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EDUCATION SERVICES FOR OVERSEAS STUDENTS (REGISTRATION OF PROVIDERS AND FINANCIAL REGULATION) REGULATIONS (AMENDMENT) 1994 NO. 154EXPLANATORY STATEMENT
STATUTORY RULES 1994 No. 154
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 regulations amend the existing regulations to take into account amendments made to the principal Act in December 1993 which are intended to strengthen the protection the Act offers to international students pre-paid funds. Included in these amendments is the insertion of section 7A. whereby international education providers are required to be members of a tuition assurance scheme (TAS). The regulations made under section 7A of the Act, and consequential amendments to other regulations, are summarised as follows.
The amendments insert new Part headings in tile Regulations:
• "Part 1 - General" is inserted before regulation 1 and deals with all regulations made under the Act other than those relating to tuition assurance schemes; and
• "Part 2 - Tuition Assurance Schemes" is inserted after regulation 8 and deals with the rules for establishment, approval and operation of tuition assurance schemes.
Regulation 2 (Interpretation)
This regulation is amended to include the following definitions:
• a "company limited by guarantee" and an "unlimited company" as having the same meaning as in the Corporations Law;
• a "TAS" meaning a tuition assurance scheme within the meaning of section 7A of the Act; and
• a "TAS" operator" meaning a company that operates a TAS.
Regulation 8 (Exemptions)
This regulation exempts the providers mentioned in that regulation from the requirements of section 7A as well as sections 6A, 7 and 8 of the Act.
New regulation 9 (Other exemptions - membership of a TAS)
Subregulation 9(1) provides for exemption of a provider who otherwise is not exempt from the requirements of section 7A of the Act under regulation 8, if:
• course money has not been paid, either directly or indirectly, by the student to the provider:
- for example, this would cover situations where there is a contractual agreement between a provider and an employer to provide a course to the latter's employees, and the provider is paid by the employer; or where a course is provided to students who are on fully-paid scholarships or sponsorships.
• there is a written agreement between the provider and the student whereby course money is required to be paid after provision of the course, ie. course money is required to be paid in arrears.
• the course is provided in a State where section 7A of the Act is suspended in accordance with section 9 of the principal Act.
Subregulation 9(2) provides for exemption of a provider who otherwise is not exempt from the requirements of section 7A of the Act under regulation 8, if:
• that provider is unable to become a member of a TAS because of the special nature of the course offered by the provider, or it is unreasonable in the circumstances to expect that provider to be a member of a TAS;
• that provider takes out and maintains an insurance policy in accordance with regulation 15 or obtains a bank guarantee within the meaning of the Banking Act 1959 and that guarantee is in favour of the students and provides the students the same indemnity as the above insurance policy would provide;
• that provider advises the Minister in writing the reasons why the provider is unable to become a member of a TAS or why it is unreasonable to expect the provider to be a member of a TAS; and
• that provider also gives the Minister a copy of the above-mentioned insurance policy or bank guarantee.
Subregulation 9(3) states that, under subregulation 9(2)(c) , written advice to the Minister and a copy of the insurance policy or bank guarantee must be forwarded:
• when a provider applies for registration in relation to a course, if the provider is not yet registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS); or
• before 25 August 1994 if the provider is registered on CRICOS in relation to a course.
The significance of this date arises from section 7A(1) of the Act which states that at the end of 2 months after commencement of section 7A, a provider must at 0 times be a member of a TAS. The proposed regulations would commence on 24 June 1994; two months from that date would be 24 August 1994 and providers who intend to seek exemption from the requirement to be members of a TAS must do so on or before that date.
New regulation 10 (Transitional exemptions from membership of TAS)
This regulation provides for transitional exemptions from membership of a TAS.
If a provider is not exempt from the requirements of section 7A under regulation 8 but has taken substantial steps to become a member of a TAS and is unable to do so before 25 August 1994, and that provider notifies the Minister in writing before 25 August 1994 of the steps taken to become a member of a TAS, that provider is exempt from membership of a TAS until that membership is obtained, or until 30 November 1994.
If a provider is not exempt from the requirements of section 7A of the Act under regulation 8 and the provider is a member of a proposed TAS which has applied for approval before 25 August 1994, but the Minister has not yet approved the TAS, that provider is exempt from the requirements of section 7A until the Minister makes a decision about the TAS.
Part 2 - Tuition Assurance Schemes
New regulation 11 (Establishing a TAS)
Regulation 11 states that in order to comply with section 7A of the Act a TAS must be established in accordance with regulations under Part 2.
New regulation 12 (TAS requirements)
Subregulation 12(a) states that a TAS must be approved in writing by the Minister.
Subregulation 12(b) specifies the obligations of a TAS in circumstances where a student is unable to be placed in equivalent education or training and there are insufficient funds in the notified trust account to refund the student the amount the student is entitled to under sections 6B and 6C of the Act. The amount payable to the student must at least be equal to the difference between what is paid to the student and what the student is entitled to receive under sections 6B and 6C.
Subregulation 12(c) states that a TAS should establish arrangements to ensure that, if a student has paid course money but the course does not commence on the agreed date, or the provider ceases to provide the course at any time after its commencement (ie. the provider defaults), that student has access to equivalent education or training.
If the cost of the equivalent education or training is greater than the amount refunded to the student under section 6B, these arrangements must provide for the student to be paid at least the amount by which the cost of the equivalent education or training is greater than the amount the student is entitled to receive under section 6B.
Subregulation 12(d) states that a TAS must also provide details of the circumstances under which a providers membership of the TAS may he cancelled.
New regulation 13 (TAS operators)
This regulation states that a TAS must be operated by an unlimited company or a company limited by guarantee.
New regulation 14 (Membership. objects and rules of companies operating a TAS)
Subregulation 14(1) states that the memorandum and articles of association of a company operating a TAS must allow providers or providers belonging to a class of providers to be members of a TAS, and must provide for the directors of the company to notify the Minister of any matter that, in the opinion of the directors, would prevent or significantly limit operation of a TAS. It also states that the principal objective of a TAS is to operate in accordance with the regulations and that the rules for operation of a TAS must be consistent with the regulations.
Subregulation 14(2) also states that the memorandum and articles of association of a company limited by guarantee which operates a TAS must provide for that company to take out an insurance policy in accordance with regulation 15 with regard to every student who pays course money in advance for a course offered a member of that TAS.
New regulation 15 (Insurance policy requirements)
An insurance policy taken out by a provider who is not a member of a TAS, or by a TAS which is a company limited by guarantee, must comply with the following:
Subregulation 15(1)(a) states that the policy must indemnify every student who has paid course money in advance and who is entitled to a refund under sections 6B and 6C of the principal Act against the unauthorised use of, or dealing with, course money by a provider or an employee of the provider.
Subregulation 15(1)(b) requires that the insurance policy must identify the students covered by the policy.
Subregulation 15(1)(c) states that the insurance policy must provide that each student who is indemnified by the policy may make a claim against that policy directly to the insurance provider.
Subregulation 15(1)(d) states that the insurance policy must provide for payment to a student covered by that policy and who is entitled to a refund under sections 6B and 6C of the Act, of an amount equal to the difference between what is paid to the student and what the student is entitled to receive under sections 6B or 6C of the Act. As a member of a TAS, the provider should be able to place the student with another member of the TAS. In this case, the insurance policy will pay the student any additional costs incurred by the student in the course of placement with the other provider.
Subregulation 15(1)(e) states that the insurance policy must provide for payment to a student covered by that policy and who is entitled to a refund under section 6B of the Act, an amount equal to the total amount paid by the student for the course and any amount paid to the student under that section, if equivalent education or training is not made available to the student or if the student decides to return to his or her home country instead of accepting the equivalent education or training.
Subregulation 15(1)(f) requires a provider or a TAS operator to pay the premiums for the insurance policy.
Subregulation 15(2) states that if a TAS has arrangements in place that have exactly the same effect in any respect as an insurance policy which complies with subregulation 15(1), the insurance policy that the TAS operator would have to take out does not have to indemnify students in that respect.
New regulation 16 (Application for approval of a TAS)
Under subregulations 16(1) and 16(2) an application for approval of a tuition assurance scheme must he made in writing to the Minister and must provide:
• the name and business address of the TAS operator, including whether the operator is an unlimited company or a company limited by guarantee;
• details of the way in which the TAS will be operated including the ways in which payments will be made to students and arrangements for provision of equivalent education or training as mentioned in regulation 12;
• each provider who is or will become a member of the TAS; and
• each course offered by a member or a prospective member of a TAS.
Subregulation 16(3) states that if an operator of a TAS is required to take out an insurance policy, the TAS operator must lodge a copy of the insurance policy and a written list of the names of each student indemnified by that policy.
Subregulation 16(4) states the application and any other documents must be clearly and legibly printed, typewritten or handwritten and lodged at the principal office of the Department in Canberra.
Subregulation 16(5) states that in considering an application for approval of a scheme, the Minister may request additional information.
New regulation 17 (Approval of a TAS)
This regulation states that the Minister must approve a TAS if it complies with Part 2 of the regulations.
New regulation 18 (Reporting requirements)
Subregulation 18(1) requires a company that operates a TAS to provide the following to the Minister within 60 days after the end of a reporting period:
• the name and business address of provider-members of the scheme;
• the names of the courses provided by each member of the scheme during the period;
• the number of students who paid course money to members of the TAS;
• the number of overseas students for whom equivalent education or training was required to be provided and was provided under the scheme; and
• a copy of any financial statement or directors' report required under the Corporations Law.
Subregulation 18(2) states that the Minister may ask any approved TAS operator in writing to provide further information required to assess continued compliance with Part 2 of the regulations. and the operator must provide that information within a reasonable period (subregulation 18(3)).
Under subregulation 18(4), a company that operates a scheme must advise the Minister in writing within 14 days of any changes in details provided at the time of applying for approval.
Under subregulation 18(5), if a TAS operator rejects a providers application for membership of the TAS, the operator must inform the Minister of the provider's name and business address and the reasons for rejection of the provider's application.
New regulation 19 (Revocation of approval of tuition assurance schemes)
If a TAS ceases to comply with the requirements of Part 2 or regulation 18, the Minister may, under this regulation, revoke approval of the scheme operated by that company.
New regulation 20 (Review by Administrative Appeals Tribunal)
This regulation states that a decision by the Minister not to approve a tuition assurance scheme or to revoke approval of a tuition assurance scheme may be reviewed by the Administrative Appeals Tribunal.
New regulation 21 (Delegation by Minister)
Under this regulation, the Minister may delegate the Minister's powers under these Regulations to an officer of the Department who is in the Senior Executive Service.
The regulations will commence on 24 June 1994.