Commonwealth Numbered Regulations - Explanatory Statements

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EDUCATION SERVICES FOR OVERSEAS STUDENTS (REGISTRATION OF PROVIDERS AND FINANCIAL REGULATION) REGULATIONS (AMENDMENT) 1994 NO. 101

STATUTORY RULES 1994 No. 101

Issued by the authority of the Minister for Employment, Education and Training

Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991

Education Services for Overseas Students (Registration of Providers and Financial Regulation) Regulations (Amendment)

The Education Services for Overseas Students (Registration of Providers and Financial Regulation) Act 1991 (the Act) provides the legislative authority for the registration of all courses offered by Australian education providers to overseas students and for requiring providers to assure the financial security of advance fees paid by overseas students.

Section 19 of the Act provides that the Governor-General may make regulations for the purposes of the Act.

The proposed Regulations make the following amendments to the existing regulations.

Regulation 2 (Interpretation)

The amendments omit the definitions of "administrative fee" and "year" and insert the following definitions:

•       "Course money" and "notified trust account" are defined as having the same meaning as in section 6A of the Act.

•       "Reporting period" is defined as having the same meaning as in section 8 of the Act.

•       "Tuition fees", in relation to a student, is defined as including commission, course enrolment fees and administration fees and, where live-in arrangements are a specific course requirement, the costs of board, lodging and any other domestic services.

Regulation 4 (Amounts not refundable)

This regulation, which deals with non-refundable amounts, is omitted as amendments to the principal Act remove the concept of non-refundable amounts.

Regulation 5 (Refunds of course fees)

This regulation is omitted as sections 6B and 6C of the amended Act deal with refunds to students in the event of either the provider defaulting or the student withdrawing from a course.

Regulation 6 (Allowable cost for provision of a course)

This regulation is omitted and substituted by the following regulation:

(New) Regulation 4 (Withdrawals and payments out of notified trust accounts - tuition fees)

Subregulation 4(1) specifies that subject to subregulation 4(2), the following amounts of pre-paid tuition fees may be withdrawn from a notified trust account:

•       Prior to commencement of a course, a provider may withdraw up to 20% of pre-paid tuition fees.

•       On commencement of a course, a provider may withdraw up to 45% of pre-paid tuition fees. This amount includes any amount previously withdrawn prior to commencement of the course.

•       After commencement of a course, a provider may withdraw the remaining fees from the notified trust account in arrears, on a pro rata basis and no more frequently than once a week.

Subregulation 4(2) states that a provider may not withdraw or pay money out of a notified trust account into which money was paid by or on behalf of a student until the student has been granted a student visa or entry permit under the regulations under the Migration Act 1958.

(New) Regulation 5 (Withdrawals and payments out of notified trust accounts - other fees and charges)

Accommodation and other domestic services:

Subregulation 5(1) states that if money is paid by or on behalf of a student to a provider to cover the costs of accommodation or other domestic services, the provider may withdraw money out of a notified trust account to pay those costs in accordance with the direction of the student to the person providing those services, or to the student or to another person specified by the student. If no such direction has been made by the student, the provider may withdraw money from the trust account for this purpose no more than three months in advance of the period to which the expenses relate.

Surface transport to and from airports:

Subregulation 5(2) states that if money is paid to a provider by or on behalf of a student to cover the costs of transport to and from airports, the provider may withdraw amounts from the notified trust account to cover these costs on or after the day on which the service is provided.

Health insurance:

If money is paid by or on behalf of a student to a provider to pay for the health insurance of the student, subregulation 5(3) allows the provider to withdraw money from the notified trust account to pay either Medibank Private or any other prescribed hospital benefits organisation (as referred to in section 6A of the Act) for the health insurance of the student for the period for which money has been paid.

Compulsory student union fees:

Subregulation 5(4) states that if money has been paid by or on behalf of a student to a provider for the compulsory membership of a students' union or association, the provider may withdraw from the notified trust account money to cover student union membership fees in accordance with the requirements of the student union or association, or on or after the beginning of the relevant term or semester.

Books, equipment and other materials:

If money has been paid by or on behalf of a student to a provider for the purchase of books, equipment or other materials required for the course undertaken by the student, subregulation 5(5) states that the provider may withdraw amounts from the notified trust account to cover this purchase no more than four weeks in advance of the term or semester to which the purchase relates.

Examination fees:

Subregulation 5(6) states that if money has been paid by or on behalf of a student to a provider for the payment of examination fees for a course, the provider may withdraw money from the notified trust account to cover payment of these fees in accordance with the requirements of an external examination authority or no more than four weeks in advance of the examination.

Goods and services not otherwise mentioned:

If money is paid by or on behalf of a student to a provider for the provision of other goods and services not mentioned above, subregulation 5(7) allows the provider to withdraw money from the notified trust account to pay for those goods and services on or after the day on which they were provided or on the due date, whichever is later.

Money payable to student:

Subregulation 5(8) allows a provider to withdraw or pay money out of a notified trust account to make refunds to students in accordance with sections 6B and 6C of the Act.

Interest paid on money in notified trust account:

Subregulation 5(9) specifies that if a provider is entitled to withdraw amounts out of a notified trust account under any of these Regulations, the provider may also withdraw out of the account any interest or other earnings on the account in the same way as the above-mentioned amounts are withdrawn.

(New) Regulation 6 (Course money in arrears)

This regulation exempts a provider from the requirements of section 6A of the Act if there is a written agreement between the provider and a student that course money will be required to he paid to the provider by or on behalf of the student only after provision of the course, or a segment of the course, to which the course money relates.

Regulation 7 (Returns and other information)

Regulation 7(2) prescribes the particulars in the annual return required from non-exempt providers.

Regulation 7(2)(a) requires the annual return to indicate the year to which the return relates. It is amended to replace the reference to a "year" by a reference to a "reporting period". This amendment brings the regulations into accord with amendments to section 8 of the Act which allow providers to adopt an annual return period ending on a date other than 30 June, subject to giving written notice to the Secretary of the Department.

Regulations 7(2)(e) and 7(2)(f) require the annual return to provide specified information about the special account maintained by the provider. These are amended to replace the reference to a "special account" by a reference to a "notified trust account". These amendments bring the regulations into accord with section 6A of the Act which, inter alia, replace a requirement for a special account by a requirement for a notified trust account.

Subregulation 7(3) is omitted.

Regulation 8 (Exemptions)

Regulation 8 is omitted and substituted with the following regulation:

The amended regulation 8 exempts providers who are administered by a State or Territory education authority, or providers who are in receipt of Commonwealth recurrent funding for the provision of education and training, from the requirements of sections 6A, 7 and 8 of the Act.

Schedule 1 (Form)

Schedule 1 is omitted and replaced by an amended Schedule 1.

The amended Schedule 1:

•       replaces the words "special account" with the words "notified trust account";

•       re-orders the details to be submitted on the form;

•       replaces the words "course enrolments" with the words "students in relation to whom course money has been paid into the notified trust account"; and

•       amends the auditor's statement in the Schedule.

Schedule 2 (Exempt providers)

Schedule 2 is a list of individual providers which meet the requirements of regulation 8 and are therefore exempt from the financial requirement of the Act. It is omitted because in practice it has often been interpreted incorrectly and unfairly as a list of "safe" providers, to the commercial disadvantage of providers not included on the list.

The proposed regulations will commence on 1 June 1994.

The Minute recommends that regulations be made in the form proposed.