrated in students doing short courses and enrolled with private training establishments (PTEs). Student visas for courses of less than half a year in 2012 were down by 13 per cent on Enrolment figures for the first quarter of 2013 showed a 10 per cent decline for students in private training establishments (PTEs) across New Zealand compared with the previous year. 10. Recent analysis by the Ministry of Education indicated the decline in enrolments in the PTE sector was related to a range of factors, including the appreciation of the New Zealand dollar up until May 2013, immigration policy changes to maintenance funds requirements and graduate work visas introduced in Changes to graduate work visas, requiring longer or higher study in New Zealand to qualify for post-study work visas, appear to have had an impact on Indian students in particular. However, the loss of students from India was also noticed by competitor countries, with both Australia and the United Kingdom (UK) recording recent declines in enrolments from the subcontinent 2, indicating New Zealand policy settings are not a sole driver of the recent decline in Indian enrolments. International comparisons on international students work rights 11. New Zealand s key competitor countries have widely varied policies when it comes to international students ability to work. Australia is our closest competitor and has the most liberal approach, allowing all international students to work part-time during their 1 Thomas Liebig, Josep Mestres, Julia Jauer, OECD Working Party on Migration Paris, June In Australia in early 2013, Indian enrolments declined by 18 per cent from the same period in The UK reported a 24 per cent decline in Indian enrolments in higher education during 2011/2012. This is proportional with the 21 per cent decline in student visas for Indian students enrolled in year-long courses (i.e. courses that qualify for graduate work visas) 2

3 course and full-time during all term breaks, but strictly regulating education providers ability to enrol international students. The UK also regulates international education providers closely, and further limits eligibility to work during studies to students enrolled with publicly funded providers (with lower work allowances for students enrolled below degree level). Canada limits eligibility to work to students enrolled with public tertiary institutions and some students enrolled in specific degrees at private institutions. The United States (USA) allows on-campus work for degree-level students during their first year, but otherwise closely limits students options to work during their course. Using international student work rights as a quality incentive for education providers 12. The attractiveness of work rights for international students makes them a key marketing tool for education providers. Limiting eligibility for expanded work rights to the highest quality providers may: encourage a shift of students to higher quality providers, and motivate providers with lower quality ratings to strive to improve their performance in order to benefit from the extended work rights. 13. This should enhance New Zealand s reputation as a high quality study destination and, in the medium term, increase the value of export education. 14. The NZQA allocates PTEs, institutes of technology (ITPs) and wānanga into Category 1 to Category 4, on the basis of external evaluation and review (EER). The key difference between the top Category 1 providers and standard Category 2 providers is the confidence rating on the quality of education provision, where NZQA is highly confident in the educational performance of Category 1 providers, and confident Category 2 providers. Universities are quality assured by Universities New Zealand and not subject to the EER. 15. Proposal One, which extend work rights for English language students, would only be available to students enrolled with a university, or with a PTE, ITP or wānanga rated as Category 1 under the EER. This would position the extension of work rights as a clear incentive for the highest performing providers, rather than a general change in policy for all providers. Managing excluded providers Tertiary education providers below the Category 1 threshold 16. Education providers with a Category 2 rating, where NZQA is Confident in their quality, might perceive an incentive for Category 1 providers as a sanction against themselves. They are more likely to protest the link between immigration benefits and education quality assurance ratings. However, EER assessments are not static and Category 2 providers that improve their educational performance may move up into Category 1 and in turn benefit from the incentive. 17. In response to the new immigration incentives, NZQA anticipates that some Category 2 providers may ask NZQA for an early EER. However, it considers that numbers of requests will be limited, based on past experience following introduction of other incentives and the cost of EER to the provider. NZQA is confident it can handle such an increase in requests for EERs to be brought forward. 18. Currently, NZQA EER rules set the frequency for EERs for Category 1 and 2 providers to be at least once every four years. NZQA publishes its EER schedule at least six months in advance. NZQA will consider requests for an early EER on a case-by-case 3

4 basis. NZQA has transparent criteria for consideration of requests for an early EER, including whether sufficient time has elapsed for quality improvement actions by the provider to take effect and whether other education providers would be disadvantaged by re-scheduling. While NZQA has rescheduled EERs for reasons of risk, to date there have been only six requests from providers to have their next EER brought forward (from four Canterbury providers following the introduction of the work rights pilot, and from two providers following the introduction of the English language programme entry rule 3 ). Non-tertiary education providers 19. While the majority of language and tertiary students are enrolled with tertiary institutions, a small number of schools also deliver English language and foundation courses. Schools are subject to quality assurance by the Education Review Office. The provider quality criterion would allow for the Minister for Tertiary Education, Skills and Employment, in consultation with the Minister of Immigration, to nominate a provider as eligible to support extended work rights, where that provider: is neither a university nor subject to the EER, and can demonstrate it provides education delivery of the highest quality. 20. Ministerial decisions would be informed by joint advice from Immigration New Zealand (INZ), the Education Review Office and, where appropriate, the NZQA. Proposal One: work rights eligibility for English language students Current eligibility requirements for English language students work rights 21. English language students in New Zealand (other than in Canterbury, where work rights are already extended) are eligible to work 20 hours per week, if they: are enrolled in a course of at least six months duration, and can demonstrate their English proficiency with an International English Language Testing System (IELTS) level of at least 5.0 (a modest user of English). 22. The English language sector contends that the course length and language proficiency requirements effectively bar language students from accessing part-time work rights. Taking an IELTS test is an expensive process for students, and many coming to learn English in New Zealand may not yet have reached the modest user level. 23. The requirements put New Zealand providers at a disadvantage with our closest competitor country for international education, Australia, where students are eligible for part-time work with any student visa of at least three months, irrespective of their course. New Zealand policies do compare favourably with other key competitor countries (Canada, UK, USA), where work rights are largely limited to students at public institutions, or working on campus only. Proposed new work rights eligibility requirements for English language students 24. The proposal is to: reduce the minimum course length from six months to 14 weeks 3 The English language programme entry rule, which NZQA introduced on 1 January 2013, created an incentive for Category 1 providers in terms of how international students English language proficiency is assessed prior to being accepted into a programme of study. 4

5 remove the language proficiency requirement, and limit eligibility to students enrolled with a university, with a non-university tertiary provider that is rated Category 1 following its most recent EER, or with a nominated provider as described in paragraphs 12 and 15 above. 25. This approach is being trialled in Christchurch under the CWR Initiative, which is in place since August The CWR Initiative is supported by a formal evaluation, and early findings from the first two surveys of participating students inform advice on the benefits, risks and risk mitigation in paragraphs below. 26. The proposal is to roll-out the new requirements nationwide in January 2014, to support the peak international enrolment period of January-April. Impact of provider quality criterion for English language students 27. The proportion of students doing English language courses of at least 14 weeks (the proposed minimum duration) enrolled with a high quality provider has grown from 55 per cent in 2011 to 61 per cent in the year to date, while the proportion at low-quality providers (Categories 3 and 4) went down over the same period. Table One below details the distribution of language students by provider type and quality rating. Table One: proportions of student visas for English language courses by provider type and quality rating, (2013: YTD 16 August) Provider Category YTD Universities 1,442 (19%) 1,342 (21%) 734 (22%) ITP/PTE Category 1 2,764 (36%) 2,322 (37%) 1,315 (39%) ITP/PTE Category 2 1,839 (24%) 1,480 (23%) 816 (24%) ITP/PTE Categories 3 and (8%) 471 (7%) 172 (5%) Provider uncategorised (10%) 703 (11%) 349 (10%) Total 7,629 6,318 3,386 Data based on student visas valid for 19 weeks or longer, as a proxy for course duration of 14 weeks, for students aged 17 and over, by calendar year. 28. The proposed quality criterion would exclude providers rated Category 2, which account for just under a quarter of language student enrolments. Newly registered PTEs, that have no EER until the end of their first year of operation, would also be excluded from this proposal. There are on average up to 15 new PTEs registered every year. 29. The evaluation of the CWR Initiative has not yet assessed any specific impacts on excluded providers. Information from excluded providers will inform the final evaluation report in early However, in line with the extension of work rights being an incentive rather than the new standard policy, the existing eligibility criteria (six-month course and demonstrated IELTS level 5) will remain available to all providers. No provider will lose any existing benefits. 30. The CWR Initiative had a slightly broader quality criterion, and included PTEs, ITPs and wānanga with a three-year audit cycle where the provider had not yet been assessed under the EER. As all providers are expected to have had at least one EER 4 Around 10 per cent of student visas granted for English language courses were linked to providers that were not a university and could not be matched to an EER rating. These may be due to some 60 providers having been through the EER process but the reports not yet being published, data quality, and potentially some students being enrolled with schools. 5

6 assessment before implementation of the proposal, it is not considered necessary to make provision for the former audit process. Benefits of relaxing work rights eligibility for English language students across New Zealand Potential to balance recent decline in student enrolments for language courses 31. Student visa holders made up around one fifth of enrolments in the English language sector in , with 6,400 student visas granted out of 30,000 enrolments. Visa numbers for language courses were down around 16 per cent in 2012 compared with the previous year. 32. While results from the CWR Initiative are inconclusive at this early stage, there is potential for the increased marketing advantage of part-time work rights to balance the recent decline in international student numbers in the English language sector. Based on the early evaluation findings, the availability of work rights appeared to be more important for students from regions other than China (for whom it was only a minor decision factor). This may offer new opportunities to promote New Zealand language courses to emerging markets where the perception of work rights has more importance. Potential to increase the value of the English language export education sector 33. With the added attraction of part-time work rights, a greater number of short-term language students may choose to enrol in longer courses than they might otherwise do as visitors, in order to be able to work. This may increase the proportion of student visa holders in English language enrolment numbers, and increase the individual economic value of these students to the sector. Risks of relaxing work rights eligibility for English language students across New Zealand Employment-related risks to New Zealand s reputation Workplace exploitation 34. Initial findings of the CWR Initiative evaluation indicate that some students were being paid less than the minimum wage and in cash. The majority of students interviewed for the evaluation did not have a written employment agreement and were unclear of their employment rights and entitlements, though the evaluation is not yet completed and interviews were limited to a small number of students only. 35. English language students are more likely to be vulnerable to poor employment practices due to their low levels of English proficiency, which may reduce their understanding of their employment rights and limit their options for finding work. 36. Employment-related risks for international students are mitigated by recent Government initiatives to prevent, investigate and prosecute the workplace exploitation of migrant workers. These initiatives (some of which are specifically targeted at students) will provide better protection from poor employment practices to language students new to the labour market. For example: 5 The remaining 80 per cent were likely visitors or working holidaymakers. Visitor visa holders are allowed to enrol in any course of less than 3 months and a number of Working Holiday visa holders can enrol in courses of less than 6 months. Other work visa holders can also enrol in short courses (less than 3 months) each year their work visa is valid. 6

7 an official website explaining students employment rights and obligations in New Zealand, available in a number of languages, has been well received by students, education providers and other agencies a joint Labour Inspectorate and INZ taskforce has been established focused on addressing exploitation in the hospitality sector in the Auckland region, and INZ has amended its operational policy to protect the immigration status of victims of migrant exploitation. This is designed to encourage migrants to report exploitation, even if they are working unlawfully. 37. Amendments are also being made to the Immigration Act 2009, as approved by Cabinet [EGI Min (13) 12/6 refers], which will better protect migrant workers, including students. The amendments will: include the exploitation of migrant workers on temporary visas with work conditions (including international students) as an offence against the Act, and make employers who hold a residence class visa liable for deportation if they exploit migrant workers or knowingly employ migrant workers without work rights. Difficulty finding work 38. Early evaluation findings from the CWR Initiative suggest a significant proportion of international students (two out of five) eligible to work under the Initiative looked for work but were unable to find a job. A smaller proportion (a quarter) did find work, and another two out of five students did not look for work. 39. The difficulty in securing work may become an issue if new student markets are actively targeted on the basis of work rights and more language students choose to study in New Zealand based on the expectation of being able to work part-time to support themselves. Ensuring student expectations are managed, through both Government and provider information provision, would mitigate this risk. More students seeking part-time work may limit opportunities for New Zealand workers 40. Any relaxation of the eligibility criteria for international students to work part time risks affecting employment opportunities for some New Zealand workers. Due to language barriers, English language students are likely to look for low-skilled work and may compete with unemployed New Zealanders, New Zealand students and recent migrants. 41. Recent research by the Ministry of Business, Innovation and Employment did not identify any displacement effect from international students working part-time, including amongst low-skilled workers. Nonetheless, it is important to ensure that changes to policy settings do not lead to an influx of new job seekers limiting opportunities for New Zealand students and other workers, especially with the recent Welfare Reforms. 42. Limiting the extension of work rights to students at Category 1 providers and universities would mean around 3,000 students would enter the labour market, based on current numbers. The majority would be enrolled in short-term courses (a minimum of 14 weeks), meaning their labour market participation would be time-limited. They are not expected to have any significant impact on New Zealand workers employment opportunities. 7

8 Remove Canterbury providers competitive advantage 43. The Canterbury Work Rights (CWR) Initiative was initially put in place for 18 months, to provide a marketing advantage to the Canterbury region over the rest of the country. Introducing the relaxed requirements nationwide before the planned completion of the CWR Initiative at the end of February 2014 would remove this advantage for a short period. However, the CWR Initiative was only one of a number of investments by the Government to support the region s international education sector. Furthermore, the early findings of the evaluation of the CWR Initiative do not suggest that work rights were a strong incentive in students decision to study in Christchurch. Because of these factors, the impact of a nationwide rollout in January on the recovery of the sector in Canterbury is not expected to be significant. Alternative options to introduce relaxed work rights eligibility requirements 44. Two further options for English language students work rights were considered, but are not recommended. The status quo would maintain the marketing advantage for Christchurch, but be of little wider benefit and leave the majority of English language course providers at a disadvantage compared with Australia. Alternately, work rights could be extended to all students enrolled with a satisfactory provider (including both Category 1 and 2 providers). This would benefit more students, but lessen the value of work rights as a quality incentive and increase the risks. Proposal Two: work rights during term breaks for full-year students Current work rights for students undertaking a full-year course 45. In New Zealand, international students (other than language students) may work up to 20 hours a week during their course, and are allowed to work full-time during the Christmas/New Year summer vacation period. Eligible students are those undertaking a course of study of an academic year or longer, including students undertaking a doctoral (PhD) or master by research degree. It also applies to Year 12/13 school students with parental and school permission (school permission is not required for Year 12/13 students who are aged 18 years and over). 46. The ability to work full-time over the summer period applies whether the student has an academic break at that time or not, and cannot be transferred to other times of the year (for example, if their main vacation occurs during the winter). International comparison of work rights during vacations 47. Key competitor countries for international education (Australia, the UK and Canada) have a more open approach to students working full time during scheduled term breaks and vacations. The UK and Canada allow full-time work during all term breaks, but restrict eligibility to students attending public institutions New Zealand, on the other hand, treats students at private and public providers the same way. 48. Of the four countries, Australia has the most generous work rights policy. Any student visa holder attending any type of provider may work full-time when their course is not in session. Direct comparisons with Australian immigration policies, however, need to be tempered by the role played by the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS). The approval of detailed, dated holiday periods for courses that enrol international students is centrally managed through CRICOS, allowing Australia s immigration policy to be unrestrictive. 49. In New Zealand, PTEs must get accreditation and course approval from NZQA before enrolling international students. The NZQA considers whether the length and timing of the vacation is suitable, with fewer details of dates recorded for immigration purposes. 8

9 Proposed new work rights during term breaks 50. The proposal is to allow full-time work during all scheduled vacations for students who are enrolled in a course of one academic year with a tertiary education provider. It is not proposed to extend this change to Year 12/13 students, as it is neither appropriate nor effective to attract school students on the basis of work rights. The change is proposed for implementation in January 2014, to support the peak international enrolment period of January-April. 51. The number of students granted student visas for full-year courses as of August 2013 was 16,627, a 13 per cent increase on the total for the 2012 academic year. The 2012 numbers had seen a more modest increase of 2 per cent on The proposal will support this on-going growth trend. Benefits of allowing students to work during all scheduled vacations 52. Allowing students to work during any scheduled vacation would provide parity for those enrolled in courses that do not follow the traditional academic year. A growing number of providers offer rolling enrolments and mid-year student intakes, where students main study break is in winter rather than over the standard summer months. The proposal would mean that students doing this type of course at high quality providers would be able to work during their breaks, irrespective of when such breaks are scheduled. 53. The proposed approach treats all provider types equitably and goes further than competitor countries such as Canada and the UK, where only students at publicly funded providers can work during all vacations. Risks of allowing students to work during all scheduled vacations 54. The key risk from this proposal is that some providers may choose to extend the scheduled vacation periods that are part of their course, in order to attract students on the basis of longer full-time work opportunities. This may in turn lead to an increase in interest from non-genuine students. Compliance could be complicated and more resource-intensive, due to the variety of course structures offered by PTEs in particular. 55. Programme approval by NZQA does mitigate this risk: a new course would not be approved where vacation breaks are clearly unsuitable for the educational outcomes specified in the application. However, NZQA assessments focus on educational performance rather than measuring immigration risk. 56. The following additional criteria are proposed to mitigate the risk of abuse by providers: amend the definition of an academic year as 120 credits or more for all tertiary providers, with the credit-based definition to be in addition to the current requirement based on length of course (a minimum of two semesters during a period of at least eight months study) but to replace the definition used for certain programmes linked to the number of papers require education providers to include information on scheduled vacations on the Offer of Place for their students enrolling for one academic year or more (the offer of place is given to the student by the provider, and submitted with the student s visa application) allow INZ to decline the extension of full-time work rights for all scheduled vacations to students enrolled at a tertiary provider (other than universities) 9

10 where scheduled vacations are deemed to be excessive, i.e. more than one third of the course duration 6, and encourage tertiary institutions that enrol international students for one academic year or more to include detailed information about scheduled vacations on their website so that employers can easily check when they can legally employ international students on a full-time basis. Alternative options to extend full-time work during vacations 57. Three options were considered to extend full-time work rights during vacation periods, but are not recommended. Specifying which months of the year students can work full time would be easier to monitor, but would arbitrarily leave out certain providers and would not address international competitiveness. Extending full-time work during all breaks for students at publicly funded providers (universities, ITPs and wānanga) would mean international parity with Canada and the UK. However, the majority of international students in New Zealand enrol with private providers and would be excluded from this arrangement. Allowing only students at high quality providers (as for Proposal One) would provide an added incentive for provider quality, but would make the policy more complex for students, education providers and employers. Proposal Three: remove limit on hours worked during study for students undertaking PhD and master by research degrees Context for international postgraduate students in New Zealand 58. It is a goal of the 2011 Leadership Statement for International Education that New Zealand doubles the number of international postgraduate students (particularly in courses in addition to those at PhD level) from 10,000 to 20,000. They are also targeted in the Leadership Statement goal to increase the transition rate from study to residence for students doing bachelor degrees and higher qualifications. 59. The number of international PhD students has grown at a high rate since 2006, but the growth has slowed in the last two years. In 2012, there were: international students enrolled in master by research degrees (up 16 per cent from 2011), and 3,354 international PhD students (up 7 per cent from 2011). Current work rights for postgraduate students 60. The work rights for postgraduate students in New Zealand are the same as all other students doing a full-year course: 20 hours per week during a course and full-time over the summer vacation. 61. Our closest competitor country for international education, Australia, is currently alone in its approach to differentiating between post graduate and undergraduate students. Australia offers PhD and master by research students unlimited work rights during the currency of their visas. 6 NZQA advise that for an academic year, the in-session period for ITPs is usually around 36 weeks and for PTEs 40 weeks, although this can vary. 7 In 2012, there were, in addition, 1,962 students enrolled in other master degrees. 10

11 Proposed extended work rights for research postgraduate students 62. The proposal is to remove the 20 hours per week limit on work rights for international students doing master by research or doctoral degrees, where they are enrolled in a qualification that is awarded by a New Zealand tertiary institution. This would mean that research postgraduate students can work full-time during their course. 63. The proposal is limited to students doing a master degree by research, rather than all master students. Enrolment standards into masters by research (and PhD) programmes are monitored by tertiary institutions and require pre-requisite qualifications, ensuring that only genuine students are accepted. Benefits of extending full-time work for research postgraduate students 64. Offering unlimited work rights may assist New Zealand to compete with Australia for the best students. PhD students already pay domestic fees for study in New Zealand 8. Adding unlimited work rights would create a very attractive package for these students and would likely aid in their settlement, increasing the chance of New Zealand retaining the candidates once they are awarded their PhD. International PhD students appear to have significantly better retention and employment outcomes in New Zealand relative to international fee-paying students overall. 65. The ability to work full-time at any time may also prevent students missing out on work opportunities related to their study. International PhD students appear to be making a positive contribution to New Zealand s education and research reputation. Most of them (81 per cent) are enrolled in subjects which are likely to create a net economic benefit to New Zealand (including Science, Engineering, Commerce, Health, Information Technology and Agriculture). 66. Some students have also faced problems remaining in New Zealand and supporting themselves in the period between submitting their thesis and completing their oral examination (sometimes many months). Being able to work full-time during that period, where they are still enrolled as a student, may assist these students to remain in New Zealand and transition to graduate work visas and residence. Risks of extending full-time work for research postgraduate students Students focusing on work rather than study 67. If allowed to work unlimited hours, there is a risk that students may work more than they study, which could slow their academic progress and jeopardise the successful completion of their qualification. Some students may also be attracted to remaining on a student visa in order to take advantage of full-time work rights. 68. These risks would be mitigated by tertiary institutions responsibility to monitor students progress, in line with academic policies. The attractive work and residence visa options after graduation would also encourage students to complete their degree in order to progress through immigration pathways. Students progress is also regularly checked by immigration officers when students apply for subsequent student visas (i.e. for their second or third year of study), providing further monitoring. Employment-related risks 69. There could be criticism that international students would be competing with New Zealand postgraduate students for limited employment opportunities relating to their 8 Master students pay international tuition fees. International students do not have access to New Zealand student loans and allowances, but may be eligible for some scholarships offered by education providers. 11

12 field of study. However, research to date does not show a displacement effect of student visa holders on New Zealand workers. Postgraduate research students are part of the group of migrants New Zealand seeks to attract and retain long-term highly skilled and with a New Zealand qualification. Being able to look for and secure work in New Zealand is a key part of their successful settlement. Proposal Four: preventing new visas for students enrolled with the lowestperforming providers 70. In order to reduce the risk of harm to the international reputation of New Zealand s export education industry, it is proposed that INZ not grant any new visas to students who seek to enrol at a provider assessed as Category 4 under the EER. Category 4 means that NZQA is not confident in a provider s educational outcomes and/or its capability in self-assessment. Category 4 providers are subject to sanctions by NZQA. 71. As of the end of July 2013, there were only eight PTEs with a Category 4 rating (less than two per cent of New Zealand PTEs). There are no ITPs with a Category 4 rating. It is expected that genuine students who may have enrolled with a Category 4 PTE will instead choose to study with a higher quality education provider. This displacement is likely to impact on smaller PTEs that rely entirely on international students, but the number of PTEs potentially affected is small. A small number of students who may have enrolled with low quality PTEs without genuine intentions to study may also not come to New Zealand at all. 72. This change would be implemented through immigration instructions, to be approved by the Minister of Immigration, and would come into effect from the beginning of Operational impact of provider quality criterion: potential temporary effect on visa processing timeliness 73. The NZQA s EER ratings are not currently recorded in INZ s Application Management System. Linking eligibility for work rights proposals to providers EER ratings is likely to require manual checks, which may delay the processing of applications. Such delays are only expected to be an issue for the short term, until the introduction of the new Immigration Online system. Immigration Online will incorporate EER ratings and allow faster, online application processing. INZ and the NZQA are working on solutions to minimise the impact until the introduction of Immigration Online. Consultation 74. Education New Zealand, the Ministry of Education, the Ministry of Foreign Affairs and Trade, the Ministry of Social Development, the New Zealand Qualifications Authority, the Tertiary Education Commission, the Education Review Office and the Treasury have been consulted. The Department of the Prime Minister and Cabinet has been informed. Financial Implications 75. The costs of these initiatives for the Ministry of Business, Innovation and Employment will be met within baselines. 76. The greater range of options for students work rights may lead to some additional compliance costs for education providers, employers and students. However, these costs are not expected to be significant for any particular stakeholder as the processes necessary for compliance will largely remain the same (for example, an employer asking a student for evidence of their ability to work before employing them). 12

13 Human Rights 77. The proposals are consistent with the New Zealand Bill of Rights Act 1990 and the Human Rights Act Legislative Implications 78. There are no legislative implications arising from the proposals. Regulatory Impact Analysis 79. A regulatory impact statement is not required. Publicity 80. The Minister for Tertiary Education, Skills and Employment, and the Minister of Immigration, will make a joint media release following Cabinet decisions. Recommendations 81. The Minister for Tertiary Education, Skills and Employment and the Minister of Immigration recommend that the Committee: 1. note that international students ability to work during their studies can be a powerful marketing tool to attract students from some markets, and increasing students work rights provides an opportunity to: 1.1. support New Zealand s international competitiveness as an education destination 1.2. contribute to growing the value of the international education export sector 1.3. increase the reputation of New Zealand for high quality education, if linked with existing quality assurance standards Proposal One 2. note that under generic student visa policy, eligibility for part-time work rights of 20 hours per week for English language students is limited to students: 2.1. enrolled in a course of at least six months, and 2.2. who can demonstrate English proficiency at level 5.0 of the International English Language Testing System (IELTS) 3. note that, under the Canterbury Work Rights Initiative (CWR Initiative) launched on 27 August 2012 to attract more students to Christchurch, eligibility for part-time work rights for English Language students was relaxed by: 3.1. reducing the minimum length of course to 14 weeks 3.2. removing the minimum English proficiency requirement, and 3.3. introducing an education provider quality requirement 4. agree that the relaxed work rights eligibility requirements for student visa holders enrolled in English Language courses at recommendation 3 above be extended from Canterbury to all regions in New Zealand 13

14 5. agree that the relaxed work rights eligibility requirement for student visa holders enrolled in English Language courses be subject to the quality criterion defined in recommendation 9 6. agree that the relaxed work rights eligibility requirements at recommendation 3 above become available nationwide from January note that extending work rights to more international students could potentially impact on employment opportunities for New Zealand workers 8. agree that existing eligibility criteria, at recommendation 2 above, will remain in place for all providers Provider Quality Criterion 9. agree that the education provider quality criterion in recommendations 3.3 and 5 above limit extended work rights to student visa holders enrolled with a tertiary education provider that is: 9.1. a university, or 9.2. an institute of technology, a wānanga, or a private training establishment, where that provider is rated by the New Zealand Qualifications Authority (NZQA) as Category 1 under the External Evaluation and Review (EER), or 9.3. a provider that is neither a university nor subject to the EER, and has been nominated by the Minister for Tertiary Education, Skills and Employment, in consultation with the Minister of Immigration Proposal Two 10. note that student visa holders eligible to work during their course are limited to 20 hours work per week during the academic year, and may only work full-time during the summer vacation period 11. agree that student visa holders enrolled in a course of one academic year with a tertiary education provider be able to work full-time during all scheduled vacations, subject to the conditions set out in recommendation agree that the following changes be made to mitigate immigration and labour risk: an academic year be defined for all tertiary providers as 120 credits or more, with the credit-based definition to be in addition to the existing time-based definition (that is, a minimum of two semesters during a period of at least eight months study) but to replace the number of papers definition used for some courses information on scheduled vacations be required to be included on the Offer of Place provided by education providers to international students (and submitted with students visa applications), where the student enrols for one academic year or more Immigration New Zealand (INZ) be enabled to decline full-time work rights for all scheduled vacations to students enrolled at New Zealand tertiary institutions (other than universities) where scheduled vacations are deemed to be excessive, that is more than one third of the course duration 9 9 Course duration includes vacation periods as well as in session periods. 14

15 12.4. tertiary institutions that enrol international students for one academic year or more be encouraged to include information on their website, where available, about when their scheduled vacations occur so that employers can easily check when they may legally employ international students on a full-time basis 13. agree that that the extended full-time work rights at recommendation 10 above become available nationwide from January 2014 Proposal Three 14. note that student visa holders enrolled in a Master by Research or a Doctoral degree are subject to the same limited work conditions as other students at recommendation 10 above 15. agree that student visa holders enrolled in a Master by Research or a Doctoral degree, where the qualification 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 Proposal Four 16. note that the poorest performing non-university tertiary education providers are rated by NZQA as Category 4 under the EER, reflecting that NZQA is not confident in either their educational performance or their capability in self-assessment, and subject to sanctions by NZQA, and 17. agree that INZ not grant any new visas to students who seek to enrol at a provider rated by NZQA as Category 4 under the EER, from the beginning of Hon Steven Joyce Minister for Tertiary Education, Skills and Employment / / Hon Michael Woodhouse Minister of Immigration / / 15

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