College Collapse Hits More Overseas Students

College collapse hits more overseas students

By Heath Gilmore
The Sydney Morning Herald, March 23, 2010

A hospitality college once ranked among Australia's fastest-growing companies has collapsed, leaving more than 750 fee-paying students out of pocket.

The Austech Institute for Further Education, based in Sydney, announced on Friday it was going into voluntary liquidation.

Its closure is part of a shakeout of the sector in which several high-profile colleges have closed and international student enrolments have fallen because of the global financial crisis, a strong Australian dollar and changes to skilled migration policy.

In December the college successfully appealed against a move by state education authorities to deregister it after it enrolled up to 1400 students. It had permission to educate only 124 students.

ABC TV's Four Corners last year highlighted the activities of the college in a program devoted to alleged abuses in the education export industry.

The college began in Blacktown in 2002. By 2007-08 turnover from its Ashfield and Liverpool campuses had reached $30.4 million and it was hailed by BRW magazine as one of Australia's 100 fastest growing companies.

A NSW Department of Education and Training spokesman said there were long-standing concerns that Austech had inadequate resources and facilities to meet student needs.

He said the NSW Vocational Education and Training Accreditation Board had tried to protect students' interests but Austech had the board's decisions overturned through the Administrative Decisions Tribunal.

''The board understands that at the time of closure Austech had 765 students studying hospitality diplomas,'' he said. ''The board will support efforts to secure alternative training placements for these students.''

The managing director of Australian Immigration Law Services, Karl Konrad, said the closure was another example of an unmanaged industry that operated like a shelf company, but took millions of dollars of hard earned international student money. ''The question must be asked: where did all this money go?'' Mr Konrad said.

Last month the federal Education Minister, Julia Gillard, announced an extra $5.1 million to cover fee refunds for overseas students when colleges collapse.

The Education Services for Overseas Students Assurance Fund has been under pressure, and more collapses are expected as tighter rules for skilled migration undermine the business model for many colleges.