Go8 submission to the Government’s Review of the Governance and Administration of the Tuition Protection Service

25 Jun 2015

Introduction

The Group of Eight comprise Australia’s eight leading research universities.  Their performance and reputation as research institutions is vital to the international reputation of Australian higher education sector as a whole. 

Because of their international reputation and their high position in the many global ranking of universities, the Go8 universities together play a critical role in establishing Australia as an attractive higher education proposition among international students seeking overseas study.  As a result, the Go8 universities are themselves responsible for delivering higher education services to a significant proportion of Australia’s international students:

  • In 2013, the Go8 universities enrolled over 78 700 international higher education students, or around one in every three international higher education students in Australia.  (The total figure for enrolled international students rises to over 90 000 when offshore students are taken into account.)
  • The Go8 universities for 49 per cent of international HDR completions in 2013.
  • Students from more than 200 nations came to Australia to study with a Go8 university in 2013.

Even though the Group of Eight plays a major role in establishing Australia’s reputation as a provider of high quality higher education services, the Group is well aware that Australia’s national reputation as a reliable provider of all education services could suffer immense damage from the failure of any education providers that left international students unprotected.   For this reason, and despite the risk of any university going out of business being vanishingly low, the Group recognises the importance of the Tuition Protection Service (TPS) which provides a capacity to assist and support any international students on student visas whose education providers are unable to complete the delivery of their course of study. 

Specific issues

The review of the TPS should acknowledge that its role relates to the protection of Australia’s international reputation as a reliable provider of education services; and that it fulfils this role by offering alternative placements (or, as a last resort, refunds) to international students affected by a default.  The TPS does not, and should not, play any role with respect to domestic students. 

The TPS is an insurance scheme and the events that it may have to deal with should occur irregularly.  Moreover, if the regulatory system for higher education providers is effective, the events with which it will need to deal should be rare, although when they do occur they could be significant in terms of scale and impact.  For this reason it is difficult to provide a considered judgement of the effectiveness of the TPS, since it has been running for a relatively short time, having come into operation on 1 July 2012.  However, there is nothing by way of evidence so far to suggest that the design of the scheme is not sound, and it appears to be a significant improvement on the arrangements it replaced.

Universities participate in the TPS and will take part in any rescue operations that might prove necessary with respect to higher education providers.  However, given the extreme unlikelihood of any university defaulting, the Group would argue that there needs to be a much stronger link between the risks presented by different providers and the costs these providers should carry.

The Group believes that the TPS Advisory Board is necessary.  The funds available to the TPS are not government funds but are the accumulated proceeds of a levy on education providers.  It is reasonable that representatives of those providing the funding have some involvement in its use and distribution, as well as in setting the levy.   This means that all the Board members should have sector knowledge, experience and expertise.  For the same reason, it would seem appropriate that the TPS Director should not be a departmental officer but should be independent of government and clearly acting on behalf of the service stakeholders.

The TPS is an insurance scheme and the monies collected as the levy are there to cope with what may be unpredictable eventualities that occur at irregular and uncertain intervals.  For this reason it is important that, as is generally the case with insurance schemes, the collected monies be invested in an appropriate manner to increase the size of the buffer fund should it ever become necessary to use it.  Investing the funds effectively can help increase the efficiency of the scheme by decreasing the demands on education providers.