As New Zealand Qualifications Authority (NZQA) continues to crack down on private training establishments (PTEs) not making the grade, a murky picture of corrupt and greedy education providers begins to emerge in the media.

While NZQA points out that the vast majority of PTEs are compliant and providing quality education, the organisation has been just as quick to take a hard line against the few that are breaching standards. Perhaps too quick, say some institutions.

The high price of international students

Interestingly, the most recent concerns to emerge around the enrolment of international students at PTEs have little to do with NZQA. The Herald recently exposed several Auckland education providers for offering up to 45 per cent in commission for agents to enrol international students in their schools and one provider, Kingston Institute, that offered 70 per cent.

Andy Leighe, who heads up Kingston’s international department, defends the high rate of commission, and says the 70 per cent was a one-off special offer intended to increase student numbers. Leighe says the information reported in the Herald was unnecessarily and unfairly damning.

He has a right to feel hard done by. Kingston Institute and others are within their rights to offer whatever level of commission they see fit. While Education New Zealand says the normal rate of commission is around 20 to 25 per cent, there is no regulatory body to dictate to providers on this matter. NZQA does not have a guideline for agency rates. After all, they can make their own business decisions.

So the real question is: why are such high rates necessary? Why are institutions struggling to recruit international students? Is the number of international students seeking qualifications from PTEs declining? Is fierce competition driving institutions to offer such high commission rates?

The recent migration trends report released by the Department of Labour earlier this year shows that the number of international students approved to study in the last financial year has decreased by seven per cent from the previous year. The decline forms part of a gradual downward trend since 2002, when international student numbers peaked. Despite a decrease in the very high number of Chinese students a decade ago, China remains the largest source of international students, followed by India and South Korea on 10 per cent.

Dr Richard Goodall, president of AIS St Helens, says, like many others, AIS is finding it hard to keep up with the international competition. The international student market is typically seen as a lucrative boost to economies and countries like the UK, Australia, USA, and Canada typically invest more into the international education market.

Furthermore, the immigration opportunities are not what they once were for those coming to New Zealand. Potential migrants are likely to see a weakened economy that favours New Zealanders for jobs and choose elsewhere to pursue their studies.

Compounding these pressures is the local education agent market, which Goodall describes as “quite savage”. The main regulating factor for the rate of commission appears to be the agents themselves. Unlike immigration agents, education agents are not required to be licensed, leaving a system open to the altruism or greed of the agent. Goodall says there is a strong call to license local education agents to help level the playing field.

As it stands, an education agent could potentially lure a student with the promise of splitting the commission with them.

However, it is important to emphasise that the vast majority are reputable agents, who play an invaluable part in recruiting international students with a genuine interest in their chosen course for institutions with a genuine interest in providing the students with a quality education.

A good example can be found in Education New Zealand’s Specialist Agent training programme, developed several years ago to increase the effectiveness and commitment of agents promoting New Zealand education. The programme also requires a commitment to an ethical agent code of conduct.

Immigration concerns

Perhaps the issue of empty classes may be explained in part by the increasing number of fraudulent student visas, resulting in enrolled students who sought work instead of attending the school.

An immigration agent told the Herald that at least two PTEs were offering him from 70 to 85 per cent commission if he could find foreign students who ‘did not utilise school resources’, meaning students who only require a student visa to remain in New Zealand but do not intend to attend school.

Typically, these students may seek work instead of study. At least eight Chinese on student visas had been found working in a vineyard in Blenheim, despite being enrolled in Auckland training establishments.

This is where the NZQA is not so tolerant. The organisation confirms that an establishment proven to be enrolling non-attending international students may face cancellation of their registration as a training establishment.

NZQA’s hard line

NZQA has certainly wielded its power in the past over such matters. One of the notable incidents was the closure of API Institute of Education in May last year, when staff blew the whistle after over 150 international students gained fraudulent qualifications in less than a year.

Ivy College was forced to close its doors last August after NZQA expressed a lack of confidence in its qualifications. For the same reason, Oxford International Academies was placed in voluntary liquidation in June this year.

Just weeks ago, Ellipse Institute was deregistered for repeatedly failing to keep student fees in its trust account, an action claimed by the school to be an administrative hiccup.

The real victims are the students, many of whom have difficulty in transferring their studies because other institutions will not accept their work, and demand full payment for them to start a new course.

Oxford International Academies (OIA) is a case in point. The affected students struggled to transfer to other institutions. One student reportedly paid $6000 for a New Zealand Institute of Management diploma, which began in March and was due to finish in November. Upon its closure, the student received a partial refund of $3600 based on the amount of the course he had completed. NZQA advised him to apply to an approved provider to complete his studies, but four of the suggested schools insisted on him paying the full amount to start the course again.

Lloyd Quartermaine of NZQA says this particular incident has been resolved and NZQA strives to protect the interests of all students in these circumstances. The student fee protection mechanism means that students shouldn’t be out of pocket in the event their training provider closes.

NZQA does claim to have the students’ best interests at heart when it comes to their fees and education.

As part of its quality assurance processes, NZQA operates an external evaluation and review of each tertiary education organisation, including PTEs. The external evaluation and review process provides an independent judgement of their educational performance and capability in self-assessment. Judgements are reported as highly confident, confident, not yet confident, or not confident. The reviews are initiated through an annual scheduling process: they occur at least once every four years and are increased in frequency if concerns are noted.

Beyond academic and financial concerns, the Ministry of Education has developed a Code of Practice for the Pastoral Care of International Students designed to ensure the wellbeing of students from overseas. While academic concerns remain in the domain of the NZQA, the code sets out standards for advice and care and procedures for making complaints. Code compliance sits within the remit of Education New Zealand.

Too heavy handed?

It seems clear there is a need for quality control measures to be taken with PTEs, but is the NZQA being too heavy handed with some providers?

The recent closure of Ellipse Institute highlights this concern. The institute’s lawyer describes NZQA’s actions as “draconian and wrong”, claiming the students’ money was withdrawn from the trust account for cashflow purposes but covered by insurance; the failure to note this in writing was put down to a clerical error.

An Education Counts case study of an English language PTE reveals a conflict between students’ needs and compliance with government regulations.

“The compliance burdens are far in excess. Really, what we’re trying to do is help the student to move on,” says one representative from the institution. “[I’m caught between] NZQA and TEC and the aspirations of the students.”

The case study gives a clear indication of the NZQA’s presence, but questions whether their reviews are an accurate measure of what is happening within the PTE.

One case study participant makes this point. “We do have staff meetings, and I will probably call the Director of Studies on a regular basis. We don’t record those anywhere. That’s one of the issues. NZQA do audits. … ‘How many meetings do we have? Where’s your documentary evidence?’”

In protecting the students, NZQA appears to be walking a fine line between providing quality assurance and allowing PTEs some flexibility to meet the individual needs of their students.

Dick Cook, from Ames IT Academy, welcomes the presence of NZQA. He believes it is necessary for periodic audits for all tertiary education providers to ensure New Zealand is seen to be maintaining the delivery of quality education.

However, he agrees it is a “fine balancing act” catering for students’ needs and complying with NZQA’s standards. Cook says, as a general observation, that NZQA’s review process appears to favour the more traditional tertiary education providers like universities and institutes of technology and polytechnics (ITPs), where private institutions have different needs and tend to operate quite differently.

The NZQA Quality Assurance Framework does appear to lump PTEs in with wānanga, ITPs, industry training organisations and government training establishments.

Necessary measures

Another Education Counts article says that PTEs may be incentivised to be less inclined to select students with ‘high needs’ as most operate primarily as profit-making businesses. While the pursuit of profits certainly does not equate to poor-quality education, the very nature of the PTE model cannot help but place more onus on the directors and owners to ensure quality education is at the heart of their operation. For this reason, reputable PTEs, like AMES IT Academy, and indeed the vast majority, welcome the NZQA’s presence.

AIS St Helens certainly does. “We had been pressing NZQA to take action on institutions not upholding standards we thought were warranted,” says president, Richard Goodall. In fulfilling the role of whistle blower, AIS felt NZQA was initially slow to act. Goodall says he is pleased that action has finally been taken and the “less desirable operators” made accountable.

Goodall believes it is these operators that are tarnishing the good name of other providers. He says he has discussed with the ITI (Independent Tertiary Institutions) the possibility of being categorised as something other than a PTE.

He has a point. AIS St Helens, a large established operation that has been running for 22 years, offering up to Masters-level programmes, appears to be a vastly different institution to a smaller trades-based training provider. Goodall believes that to the international decision makers – the parents and the students – the categorisation as a PTE is detrimental to AIS, especially given the bad reputation earned through the exposure of non-compliant establishments.

Goodall says AIS invests a lot of resources and time into meeting quality standards and finds it frustrating when other institutions fail to make the same commitment to quality.

If all institutions acted altruistically, there wouldn’t be a problem. But as it stands, the increasingly fragile international student market is dependent on PTEs collectively raising their game. Regardless of whether they need to be fine-tuned to better suit the operation of PTEs, NZQA’s evaluation and review process and other quality assurance measures are an important part of keeping this part of the education sector running smoothly.


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