Tuition Protection Service (TPS) Overview

The Tuition Protection Service (TPS) is an essential framework that ensures international students on student visas receive support when their educational institutions fail to deliver the courses as promised. This service aims to protect students in situations where their education providers either cease operations or do not fulfill their commitments under the Education Services for Overseas Students Act 2000 (ESOS Act).

Key Aspects of the Tuition Protection Service

  1. Provider Obligations

Educational providers have specific responsibilities to their students. If a provider defaults—meaning they close, do not commence a course, or discontinue a course—they are legally obligated to either assist students in continuing their studies at a new institution or to refund any unused tuition fees.

It is important to note that educational providers do not need to actively enroll in the TPS. Their participation is automatic upon registration with the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) and payment of the required annual levy. This levy funds services designed to place affected students into new courses or to provide refunds for unspent tuition fees.

  1. TPS Levy and Fund

The TPS is financed through an annual levy that all CRICOS-registered providers must pay. This levy is calculated based on the size of the provider and the assessed risk of potential default. The funds collected are used to cover the costs associated with placing students in alternative educational programs or refunding any unspent tuition fees. Providers facing potential financial difficulties are encouraged to reach out to the TPS for early guidance and support.

  1. Ongoing Provider Requirements

To maintain their CRICOS registration, educational providers must comply with several requirements established under the ESOS Act. These include maintaining accurate records for each student and adhering to financial regulations, such as not collecting more than 50% of tuition fees before a course begins, unless the student opts to pay more, or if the course duration is 25 weeks or less.

  • Student Records: Providers are required to keep detailed and updated records for each student, which must include current contact details and academic progress. This information needs to be verified every six months.
  • Financial Compliance: Providers (excluding universities, Technical and Further Education institutes, and government schools) must hold pre-paid tuition fees in a designated account until the student begins their course. This “protected amount” ensures that in case of a default, refunds can be issued without jeopardizing the provider’s financial stability. Failure to comply with this requirement can lead to severe penalties.
  1. Provider and Student Defaults

In cases where a provider defaults, they are required to notify both the ESOS agency and the TPS Director within three business days. They must also inform affected students in writing. Within 14 days of the default occurrence, providers must either arrange for students to transition to an alternative course or issue refunds for any unspent tuition fees.

If a student defaults—by either not commencing or withdrawing from a course—the provider must inform the TPS Director within 5 business days. 

  1. Alternative Course Providers

When a provider defaults, the TPS assists students in identifying alternative course options. These alternative programs must be offered by CRICOS-registered institutions, align with the original course in terms of level and field of study, and be located near the initial provider.

Alternative providers must also demonstrate their capability to enroll additional students and must not be subject to any regulatory sanctions. When a student enrolls with an alternative provider, a new Confirmation of Enrolment (CoE) is issued, and the provider may receive payment for any unspent tuition fees. Additionally, students have the option to independently seek out suitable alternative providers.

  1. International TPS Levy Components

The annual TPS levy consists of four components:

  • Administrative Fee: Covers the ongoing administrative costs of the TPS.
  • Base Fee: Ensures that the TPS fund has sufficient resources to address large-scale defaults.
  • Risk Rated Premium: Reflects the provider’s risk factors, including their operational history and compliance record.
  • Special Tuition Protection: Applied only if the fund’s balance falls below its target range.

Providers must submit an annual declaration of their income from overseas student tuition fees, excluding non-tuition fees such as those for books or health insurance.

The TPS collaborates closely with education sector regulators to monitor compliance and minimize the risk of provider defaults, thereby enhancing the protection and support available to international students.

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