Opinion: Is ownership of education agents the real issue?

The latest amendment to the ESOS (Education Services for Overseas Students) Act proposes a significant change: preventing the owners of education agents from also owning an education provider. 

This move, aimed at eliminating potential conflicts of interest, has stirred considerable debate. On the surface, it might seem like a step towards ensuring integrity and transparency within the education sector. However, a deeper look reveals that this amendment may not address the core issues and could potentially create new problems instead.

Education agents play a crucial role in the international education industry. They act as the sales and marketing force for education providers, helping attract and recruit students from around the world. This relationship is not unique to education; we see similar dynamics in various industries. Banks own mortgage brokers, the mining industry owns transport and port facilities, and telecommunications companies own retail stores. These cross-overs are commonplace and typically managed through robust regulatory frameworks rather than outright ownership prohibitions.

The real focus should be on the regulation of the agents or the commissions they receive. Critics argue that offshore agents cannot be effectively regulated, but this is precisely where efforts should be concentrated. A practical solution could be establishing certification or registration requirements for education agents. These agents would need to renew their certification annually, ensuring they meet specific standards and maintain good practices. Education providers could then only accept students from certified agents, ensuring a level of oversight and accountability.

Moreover, regulating the commissions payable to agents could add another layer of transparency. Similar to Tuition Protection Service (TPS) reporting, commissions could be reported annually, providing a clear record of financial transactions and reducing the risk of unethical practices.

The government’s current proposal appears to be an attempt to fix a broken system by adding more fuel to the fire. Instead of addressing the root causes of the problem, it introduces a restriction that could have unintended consequences. For instance, smaller education providers who rely heavily on their relationships with agents might struggle to compete, leading to a less diverse and competitive market.

Fundamentally, strong regulatory mechanisms should take precedence over ownership restrictions. A more long-term and efficient solution would be to make sure that agents are honest and open no matter what their ownership relationship is. An approach that safeguards students’ interests while encouraging a robust and competitive education market can be achieved through the establishment of certification requirements and the regulation of commissions.

While the government’s goal of removing potential conflicts of interest is commendable, the current amendment might not be the most effective way to achieve this. We need to stop avoiding the real problems and start thinking about solutions that will protect the education sector without limiting its diversity and growth.