Universities Australia Response to the Review of the ESOS Framework Discussion Paper

Universities Australia Response to the Review of the ESOS Framework Discussion Paper October 2014

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Contents Introduction... 2 Streamlining quality assurance agency processes... 3 Review of decisions by quality assurance agencies... 4 Reducing the reporting burden... 4 Minimising Tuition Protection Service requirements... 5 Increasing flexibility in education delivery... 6 Transfer of students... 7 Welfare of students aged under 18... 8 Working with stakeholders to produce a practical and accessible national code and explanatory guide for ESOS... 9 Registration charges... 9 TPS Fund... 9 Conclusion... 10 Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 1

Introduction Universities Australia is pleased to provide the following response to the Reform of the ESOS Framework Discussion Paper. The Education Services for Overseas Students (ESOS) Act is a vital pillar of the quality assurance regime for Australian international education. Though it is the envy of many competitor nations and a hallmark of good practice for consumer protection, aspects of the legislative framework have not evolved to take account of changing pedagogy. Further, the associated regulatory burden grows ever larger, and certain provisions now serve to limit student choice and the capacity of education providers to provide the best options for their students. It will be important for the Review to take a holistic view of the broader policy environment within which the ESOS Act sits and to take into consideration the impact of the Department of Immigration and Border Protection (DIBP) changes to the student visa integrity regime, especially Streamlined Visa Processing. Changes to the ESOS framework must better reflect and take account of the respective risks posed in relation to different institutions. A one size fits all approach is not appropriate. Regulation needs to effectively target and manage identified risk to enable quality assurance agencies to most effectively allocate their limited resources and to ensure good quality providers with strong track records are able to focus their time and resources on delivering high quality education and services to students. The present overly prescriptive restrictions on how students can access online learning or work integrated learning, the restrictions on collecting upfront fees and very short reporting timeframes are anachronistic excesses that respond to risks posed by a minority of low quality providers. This regulatory response has had a significant impact on the majority of good public and private providers by increasing the regulatory burden, reducing flexibility in delivering quality education to students and increasing the cost of compliance. Despite this, the quality assurance agencies are still not able to adequately address problems associated with low quality providers. Universities Australia notes the government s intention to work with the sector over the coming weeks on targeted aspects of the review including student transfers, online delivery, and welfare for students aged under 18 as well as a Super Users Group of PRISMS experts to address some of the data and reporting proposals. Universities Australia looks forward to participating in these targeted discussions to tease out some of the issues and explore potential solutions. Universities Australia appreciates the collaborative and consultative approach of the Department of Education in relation to the review of the ESOS framework. We have been engaged in formal and informal consultations with the Department of Education since February 2014, and officers of the Department have attended several meetings with the Deputy Vice- Chancellors-International group as the review has progressed. We look forward to working with government over the coming months to finalise the legislative changes needed to support our global, competitive ambition. We support the Review s stated intent to reduce the reporting burden, streamline registration processes and better and more capably meet the changing needs of international students. Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 2

Streamlining quality assurance agency processes Universities Australia supports amendments that seek to reduce the duplication of effort in reporting to quality assurance agencies. 1 Amend the current legislative arrangements to simplify decision making powers and responsibilities by directly providing rather than delegating some powers to TEQSA and ASQA. This will also simplify the registration and assessment process for ELICOS and foundation programs. By streamlining internal operations, it will enable greater flexibility, reduced administration and shorten the decision making timeframes of the national regulators (TEQSA and ASQA). 2 Allow quality assurance agencies to deem compliance with ESOS standards if equivalent domestic standards are met. Universities Australia supports this amendment as it eliminates the need for universities to resupply information for ESOS compliance obligations previously provided for domestic registration. 3 Amend the registration period in the ESOS Act to ensure it allows more flexible registration periods and extensions of registration timeframes, in line with domestic registration timeframes. Universities Australia supports this amendment on the proviso that it supports alignment of registration periods out to the seven year TEQSA registration for universities rather than the shorter 5 year ESOS registration period. Ideally this would include an extension of up to two years to align with TEQSA registration periods as required. Transitional arrangements may be required. 4 Provide a check and balance power to the Minister responsible for ESOS to direct TEQSA and ASQA in relation to the performance of their functions and the exercise of their powers under the ESOS Act, in consultation with other relevant ministers where appropriate. Universities Australia supports this amendment in providing assurance for a more streamlined approach. 5 Amend the ESOS Act and the National Code to enable quality assurance agencies to consider additional relevant material gathered through other registration processes in assessing CRICOS registration. Universities Australia supports this amendment provided universities and other providers are able to provide or substitute additional material to support previously collected material as appropriate. 6 Amend the ESOS Act to increase consistency in compliance and enforcement powers under ESOS and domestic legislative frameworks. Universities Australia supports this amendment as we understand it is at the request of the regulators to enable them to more effectively and efficiently enforce compliance among low quality providers. Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 3

Review of decisions by quality assurance agencies 7 Amend the ESOS Act to allow an education institution to seek an internal review of decisions made by the relevant quality assurance agency prior to application to the Administrative Appeals Tribunal. 8 Require publication of information regarding the quality assurance agency s internal review approach and process. Universities Australia supports these amendments as they will introduce welcome flexibility and transparency to decision making. We understand that these too are at the request of the regulators and aim to ensure sound decision making and review processes without immediate recourse to the Administrative Appeals Tribunal. Reducing the reporting burden 9 Streamline the student default reporting process in PRISMS to align with the 14-day reporting timeframe, consistent with the proposed policy changes to Tuition Protection Service (TPS) (refer to Item C below), to allow easier reporting of student defaults through the student course variation process. Student default reporting to the TPS Director serves no useful purpose. Rather than extend the deadline to 14 days, Universities Australia considers the reporting obligation should be abolished. The risk management approach or proportionality principle that applies to TEQSA should also be applied to the Tuition Protection Service (TPS). Many of the requirements are disproportionate to the risk posed. Approximately 40,000 student defaults have been reported since the TPS began. As at 30 June 2013, only one of these has required the activation of the TPS. This is demonstrably a failure to apply a risk managed approach. This reporting obligation (for student default) for a medium scale university would typically require between one and two full time staff. The TPS is designed to protect international students from a provider failing to supply a course that has been paid for. However, in the university context this outcome is exceedingly unlikely and to our knowledge, no university has ever defaulted in supplying or refunding a course to an international student or providing a refund for a course that has not been supplied. In addition, university governance and financial management requirements ensure that universities are able to mitigate risk and ensure that balance sheets are robust enough to prevent a significant default. In summary, about 60 staff are employed full-time at universities to report to Government on an exceedingly low-risk, potential problem that to date has not occurred, or even been of concern with universities incurring total compliance costs estimated at over $6 million per annum. The proposed PRISMS Super Users Group should consider the utility of all PRISMS reporting including student default. The reporting requirements need to be considered in the context of a risk-managed approach and by giving careful and close attention to what information is Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 4

required, by whom, for what purpose and within what timeframe. Insufficient justification for a 14 day reporting period has been given and would require further examination for it to be supported. 10 Provide data upload facilities and links between PRISMS or CRICOS and other data systems to decrease manual entry and increase data quality. Universities Australia supports the amendment as it has the potential to reduce the double handling of data and thereby reduce errors and the reporting burden for universities. The PRISMS Super Users Group is well placed to identify how this might be done to increase useability. 11 Standardise data elements to assist with data collection and reporting, including utilisation of information provided across different data collection systems. Universities Australia supports the intent of this amendment to streamline data collection but further detail is required. The PRISMS Super Users Group could be tasked with assisting in further developing the operation detail. 12 Remove redundant data items from PRISMS and CRICOS. Universities Australia supports this amendment and again recommends the use of the PRISMS Super Users Group to identify redundancies. Minimising Tuition Protection Service requirements 13 Change the requirement that all education institutions be subject to the 50 per cent limit on the collection of tuition fees prior to commencing a course. Universities Australia supports this amendment and the exemption of universities. Presently the legislation states that, A registered provider must not receive, in respect of an overseas student or intending overseas student, more than 50% of the student s total tuition fees for a course before the student has begun the course. This requirement has added an unintended administration burden due to the word receive. The legislation is designed to prevent the TPS having to repay substantial prepaid funds in the event of provider closure, and was introduced to prevent providers funding current business using the pre-paid deposits of future students, a characteristic of some smaller private VET providers at the time. Publicly funded education providers and many long-established and reputable private providers are highly unlikely to close, let alone close without repaying prepaid tuition fees. Yet this requirement is not moderated by a proportionality or risk managed approach. To address potential concerns of the TPS Director about the abolition of this requirement, Universities Australia suggest that the quality assurance regulators (in consultation with the TPS Director) consider the imposition of a registration condition that only requires providers deemed to be high risk to be subject to the measure. Further, in lieu of an exemption for all providers, Universities Australia suggests changing the word receive to require such that a provider deemed to be high risk cannot ask for or Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 5

require more than 50% of the total tuition fees. This would remove the unnecessary burden and delay for the student who has voluntarily paid more than what was requested. The additional fees paid can be kept on the student s account towards further tuition or be refunded in full. 14 Amend or remove the requirement to maintain a designated account for all education institutions, for instance making it a condition of registration for fewer education institutions. Universities Australia supports this amendment and considers that Australian universities should remain automatically exempted from the requirement. Should there be concern about the removal of this requirement, there may be an option for the regulators in consultation with the TPS Director to impose the maintenance of a designated account for providers deemed to be high risk. 15 Remove requirements to identify study periods in the ESOS Act. Universities Australia supports this amendment and notes that if recommendation 13 is implemented the need to identify study periods in the Act becomes redundant. Increasing flexibility in education delivery 16 Amend the National Code to increase flexibility and discretion in the use and allowable amount of online and distance learning, within visa requirements. Universities Australia notes that this proposal will be considered separately by appropriate experts to develop the detail of the amendment. We would be pleased to work with the Department in developing options for greater flexibility and discretion beyond the 25 per cent cap and the current requirement for international students to study one internal course per compulsory study period. Universities Australia supports this amendment as it seeks to allow greater flexibility for students to benefit from changing pedagogies and increased online study options in line with those available to their Australian peers. More work will be required to strike the appropriate balance in catering to those sectors for whom face-to-face learning is considered essential (schools and ELICOS) and the university and VET sectors where students should have the opportunity to engage in the same manner as their domestic peers especially where it allows for shorter study periods, or access to programs exclusively available online and or at a certain point in time. Greater flexibility is needed for providers to determine the best education outcomes for individual students across a range of contemporary teaching modalities. Further work will be needed to develop an appropriate set of accountability measures to balance flexibility in teaching modalities with the best learning outcomes for students and their course progression. The DIBP should be included in discussions to ensure no unintended problems result from the two-year Australian study requirement for post study work rights. 17 Amend the National Code to broaden the work-based training or work-integrated learning provisions. Universities Australia does not consider that the ESOS framework has a role to play in international students access to work-based training or work integrated learning provisions, Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 6

especially where it seeks to limit that access. The purpose of the current restrictions appear to be based on immigration compliance, rather than educational outcomes or student experience and has prevented some course offerings being made available to international students. If a course has a work integrated learning component (compulsory or optional) international students should be able to access that in the same manner as their Australian peers. Increased employability is a key expected outcome for university graduates and work integrated learning is increasingly becoming a key component of a higher education program. 18 Amend the National Code to allow course progress to be deemed by the relevant quality assurance agency as sufficient for meeting visa compliance requirements where appropriate. 19 Amend the National Code to allow existing practices for monitoring attendance to be deemed to satisfy the requirements under the National Code where appropriate. Transfer of students 20 Amend standard 3 of the National Code to more clearly require a written agreement to include a cancellation (currently refund) policy in the event of a student cancelling an enrolment or transferring to another education institution. Universities currently include cancellation and refund policies in their written agreements. We understand this amendment has been included to underpin the need for student transfer arrangements that require explicit cancellation policies to apply ahead of enrolment. 21 Amend the student transfer process in standard 7. Presently the student transfer process under standard 7 does not work. It is easily avoided by students (and onshore agents and providers) eager to abuse the streamlined visa processing (SVP) model for easy access to a visa, and subsequent study at an alternate provider. Moving the time frame out to 12 months is unlikely to change this. Consideration needs to be given to investigating the impact of SVP on student course transfer. While students should not be prevented from changing where it is in their academic and study interests to do so, change is required to remove the potential for system abuse by some students, providers and agents. In the competitive market of international education, where providers actively seek to attract students from other onshore providers, a policy tension exists between encouraging competitive behaviour and the risk associated with SVP. Under SVP the home provider carries all the visa risk even after a student has transferred with or without a letter of release. Any resolution of Standard 7 has to be considered in the context of SVP and in consultation with the DIBP. Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 7

Standard 7 attempts to restrict the behaviour of providers but compliance is not monitored and there exists no penalties for providers who accept transferring students without a letter of release. Universities Australia welcomes the opportunity to work with Government on the detail of an amendment. Ideally this would entail both financial (to recoup lost recruitment costs) and visa (to offset SVP rorting) penalties for students who transfer providers within a reasonable period. It is vital that this process also includes a suitable consequence for those providers that abuse the system. Universities Australia is pleased that the DIBP has recently commenced a visa integrity campaign which is focussing on provider hoppers and any third parties associated with this practice. 22 Amend standard 4 of the National Code to require education institutions to enter into a written agreement with each education agent whose services it uses (as opposed to each education agent it engages to formally represent it ). Universities Australia opposes this amendment. The current requirement is sufficient as it does not force universities to enter into complicated agreements with agents or sub agents from whom they may only ever receive a single student. As a consequence of SVP, and following existing good practice, universities are investing heavily in their agents through training and relationship management. Forcing universities to expand their agent networks to account for very small student numbers will dilute the resources available for these activities. 23 Consider whether further information on the use of agents should be provided in addition to the current requirement for the publication of agent names and details on an education institution s website and the voluntary requirement in PRISMS for education institutions to give details of an education agent for each enrolment. The PRISMS Users group should give consideration to this amendment and usefulness of compulsory agent listing (given the state of the current agents list). 24 Support an industry driven shared set of principles or code of ethics for education agents. This may include an industry-led system for recognising formally trained, high-quality, ethical and suitably qualified or knowledgeable education agents (rather than a formal registration system). 25 Support more options for training and informing education agents of their obligations to students. Universities Australia would welcome the opportunity to work with the Department on the specifics of these amendments, noting that universities apply high standards for the education and training of agents. Welfare of students aged under 18 26 Amend the National Code to clarify requirements and responsibility for the welfare of international students aged under 18, including clearer references to supervision, Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 8

accommodation as adequate and appropriate, health and well-being, and welfare arrangements. 27 Clarify that responsibility for ensuring appropriate welfare arrangements for a student remains with a provider until the student commences a course with another provider, regardless of the date from which the transfer is accepted. Universities Australia supports this amendment and acknowledges that the detail of this amendment will be the subject of a one day workshop. Working with stakeholders to produce a practical and accessible national code and explanatory guide for ESOS 28 Remove redundant provisions in the National Code. 29 Develop a simpler and clearer explanatory guide and other supporting material for ESOS, in collaboration with stakeholders, with sector-specific examples. 30 Amend the ESOS Act to better reflect the purpose of the National Code, its contents and the changes proposed in this discussion paper. Registration charges 31 Amend the Registration Charges Regulations to include a provision that allows for an exemption from the Entry to Market Charge for a class of education institutions with an appropriate history of education provision and CRICOS registration, and no adverse compliance record. TPS Fund Universities Australia is also seeking changes to the ESOS Act that will enable the TPS Director to earn interest from the funds collected from education providers (the ambition is to have $20 million by mid-2016) to offset the operating costs of the TPS. Presently the TPS Director levies providers monies sufficient to grow and run the fund but is unable to use the monies in the fund to generate income. Should the fund reach its $20 million target, then interest on the fund would be sufficient to pay the annual insurance levy of approximately $500,000. This would lessen the need for high quality, low risk providers to continue to offset risk posed by other parts of the industry. Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 9

Conclusion Universities Australia welcomes this Review and looks forward to working with the Department on the detail of the various amendments over the coming months. Universities Australia Response to the Reform of the ESOS Framework Discussion Paper 10