Attachment C
EXPLANATORY STATEMENT
Subject:- Education Services for Overseas Students Act 2000
2007 Contributions Criteria
Background – ESOS Assurance Fund
Part 5 of the Education Services for Overseas Students Act 2000 (“the Act”) is about the ESOS Assurance Fund (the Fund). Sections 58 to 65 of the Act concern annual Fund contributions.
The Fund was established under the Act to protect the interests of overseas students on student visas or intending overseas students, who are studying or about to study in Australia.
The Fund can be used to place the student in a substitute course, or, failing that, to pay the student a refund in circumstances where:
- a student does not receive a course for which they have paid; and
- the provider cannot arrange for a suitable alternative course or provide a refund of course fees; and
- the circumstances of the case prevent the student being placed in a suitable alternative course by the provider’s Tuition Assurance Scheme (TAS) or other primary assurance mechanism.
All providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students, other than those exempt under the Act (which includes providers that are administered by a state education authority or receive Commonwealth recurrent funding), must pay an annual contribution to the Fund. The Fund is managed by a Fund Manager. The contracted Fund Manager is PricewaterhouseCoopers.
Contributions Criteria
The Contributions Criteria are determined by the Contributions Review Panel (the Panel) which is established under subsection 55(1) of the Act.
Under section 59 of the Act, the Fund Manager must give the Panel a set of draft contributions criteria, which the Panel must either accept without alteration or ask the Fund Manager to revise.
In accordance with section 59 of the Act, the Panel determined the Contributions Criteria on 26 September 2006. The Fund Manager may now make this information publicly available, in accordance with section 62 of the Act.
The 2007 Contributions Criteria apply from 1 January 2007 – 31 December 2007. This instrument commences on 1 January 2007.
The criteria apply to all non-exempt providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students at any time during 2007. The criteria set out the base premium and additional premiums that apply to providers.
Each provider’s contribution is assessed based on their estimated overseas student fee income for the period 1 January to 31 December 2007. Discounts apply to any provider who has a Primary Assurance Mechanism in place; ie, the provider is either a member of a Tuition Assurance Scheme or has in place an indemnity agreement or a bank guarantee.
The Criteria also set out the consequences of a provider not submitting required information to the Fund Manager.
Consultation
The Panel is a 10 member Panel appointed by the Minister for Education, Science and Training. The Act requires that at least 5 of the members must be people who, in the Minister’s opinion, represent the interests of providers who are liable to pay annual Fund contributions. At least 4 of the 5 must be people who, in the Minister’s opinion, represent the interests of providers who are members of tuition assurance schemes. There is consultation with industry regarding Panel appointments.
The Fund Manager developed the draft contributions criteria and the Panel determined the criteria in accordance with the process set out in section 59 of the Act.
Commencement
This instrument commences on 1 January 2007.
Overview
The Education Services for Overseas Students Act 2000 was enacted to address the need for a robust assurance mechanism to protect the interests of overseas students in Australia. This legislation established the ESOS Assurance Fund, designed to provide financial protection for overseas students who may be left without a course if their educational provider fails to deliver the agreed services. Managed by a Fund Manager, in this instance PricewaterhouseCoopers, the Fund ensures that students can either be placed in a substitute course or receive a refund of their fees under certain circumstances. The Act mandates that all providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students, except those exempt by the Act, must contribute to the Fund. The Contributions Review Panel, established under the Act, determines the criteria for these contributions, ensuring a fair and consistent approach to funding the Assurance Fund. The 2007 Contributions Criteria, set by the Panel on 26 September 2006, apply from 1 January 2007 to 31 December 2007 and are based on each provider's estimated overseas student fee income for that period, with discounts available for those providers who have a Primary Assurance Mechanism in place.
Scope and Application
The Education Services for Overseas Students Act 2000 pertains to all providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students, with certain exemptions applying to those administered by a state education authority or receiving Commonwealth recurrent funding. This legislation is designed to protect the interests of overseas students on student visas or intending overseas students, who are studying or about to study in Australia, by establishing the ESOS Assurance Fund. The fund is intended to provide a safeguard for students who may not receive the courses for which they have paid, with the potential for a substitute course placement or a refund under specific circumstances. All eligible providers are required to make annual contributions to the Fund, which is managed by a contracted Fund Manager, currently PricewaterhouseCoopers. The 2007 Contributions Criteria, determined by the Contributions Review Panel, apply to all non-exempt providers for the period 1 January 2007 to 31 December 2007, with assessments based on estimated overseas student fee income and potential discounts for providers with a Primary Assurance Mechanism.
Key Provisions
The main operative sections of the Education Services for Overseas Students Act 2000 (ESOS Act) in relation to the ESOS Assurance Fund include sections 58 to 65, which focus on annual contributions. Specifically, section 58 requires all eligible providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students to make annual contributions to the Fund, except for those exempt under the Act, such as providers administered by a state education authority or those receiving Commonwealth recurrent funding. Section 59 mandates that the Fund Manager must provide the Contributions Review Panel with draft contributions criteria, which the Panel can accept as is or request revisions on. Section 62 allows the Fund Manager to make the finalised contributions criteria publicly available. These sections collectively ensure that the Fund remains adequately funded to support its purpose of protecting the interests of overseas students.
Providers governed by the Act face several obligations and requirements. Primarily, they must make annual contributions to the ESOS Assurance Fund based on their estimated overseas student fee income for the specified period. The amount of their contribution is determined by the base premium and any additional premiums set out in the Contributions Criteria, which are subject to change annually. Providers can receive discounts if they have a Primary Assurance Mechanism, such as being a member of a Tuition Assurance Scheme or holding an indemnity agreement or bank guarantee. Furthermore, providers must submit all required information to the Fund Manager as stipulated in the Contributions Criteria, failure to do so can lead to consequences as outlined in the Criteria.
Breaches of the obligations and requirements set forth in the Act can lead to various civil and criminal consequences. While specific offences and penalties are not detailed in the provided text, it can be inferred that non-compliance with the Act's provisions could result in legal action. The potential consequences might include financial penalties, legal action to enforce compliance, or other regulatory measures imposed by the relevant authorities. The exact nature and severity of these consequences would depend on the specific breach and the applicable laws governing the ESOS Assurance Fund.