International agents are frequently left with cashflow shortfalls by university finance teams delaying payment and disregarding contracts, a group of agents has told The PIE.
Ahead of the panel discussion, “Agents Speak: What they wish universities would do,” at The PIE Live Europe 2024, agents exposed fault lines in financial partnerships and called to be treated as equals in university relationships.
“Some of the British and American universities think that agents operate in a dark world, and I say to them, ‘You’ve vetted us. Once we’re on your approval list, treat us as your partners’,” said said Sadiq Basha, CEO of Edvoy.
University finance teams often don’t understand that agents work for a 15-month pipeline ahead of recruiting students, according to Alex Michel, managing partner at College Contact in Frankfurt.
Furthermore, most institutions don’t pay agents until they receive students’ entire tuition, which can take up to two years to go through. Agents said that contracts are hard to enforce when working across borders, and wait times are particularly acute when students are paying their university tuition in piecemeal instalments.
According to Yinghui Gilbert, director of international partnerships at InterGreat Education Group, best practice would be for universities to agree to pay up to 50% of agent fees by October (for fall enrolment) followed by an instalment plan.
This way, if one student withdraws or doesn’t get their visa, then agents and universities can square up the fees later.
“It’s especially important in Asian countries where you don’t charge your individual student clients an upfront service fee because you solely rely on university commission,” said Gilbert.
However, according to Michel, there is an “inbuilt imbalance” in these relationships and agents have little ability to change agreements which tend to be dictated by institutions.
On one occasion, after recruiting a student for a short-term study program at a university in New York, Michel said she did not receive payment for nine months after the student had received their graduation transcript.
In Australia, students pay tuition at the start of each semester so delays like these are largely avoided.
In addition to long wait times, “there’s a really big difference throughout the year of when we are paid”, said Michel.
“Some 75% of the students that we work with will start in the fall – in August or September – so we get the chunk of our payment between September and December and then basically live off that until the next big cycle comes around.
“So there’s a real reliance on receiving our money, and it’s built into our cash flow system, and if a big partner who owes us a high five-figure payment delays by four weeks that can severely throw us off balance.”
“Especially after Covid, a lot of our reserves are just gone. Right now, we can’t just wait three additional months for a big payment to come in, and I think some finance teams don’t know what consequence that has,” said Michel.
According to Basha, educating finance staff and involving them in partnerships is an important solution to the problems. He also pointed to the internal compliance carried out by Edvoy on top of university vetting systems.
Other options for certification and compliance include agent associations similar to the America International Recruitment Council which promotes ethical international recruitment.
And yet, Gilbert warned of the risk of self-run bodies becoming a “golf club membership scenario” where the association becomes complacent and self-corrupt.
In Bangladesh, the government endorses a non-profit organisation called FACD–CAB which runs compliance and vetting on all of its members, which has been an effective way of rooting out criminal agents in the country.
However, such a model might be unlikely to work in larger countries such as Nigeria where distrust of the government might be high, according to Bimpe Femi-Oyewo, CEO of Edward Consulting.
In such a diverse landscape, there is no one-size-fits-all solution, but there was a strong consensus among the agents that institutions can’t continue to work in silos and must communicate with other countries and agents to make the most of their expertise and global experience – as well as live market intelligence on issues such as currency fluctuations.
- In the upcoming panel at The PIE Live Europe, they hope to impress upon universities the need for equal partnerships and to continue their discussion of how agent relationships can be more productive.
