EXPLANATORY STATEMENT
Subject:- Education Services for Overseas Students Act 2000
2009 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 suitable alternative 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 does not provide a refund of course fees or cannot arrange for a suitable alternative course; and
- the student is unable to be 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 54 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 29 January 2009. The Fund Manager must make this information publicly available, in accordance with section 62 of the Act.
The 2009 Contributions Criteria apply from 1 January 2009 – 31 December 2009. This instrument commences on 1 January 2009.
The criteria applies to all non-exempt providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students at any time during 2009. 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 2009. 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 responsible for administering the Act. 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 2009.
Overview
The Education Services for Overseas Students Act 2000 (ESOS Act) was enacted to establish the ESOS Assurance Fund, which protects the interests of overseas students in Australia who may face difficulties in their studies. This legislation was introduced to address the problem of ensuring financial security for overseas students in case their educational providers fail to deliver the agreed courses or refund their fees. The Act requires non-exempt providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students to make annual contributions to the Fund, which is managed by a contracted Fund Manager, PricewaterhouseCoopers. The Contributions Review Panel, established under the Act, determines the annual contributions criteria, which are then made publicly available. The 2009 Contributions Criteria, which apply from 1 January 2009 to 31 December 2009, were set by the Panel on 29 January 2009 and outline the base and additional premiums for providers, taking into account their estimated overseas student fee income for the period and any applicable discounts for having a Primary Assurance Mechanism in place. This process ensures that the Fund can effectively place students in alternative courses or provide refunds when necessary.
Scope and Application
The Education Services for Overseas Students Act 2000 applies to all entities registered on the Commonwealth Register of Institutions and Courses for Overseas Students, excluding those that are exempt under the Act, such as providers administered by a state education authority or those receiving Commonwealth recurrent funding. The Act's scope encompasses the protection of overseas students on student visas or intending overseas students who are studying or about to study in Australia. It is designed to ensure these students are placed in a suitable alternative course or receive a refund if their provider fails to deliver the course for which they have paid, and the provider cannot provide a refund or arrange a suitable alternative course. The Act's jurisdiction is Commonwealth-wide, and its application is overseen by the Fund Manager, currently PricewaterhouseCoopers, who is mandated to publicly disclose the contributions criteria set by the Contributions Review Panel. The 2009 Contributions Criteria, effective from 1 January 2009 to 31 December 2009, establish the base and additional premiums for each provider, calculated based on their estimated overseas student fee income for the specified period. Discounts are available for providers with a Primary Assurance Mechanism in place, and the criteria outline the consequences for non-compliance with the Fund Manager's information requirements.
Key Provisions
The Education Services for Overseas Students Act 2000 (ESOS Act) sets out key provisions regarding the ESOS Assurance Fund, primarily in sections 58 to 65. The Fund is established to protect overseas students who are on student visas or intend to study in Australia. It provides financial protection by either placing a student in a suitable alternative course or, if that is not possible, by refunding the student if the provider does not offer a refund or an alternative course, and the provider’s Tuition Assurance Scheme (TAS) or other primary assurance mechanism is unable to place the student elsewhere. Providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students, excluding those exempt under the Act, must contribute to this Fund annually. The Fund is managed by a Fund Manager, currently PricewaterhouseCoopers.
The obligations under the Act require all non-exempt providers registered on the Commonwealth Register of Institutions and Courses for Overseas Students to contribute to the Fund based on their estimated overseas student fee income for the period from 1 January to 31 December 2009. These contributions are determined by the Contributions Review Panel (Panel), which is established under the Act and consists of ten members appointed by the Minister. The Panel determines the contributions criteria which must be followed by the Fund Manager. The Fund Manager is required to develop draft contributions criteria, which the Panel must either accept or request revisions to, in accordance with section 59 of the Act. Providers must submit the required information to the Fund Manager, and failure to do so may result in consequences as outlined in the Criteria.
There are specific consequences for breach of the Act's provisions, particularly regarding the submission of required information. Section 62 of the Act mandates that the Fund Manager make the contributions criteria publicly available. Failure to comply with the criteria and the obligations set out in the Act may result in civil or criminal consequences. However, the explanatory statement does not detail specific penalties or the maximum penalties for breaches. It is essential for providers to adhere to these requirements to avoid any potential legal repercussions.