Getting paid by big companies on time can be one of the most difficult operational challenges for SMEs and the international student recruitment sector is no different.
The PIE recently reported on the boom in commission payments made to agents from UK institutions as enrolment numbers have risen; but what is rarely discussed are the issues that arise from late or non-payment to agents from partner institutions.
Dig a little deeper and timely payments are a frustrating issue for student recruitment agencies who feel they cannot speak out about the issue for fear of losing lucrative contracts.
Approved education agents work directly with academic institutions to recruit and support students on their behalf in a specific global territory. They are paid on a success-based model where they receive a percentage commission once the student has enrolled at the partner institution.
Despite signing legal agreements, partner institutions sometimes exceed their contracted payment terms with these agents, citing bureaucratic procedures as reasonable justification for the delay.
One experienced university partnerships manager based in the UK, who has worked for several leading global agencies, spoke candidly about the problem but wished to remain anonymous, saying “this is something I’ve encountered at many of the companies I’ve worked for”.
“There is a reticence from agents to push on this because of the damage, perceived or otherwise, it could do to the partnership with the HEI,” they said.
“I can sympathise [with universities] in most situations where non-payment has arisen as it is simply an issue of [lack of] resource and I expect that to become more pronounced this year with the massive numbers [of applicants] universities have been dealing with.
“However, that being said, there have been instances where, in previous roles, we were waiting for commission payments for several months, and in one instance over a year, and repeated attempts to contact the institution went unanswered,” the source revealed.
Many British universities have experienced operational delays in admissions in recent times due to a sharp rise in applications. Similar delays might now extend to the legal and financial checks associated with reconciling larger agent invoices and enrolment lists in a timely manner.
The same experience was echoed by other agents who spoke to The PIE on a confidential basis. While payments are clearly an issue, no one wanted to jeopardise their partnerships through negative media attention.
One agency manager revealed one partner has unpaid invoices totalling more than £200,000 dating back to 2019.
“We have tried to settle this issue with the university but there has been a high turnover of staff [in the university] and it is clear that further payment will not be forthcoming,” they said.
“They promise payment within two to three months but the average is now at least four to six months”
Another agency source emphasised the impact payment delays have on operations, saying “some universities can take a long time to settle an invoice”.
“They promise payment within two to three months but the average is now at least four to six months,” they noted.
“This was a real problem in the early years of operation. We are an independent business and we don’t charge students a fee [for our service]. Delays can impact on paying staff wages on time and keeping the business viable from one year to the next.”
While there are ombudsman services in the UK independently adjudicating on student complaints, it is not always clear which organisation would regulate commercial partnerships between universities and agents.
The partnerships manager The PIE spoke to reflected “an ombudsman would be an interesting development”.
“Perhaps a happy medium could be found such as the London Statement to recognise the agents’ ethical responsibility to the students and institutions, but also to include points that go the other way and emphasise the institutions’ responsibility to the agent.”
The London Statement is a multi-country code of ethics for student recruitment agents that was first published in 2012.
BUILA and UKCISA also co-authored a report in 2021 detailing a quality framework for working with education agents, stating “education agents and their contracting HEIs are bound by the UK’s legislative framework including consumer law, data protection, immigration and bribery acts and child protection legislation”.
While emphasis is rightly placed on student consumer rights, ethics and data protection, little is offered by way of protection for agents themselves who take on huge financial risk by working in advance based on promised payments.
BUILA chair, Bobby Mehta, commented on the legal protection for agents through agreements with universities, saying “all agents have the protection of a signed contract with their individual university partners and within these contracts I would expect to see a section on the terms of payment”.
“If this does not exist, then during the contract signing phase the agent should be insisting on agreeing on terms of payment in this contract, which is normal business practice.
“All agents have the protection of a signed contract with their individual university partners”
“Once a contract is signed and in place, if the university partner concerned does not or is unable to then deliver on the agreed terms of payment then the agent concerned can challenge this, legally if necessary,” Mehta continued.
“The sector recognises the importance of best practice in working with their agents, and successful partnerships are the ones which are two way. Engagement with the BUILA code of practice guide for universities, which shares the best examples of working with agents, has been excellent and we will be launching new elements to the quality framework before the end of the year.”
Some global agents request upfront payments from institutions to commence their services. These are usually packaged as marketing expenditure commitments or service agreement fees that are instantly invoiced and negate the risk for working for commission alone.
Newer players such as ApplyBoard, have successfully secured external investment to cover their operational costs while they seek more paid institutional partnerships year on year. Martin Basiri, CEO, recently spoke to the Toronto Star saying, “we are not profitable yet. The money we make is not paying for our business expenses. That’s where investors come in. We believe that if we can help a lot of people, ApplyBoard can pay for itself.”
Are you an agent who has experienced delayed or non-payment issues from university partners and would like to share your views? Contact firstname.lastname@example.org.