English Australia has broadly welcomed TPS, which replaces five previous schemes as it makes it easier for fees to be transferred to alternative providers or back to a student in the event of a refund, and will be mandatory for public as well as private institutions.

However, it says that ELICOS providers could suffer disproportionately from the yet to be determined costs of the scheme, as well as other issues of implementation.

“Student numbers for the English language sector have been declining over the last two years. Providers are operating in a highly competitive environment where any extra costs will have an impact,” English Australia CEO Sue Blundell told The PIE News in an email.

Of particular concern is a stipulation that providers cannot collect fees more than two weeks in advance of the second semester of a course–something Blundell said would leave providers of shorter language courses at greater risk of student default than other providers.

“Universities and vocational colleges charge fees on a semester basis and would usually only require one semester paid in advance. English language college fees are weekly fees and would normally be paid upfront for the whole course, whether 10 weeks or 40 weeks,” she said.

“If an English language college enrols a student for 48 weeks and then they can only take 24 weeks of fees in advance, there is a risk that the student will move to another college after 24 weeks. It also creates difficulties for colleges that charge different rates based on the length of a course.”

She has also raised objections to the blanket application of levies through the scheme. “Our argument was that this kind of constraint on business models should be used as an option for providers identified as high risk, not applied as mandatory across the whole industry,” she told The Australian.

Others have expressed concern that the scheme is being introduced too quickly. While TPS levies will be payable from January 2013, the scheme takes effect from July 1 this year, leaving only four months for the government to begin managing the sector.

“This kind of constraint on business models should be used as an option for providers identified as high risk”

Australian Council for Private Education and Training (Acpet) CEO Claire Field told The Australian: “They’ve got to run that tender, engage someone and make sure they have knowledge and understanding of the sector so that if a college closes with 500 or 1,000 students on July 2, those students are looked after.”

Successful lobbying has provided hope for further compromise. Initially institutions had to report cases of provider default within 24 hours but this has been extended to three business days. Similarly they will now have five business days to report student default instead of the proposed 24 hours.

From the beginning of 2008 to March 2011 there were 54 provider closures across all Australian education sectors, but mostly in the vocational sector, affecting more than 13,000 students.

Blundell blamed the global economic downturn for the most recent closures among English Australia members rather than factors specific to Australia.