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Education Services for Overseas Students Legislation Amendment (Tuition Protection Service and Other Measures) Bill 2011

Schedule 3 Pre-paid fees

Part 1 Amendments

Division 1—Main amendments

Education Services for Overseas Students Act 2000

1  After paragraph 4B(2)(b)

Insert:

                     (c)  paragraph 31(a);

2  Section 5

Insert:

pre-paid fees means tuition fees received by a registered provider in respect of an overseas student or intending overseas student, in relation to a study period for a course to be provided by the provider, before the student begins the study period.

3  Section 5

Insert:

study period for a course provided by a provider means the study period for the course set out in a written agreement made by the provider under section 22.

4  After section 21A

Insert:

22   Requirement to provide for study periods

Written agreements to provide for study periods

             (1)  A registered provider for a course for a location must enter into a written agreement with each overseas student or intending overseas student setting out:

                     (a)  the length of each study period for the course for the location; and

                     (b)  the tuition fees for each study period for the course for the location.

             (2)  The agreement may be included in the same document as the written agreement made under section 47B (written agreement about refund).

Requirements for study periods

             (3)  A study period must be no more than 24 weeks long.

             (4)  A course may have only one study period (subject to subsection (3)).

             (5)  A study period for a course may (subject to subsection (3)) be longer than the course.

5  After Division 1 of Part 3

Insert:

Division 2 Pre-paid fees

27  Pre-paid fees

Limit on amount of initial pre-paid fees that may be received

             (1)  A registered provider must not receive, in respect of an overseas student or intending overseas student, more than 50% of the student’s total tuition fees for a course before the student has begun the course.

             (2)  Subsection (1) does not apply if the course has only one study period.

Limit on when remaining tuition fees may be required

             (3)  Once an overseas student begins a course, the registered provider for the course must not require any of the remaining tuition fees for the course to be paid, in respect of the overseas student, more than 2 weeks before the beginning of the student’s second study period for the course.

28   Obligation for registered provider to maintain designated account

Requirement to maintain account

             (1)  A registered provider who receives, in respect of an overseas student or intending overseas student, tuition fees for a course before the student has begun the course must maintain an account in accordance with this section.

Note:          Providers covered by section 31 are not required to comply with this section.

Requirements for designated accounts

             (2)  The account must be maintained with an Australian ADI (within the meaning of section 9 of the Corporations Act 2001 ).

             (3)  The account must be designated as the initial pre-paid fees account.

29   Obligations in relation to designated account money

Requirement to pay initial pre-paid fees received to credit of designated account

             (1)  A registered provider who receives, in respect of an overseas student or intending overseas student, tuition fees for a course before the student has begun the course must pay the fees to the credit of an account maintained in accordance with section 28.

Note:          Providers covered by section 31 are not required to comply with this section.

             (2)  The provider must pay the fees into the account within 5 business days of receiving the fees.

Note:          For the definition of business day , see section 2B of the Acts Interpretation Act 1901 .

Requirement in relation to withdrawing money from account

             (3)  The provider must ensure that, at all times, there is a sufficient amount (the protected amount ) standing to the credit of the account to repay all tuition fees to every overseas student or intending overseas student (a relevant student ):

                     (a)  in respect of whom tuition fees have been paid to the provider; and

                     (b)  who has not yet begun the course that the provider is to provide to the student.

             (4)  An amount may be withdrawn from the account, so as to reduce the balance of the account below the protected amount, only if:

                     (a)  the amount is withdrawn to pay a refund under section 46D, 47D or 47E to, or in relation to, a relevant student; or

                     (b)  both of the following apply:

                              (i)  the provider arranges, under section 46D, for a relevant student to be offered a place in an alternative course at the provider’s expense;

                             (ii)  the amount is withdrawn to pay the alternative provider in relation to the relevant student; or

                     (c)  the amount is withdrawn to pay the TPS Director under section 50C in relation to the relevant student.

Note 1:       Tuition fees of a relevant student cease to be part of the protected amount (and may therefore be withdrawn from the account) once the student begins the course that the provider is to provide to the student: see subsection (3).

Note 2:       There are no limits on withdrawals from the account as long as the balance of the account remains above the protected amount.

             (5)  An amount withdrawn in accordance with subsection (4) must not be more than the amount of the tuition fees received by the provider in respect of the relevant student before the student begins the course.

Account money not available for payment of debts etc.

             (6)  To avoid doubt, the protected amount:

                     (a)  is not available for the payment of a debt of any creditor of the provider, other than as referred to in subsection (4); and

                     (b)  is not liable to be attached or taken in execution under the order or process of a court at the instance of any creditor of the provider, other than as referred to in subsection (4).

30   Regulations

                   The regulations may provide additional requirements in relation to:

                     (a)  tuition fees for a course received by a provider, in respect of an overseas student or intending overseas student, before the student has begun the course; or

                     (b)  accounts maintained under this Division.

Note:          Providers covered by section 31 are not required to comply with regulations made under this section.

31   Exemption from requirement

                   The following kinds of provider are exempt from the requirements in sections 28 and 29 and in regulations made under section 30:

                     (a)  a provider that is administered by a State education authority;

                     (b)  any other provider that is entitled to receive funds under a law of the Commonwealth for recurrent expenditure for the provision of education or training, other than one excluded by the regulations from the scope of this paragraph;

                     (c)  any other provider specified in the regulations.

To avoid doubt, any private corporate body established in connection with a provider covered by paragraph (a) or (b) of this section is not itself, by virtue of that connection alone, a provider covered by that paragraph.

32   Offence

             (1)  A person commits an offence if:

                     (a)  either:

                              (i)  the person is a registered provider; or

                             (ii)  if the registered provider is an unincorporated body—the person is the principal executive officer of the provider; and

                     (b)  the person engages in conduct; and

                     (c)  the conduct contravenes a requirement of section 28 or 29; and

                     (d)  the provider is not covered by section 31.

Penalty:  60 penalty units.

             (2)  To avoid doubt, subsection (1) does not apply if a person contravenes a requirement of regulations made under section 30.

             (3)  Subsection (1) is an offence of strict liability.

Note:          For strict liability, see section 6.1 of the Criminal Code .

Division 2—Consequential amendment

Education Services for Overseas Students Act 2000

6  Section 15A (after the paragraph relating to Division 1)

Insert:

•      Division 2 sets out requirements for providers who receive tuition fees from a student before the student has begun to study with the provider. The provider must keep those fees in a separate account and generally cannot access the fees until the student begins the first study period with the provider.



 

Part 2 Application provision

7  Application

The amendments made by this Schedule apply in relation to any tuition fees for a course that are received, after Division 1 of Part 1 of this Schedule commences, by a registered provider, in respect of an overseas student or intending overseas student, before the student has begun the course.