Summary of Responses to Feedback from Public Consultation on Proposed Revision to EduTrust Pre-Requisites

1.     The Council for Private Education (CPE) thanks the private education institutions (PEIs) and the members of the public for giving suggestions and feedback during the public consultation exercise on the Proposed Revision to the EduTrust Pre-Requisites held from 23 November 2011 to 7 December 2011.

Background

2.     Currently, a PEI has to meet the following pre-requisites to be eligible to apply for EduTrust certification: 

a. Valid registration with the Council for Private Education (CPE);

b. A minimum credit rating of Band 2 according to the credit rating banding shown in Annex A;

c. Implementation of the Fee Protection Scheme (FPS) for all enrolled students;

d. Ensuring that all full-time students have medical insurance coverage that meets the CPE’s minimum requirements[1].

3.     The CPE has reviewed the above pre-requisites and identified revisions in two key areas to enhance student protection, and better distinguish the quality of EduTrust-certified PEIs. The proposed revisions are:

a. To raise the minimum credit rating baseline. Applicants must have a Band 3 credit rating to apply for EduTrust and EduTrust Provisional awards; and a Band 4 rating to qualify for the EduTrust Star award; and

b. To implement the revised FPS, in the form of an additional layer of contingency insurance coverage in addition to the current individualised FPS.

Summary of Feedback and Responses

On Raising the Credit Rating Baseline

4.     Most of the feedback received expressed support for the proposal to raise the credit rating baseline for EduTrust applicants. However, there were concerns that this requirement may over-emphasise the financial standing of a PEI at the expense of its academic quality, and PEIs that are non-profit organisations may be disadvantaged. 

5.     The CPE understands the concerns raised but would like to emphasise that the revised requirements are ultimately to protect the interest of students. The CPE also wants to emphasise that academic quality and financial strength should be seen as mutually reinforcing – a financially strong PEI would be able to offer students better facilities and teachers, as well as better student support services. This would support better academic outcomes that will in turn improve the longer term sustainability of the PEI.  

6.     To allow PEIs sufficient time to put in place the necessary systems and processes, the revised higher credit rating baseline will be implemented on 1 January 2013 for both existing EduTrust-certified PEIs and new applicants.

On the Implementation of the Revised FPS

7.     Although PEIs largely agreed with the intent to protect all students’ fees, they felt that the compliance costs of the revised FPS scheme would outweigh its benefits. The suggestions generally centred around two key points:

a. To allow PEIs that are financially sound to protect students’ fees under a group insurance scheme, or through other means, such as having a banker’s guarantee; and

b. To allow students to choose whether to purchase the contingency coverage, instead of making the scheme mandatory for every student.     

8.     We acknowledge the valuable suggestions provided by PEIs. We are consulting our FPS providers to explore the possibility of replacing the current individualised FPS with a group insurance scheme, with affordable premiums for PEIs and students. The details of the scheme would be released in due course.

9.     The summary of the feedback received, and the CPE’s responses to the feedback, are in Table 1. 

  Annex A - Credit Rating Banding Table.pdf  

  Table 1 - Responses (EduTrust Pre-requisites).pdf