Australia’s HE regulator questions providers’ financial viability

The Tertiary Education Quality and Standards Agency has written to providers about its concern that they do not meet the minimum requirements for financial viability.

Although the letter refers to existing provisions of the Standards and ESOS Act, one letter to a higher education provider, seen by The PIE News, opens with reference to the government’s recent crackdown on international student numbers.

“You may be aware the Australian government is reducing the number of overseas students that can come to Australia to study higher education,” read the letter.

“TEQSA has recently been conducting sector-wide analysis on the impact of reductions of overseas students on providers from a financial perspective,” it continued.

TEQSA is seeking a reply by October 31, looking for information in response to the concern, as well as asking providers to give details of any mitigatory actions to demonstrate their ability to maintain ongoing compliance.

During this week’s Senate Committee hearing for the ESOS Amendment Bill, opposition shadow education minister, Senator Sarah Henderson, brought up the latest TEQSA development while adressing Mukesh Chander, chief executive officer of Imperial Engineering Education.

Chander appeared during the hearing to discuss the impact of being a newly registered provider handed an allocation of just 10 new overseas student commencements under the government’s National Planning Level, despite being given a previous CRICOS limit of 275 earlier in the year.

“With 10 students, we are going to have TEQSA knocking on our door asking about our financial viability. They know that with 10 students we are not going to be financially viable,” said Chander.

“Those letters have already started going out from TEQSA,” confirmed Senator Henderson.

“The government is proposing these shockingly low caps on some private providers in a very discriminatory way… and TEQSA is now writing letters to private providers threatening them, saying that ‘we are concerned that you don’t meet the minimum requirements for financial viability.’”

Chander remarked: “This is a domino effect of giving private providers low limits without understanding the financial consequences.”

Chander warned that the financial viability of his college is now “at stake” while he works around the clock behind the scenes to make sure it is not “caught up in the trap”.

If the limit of just 10 new international student commencements for 2025 is locked in, Chander said the college will need to find additional income streams to continue trading.

Henderson put the claims to TEQSA CEO Mary Russell, to which she confirmed the letter was sent to 10 “high-risk” providers, but highlighted an attachment to the letter it seemed Henderson was unaware of. It stated that providers receiving the letter have been issued a warning letter by the Department of Home Affairs.

Before the hearing was abruptly closed due to a shortage of time, Russell said she would respond fully in notice to Henderson’s question regarding the letters.

As the ESOS Amendment Bill progresses through the Senate, Nick Galatas, of Galatas Advisory, representing the CRICOS Providers Justice Group, has been supporting providers in building a legal case spotlighting the legal flaws of the proposed legislation.

Speaking to The PIE, the Melbourne-based lawyer said of this latest development: “This concern is on point in respect of the legal implications with compliance and therefore registration which I identified and raised with providers at the meetings I held and which informed the principal submission of the submission to [the] Senate Committee I prepared for the providers.”

This law will put providers at risk of non-compliance with their legal obligations and [is] therefore imperilling their registration
Nick Galatas, Galatas Advisory

The group’s submission outlines a number of concerns, including that incoming caps would result in providers being unable to comply with their statutory and regulatory obligations, including the Threshold Standards which the recent TEQSA letters highlights.

“This law, and its method of implementation, places providers at risk of non-compliance with other aspects of the same Act, with which a provider must comply to maintain registration,” said Galatas.

“This law will put providers at risk of non-compliance with their legal obligations and [is] therefore imperilling their registration and threatens the survival of these businesses… That must be a bad law.”

The PIE News has reached out to TEQSA for comment.

The post Australia’s HE regulator questions providers’ financial viability appeared first on The PIE News.