The recent closure of GrowPro has reignited discussions about the responsibilities and protections afforded to education agents. In a previous article, I explored strategies for better managing agents to prevent issues like those seen with GrowPro. However, one contributor raised a crucial counterpoint—while we often discuss protecting students when an education provider collapses, what about the agents? Should they also be afforded safeguards when a college shuts down?

This question leads to broader considerations about the regulation of education agents and the financial structures governing their commissions. As it stands, education providers must be registered, demonstrate financial viability, and contribute to an insurance fund to protect students in the event of closure. Yet, the education agency sector operates with much less oversight. If we are serious about improving the industry, we must ask whether agents should be subject to similar financial and regulatory scrutiny.

Should Agent Commissions Be Capped?

One potential reform is to regulate agent commissions, limiting them to 5-10% of annual tuition fees, mirroring the commission structures used in the banking sector for brokers. Currently, agents can receive as much as 30-40% in commissions from certain providers, creating a strong incentive for becoming an agent. A standardised commission rate could help bring more transparency and sustainability to the industry. Additionally, payments should only be made once a student commences their studies to prevent financial losses due to student withdrawals or visa refusals.

Should Agents Charge their own fees?

In order to ensure fair compensation for their work, agents could set their own service fees, eliminating incentives for biassed recommendations towards higher-commission institutions. Alternatively, they could receive a standardised finder fee per student instead of a commission-based payment. This method would align more closely with professional service industries, where consultants charge for their expertise rather than relying on commission structures that may influence their recommendations. 

Should Agents Pay an Annual Registration Fee?

Education providers and migration agents are required to pay annual registration fees as part of their compliance obligations. Given the significant role education agents play in student recruitment and their impact on the international education sector, should they also be subject to an annual registration charge? Such an arrangement would ensure that only serious, financially viable agents operate in the market, reducing the number of opportunistic or poorly managed agencies.

Should Agents Maintain an Audited Trust Fund?

In industries like travel and education, businesses handling client funds must maintain audited trust accounts. Given the significant financial transactions that education agents facilitate, introducing a similar requirement for agencies could add another layer of protection. An audited trust fund would provide financial transparency, safeguard student payments, and prevent cases where agencies mismanage money meant for tuition payments. This could be a key step in professionalising the sector.

Sustainability and transparency are needed for the industry

The collapse of education providers often leaves students and staff in precarious situations, but agents—who act as intermediaries in the industry—also face financial risks. A more balanced system of financial viability and accountability from agents would ensure that agents operate within a fair, transparent, and sustainable framework.

What is your opinion?

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