Student fee protection - a summary of the policy

Chinese language version - Student fee protection (a summary of the policy)

New Zealand has recently strengthened measures to protect fees paid to private training establishments.

The New Zealand Qualifications Authority's revised student fee¹ protection policy, which became effective from 31 May 2004, is based on these principles and criteria:

• The need for students to be given choice, in a course closure event, between alternative providers, where available, and the choice of receiving a refund of the remaining fees.
• NZQA must be assured of the financial viability of the fee protection supplier.
• A higher level of independence between the fee protection supplier and the PTE.
• With student trust accounts, students should pay funds directly into the trust account.
• A higher level of reporting by PTEs and fee protection suppliers to the Qualifications Authority, to enable closer monitoring of compliance.

The revised policy protects the interests of domestic or international students in a course closure event², and balances the needs of students with the needs of private training establishments (PTEs). (View the full policy in English or Chinese)

All registered PTEs must comply with the policy and protect the fees of all students on all courses (unless exempt³).

What the policy covers

The student fee protection policy covers

• all students
• all payments made to a PTE, including accommodation and living expenses, where applicable⁴
• the protection of academic records.

Any fee refunds ought to go to the person, or organisation that paid the fees, not necessarily the student. This can include parents, charitable trusts and employers.

What the policy does not cover

If students voluntarily withdraw from a course, they may or may not be able to get a refund as this depends on the refund policy set by the provider.

The policy does not apply if students are expelled.

What PTEs should tell students

At a minimum, PTEs should tell students on enrolment

• the amount of fees protected
• what type of fee protection arrangement is in place (see below for the options)
• the relevant people or organisations students should contact if their course, or the PTE closes
• what documents students may need.

In the event of a course closure, PTEs should also tell students

• about any meetings arranged for students affected by a closure so that they know what is being put in place for them
• to consult the Qualifications Authority website (www.nzqa.govt.nz).

PTEs may also provide a link to the website of their fee protection supplier.

Options available

The student fee protection options⁵ available to PTEs include

• deferred payment
• standard trusts
• static trusts
• company guarantees
• bank bonds
• student-based insurance.

PTEs may use more than one student fee protection arrangement as long as the fees of all students on all courses are covered and students understand which covers them.

The transition arrangements (from the old policy to the new) will vary from PTE to PTE. The transition period finishes on 30 June 2004 (see section 39 of the policy for more information).

Other policies PTEs must have

Withdrawals and refunds

The Qualifications Authority also expects PTEs to have withdrawal and refund policies that cover both student and course or PTE withdrawal, in addition to student fee protection arrangements.

These policies and procedures must relate to refunds for student withdrawal within the first eight days (or within two or five days if delivering courses of less than three months to international students), as required by New Zealand's Education Act.

PTEs must also have policies and procedures relating to refunds in the case of

• student withdrawal after the first eight days (or two or five days where applicable). PTEs must also clearly set out the circumstances when a refund would or would not be given
• a PTE voluntarily withdrawing its course or courses.

(View more information about the Qualifications Authority's rules on withdrawals and refunds)

Student records

The student fee protection policy requires all PTEs to have policies and procedures in place to protect student records (e.g. enrolment, attendance, and progress or achievement records). If a closure event takes place, this information, together with ownership of the student records themselves, will pass to the Qualifications Authority on behalf of affected students.

Further information

• Student fee protection policy (in English or Chinese)
• Student fee protection frequently asked questions
• Contact for complaints about a PTE - Complaints kit and form

You may also contact:

Footnotes

1. 'Fees' includes homestay, living costs and other monies paid to or held by the PTE on a student's behalf.
2. A course closure event is defined as when the Qualifications Authority determines the PTE is no longer delivering or capable of delivering the course for which students are enrolled and the provider's own refund policies have failed. This includes students who have enrolled but have not yet started the course.
3. A PTE is eligible for an exemption for a course if the course is of five days, or a maximum of 50 hours' duration or less, or total student fees amount to $500 or less (see section 19 of the policy for more information - in English or Chinese)
4. Where a PTE transfers homestay monies to an accommodation company owned or controlled by the PTE, then these monies must also be protected in accordance with the requirements of the student fee protection policy.
5. Student-based bonds and collaborative arrangements are also options under the policy. However, as at 10 May 2004, no student-based bond or collaborative arrangement supplier had submitted an arrangement to the Qualifications Authority that met the criteria and principles of the new policy.

Page updated: 11 December 2007