Dean Forbes



Informa University Regulations and Governance Forum,

Melbourne, 21 September 2006.

Professor Dean Forbes

Deputy Vice-Chancellor (International)

Flinders University


The sub-title of this forum is ‘The Regulatory Challenge: Corporate Pressures, Public Values’.  It sums up one of the key questions that hang like an approaching thunderstorm over universities international activities. 

Is it possible to vigorously compete in the global market-place for international students, within the constraints of a regulatory environment that is: shaped by a perception of universities as public institutions; geared to providing social goods; under the direct control, in most instances, of both state and Commonwealth governments; governments that are currently led by political parties at state and Federal level with quite different political agendas? 

History says yes, surprisingly.  The growth of the economic value of international education has been impressive.  Education exports contributed $7.5 billion to Australia’s total national income in 2004.  In 2005 education was Australia’s fourth biggest export, lining up after coal, iron ore, and tourism.

Less surprising is that many countries, including our neighbours, such as Singapore, Malaysia, China and Korea, are seeking out a slice of the market for themselves.  None, at present, operate within a comparably regulated environment in international education. 

Putting the income aside, we must remember that the impact of international education on universities extends well beyond the immediate contribution to exports.  It ensures viability of academic programs, both in coursework and research.  It enhances our students’ global competencies.  And it deepens Australian universities’ engagement in global higher education and research

A dictionary definition of regulation is: Regulate v/t govern by rule; put in order; control by law; cause to function accurately; cause to conform to standard.  Regulation n act of regulating; state of being regulated; prescribed rule, order.  Adj conforming to rule or imposed standard; prescribed by rule or law

Regulation, and Regulationist Theory, have been a preoccupation of recent years.  Governments’ have backed away from their role as direct service provider (as in higher education) and operator of the nation’s economic pump.   They have instead sought, or profess to seek, a lighter touch approach, stimulating, guiding, and protecting standards.  This is not as apparent in higher education as it might be in some other sectors.


With one possible exception, the regulation of international education is a one-way street.  In the last few years universities have had to deal with the development and implementation of some substantial regulatory initiatives, creating new frameworks, or enhancing old ones.

Mt Everest is the review and amendments to the Educational Services for Overseas Students Act (ESOS).  The key document for universities is the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students (The National Code).  After substantial consultation it is now a complete draft and is entering its final phase of public review.

The universities had one core concern about ESOS.  It dealt comprehensively with all onshore international students, and therefore, of necessity, had a one size fits all approach.  This characteristic was then manifest in a number of the detailed concerns such as records of attendance in courses etc.

Other countries may have more regulated higher education sectors, but none has an equivalent to ESOS.  Many governments are now eyeing it off.  I recently met senior staff in the Ministry of Higher Education in Malaysia, and they spoke of ESOS approvingly, and believe Malaysia should follow suit.

Another emerging instrument of regulation is the Transnational Quality Strategy (TNQS), currently being shaped under the auspices of MCEETYA, the joint ministers of education committee.  It will provide a comprehensive framework for Australian education programs taught offshore.

Immigration issues are another perennial factor affecting universities recruitment of international students and forcing them to manage a comprehensive regulatory framework.  Student visas have been a long-standing preoccupation.  The framework currently in use causes far fewer problems than earlier versions, although individual student cases still do often cause angst. Universities also have to deal with the backwash from General Skilled Migration visa issues, although they do not directly impose on university activities, yet.

And that lone act of deregulation (or more accurately re-regulation) I mentioned earlier?  It is, of course, the Higher Education Support Amendment (Abolition of Compulsory Up-front Student Union Fees) Act.  It was widely known as the ‘voluntary student unionism’ act, to the chagrin of the universities, which pointed out most of the money collected was for student services, and just a tiny fraction went to union (ie political) actions.

The final key element of the regulationist framework for international education is AUQA and the state auditors-general.  AUQA’s ‘fitness-for-purpose’ approach leads it to look at broader aspects of internationalization, as well as issues affecting international students.  AUQA teams generally spend a disproportionately large amount of time focusing on transnational programs, I assume because they make choices based on an assessment of risk, and offshore programs are, and should generally be, in a higher category of risk than those run onshore.


The costs of compliance is a good place to start in looking at the impact of regulation on international education at Australian universities.  However there is very little research to document this.  The AVCC contracted Baumber Consulting (2006) to assess the possible costs to universities of a draft of the new National Code.   The report is accessible on the AVCC website.  Based on a sample of the anticipated costs of five universities, it concluded costs for the whole university sector of upwards of $33 million.  It was made up of:

•    Start-up costs of $14.1-$17.4 million.

•    Ongoing annual costs of $11.3-$13.9 million

•    Systems upgrade costs of $8.4-$10.2 million

A significant proportion of the overall implementation costs were based on achieving compliance with Standards 5 and 10, and new costs associated with CRICOS registration.  It should be noted that Standard 10, which was about measuring and reporting attendance, is no longer considered such a burden.

There is no real way of knowing how accurately its estimates were.  Nevertheless, it underlines the point: regulation costs, and more regulation costs even more.

Apart from the costs of compliance, a more fundamental question is does the regulation help or hinder Australian universities global competitiveness?  Does it improve universities ability to respond to commercial imperatives?  Or is it a case of the Telstra syndrome, where endless confusion about regulation for the public good, coming up against the commercial purpose of university international student activities, hampers moving forward?

Debate about the regulation of international education generally centres on quality issues and the sustainability of the size of our international students numbers.  There is no direct evidence, as far as I am aware, of the impact the original ESOS legislation had on the numbers of students coming to Australia, either positively or negatively.

However, universities are acutely aware of the ‘bad apple syndrome’ and the consequences of this, as a result of the New Zealand experience a few years back.  Serious failings among a very small number of education providers soured brand New Zealand. 

Australian universities are mindful of the risks to the reputation of Australian education in general through a similar kind of experience, and hence supported the original ESOS legislation.  The question is: Will the revised ESOS provide a more effective framework?  And will it be at a price that universities, and particularly smaller pre-university education institutions, can afford to pay?

Because universities rely on pathways through smaller institutions such as schools and foundation/languages colleges, they have an interest in what happens in the pre-university institutions.

Similar questions can be asked about the Transnational Quality Strategy.  The idea of the Woolmark for Australian offshore programs has been tossed around for several years.  Because offshore activities occur outside the reach of Australian legislation (though, of course, the Australian operators remain within the reach), the TNQS will necessarily have a lighter touch, relying more on voluntary compliance to principles and on the regulatory arrangements of foreign governments than on the Australian legal environment.

A complicating factor in the overall regulatory environment is balancing the expectations of the Commonwealth and the States.  States have responsibility for monitoring compliance with Commonwealth legislation, so variations between States in terms of interpretation can cause uncertainty.  An example is differences in interpretations of the National Code.  DEST is, itself, frustrated by different interpretations of legislation by the enforcement agencies in the states.

There is also the matter of consistency and coordination between government departments.  A long-standing concern of universities has been the different definitions of full time students used by DEST in its dealings with universities and DIMA in its determinations about student visas.  In the recent negotiations on ESOS the two departments established a mechanism for ensuring that these kinds of inconsistencies do not continue.  I believe the cooperation is occurring, and so I would expect these kinds of hiccups to disappear.

The impact of regulation on our international students is not something we should overlook.  Students have generally been in favour of the bolstering of ESOS because it is seen as improving student rights.  It is harder to gauge the response to the TNQS, partly because it is a work in progress, and partly because the student constituencies are, like the TN programs themselves, spread around Asia and other parts of the world.

A final observation before I move on to the next section.  What would the regulatory regime for international education be like based on the ideas set out in the ALP White Paper on Higher Education, Research and Innovation?  It says that ‘our universities will have the freedom they need to operate competitively’ (p 9).

From an international education perspective, this is a disappointing document.  It has no serious vision of what international education has brought to Australian universities, nor what it can bring in the future.  Instead it concentrates on what is sees as problems and threats.

It breaks no new ground in terms of winding back the regulatory environment.  On the contrary,  AUQA would be reconstituted, and given regulatory and enforcement powers, and the additional role of assessing standards of learning for all providers of education in Australia and Australian programs offshore (p 58).  And it states that the revised ESOS legislation is ‘strong’ but lacking in much other than student compliance to visa conditions, with nothing on standards of learning (p 24).  It might be assumed that it would seek to widen the compass of ESOS.


Managing our more comprehensive regulatory environment requires additional administrative resources and new skills.  There is more work required.  The National Code may only be 27 pages long.  But there will need to be extensive handbooks prepared in order to set out the operational aspects of the legislation, as it applies to all sectors of education, even though our operational practices are quite different.  Many, however, would argue we should not be growing university administrations at the expense of core teaching and research business.  In addition to the quantum of work, new skills are required to perform the work effectively.  Understanding legislative requirements is chief among them. 

University international student-related policies also need to be reviewed and updated to be consistent with the National Code.  In some circumstances new policies will be required.

An example: subclause 19.2 of the ESOS Act broadens the nature of critical incidents affecting students for which a university would be responsible.  This means most universities would have to significantly revamp their critical incidents policies.  This might be a good thing, but it will involve additional work.

Governance arrangements in universities are improving.  University councils are generally reducing in size.  Their composition is changing, and their responsibilities becoming better defined, and more transparently differentiated from the tasks of senior university management.  Two key council tasks have a significant connection to international student programs. First, risk management. International student income is now vital to university budgets, and therefore is a significant area of risk.  And offshore student programs, while generally less profitable, are by definition operating in different environments and are hence more risky.   Second, auditing financial and legislative compliance.

How well have university councils adapted to this new environment?  In my judgement they have been more effective in establishing risk management frameworks, but less effective in coming to grips with legislative compliance, especially for offshore teaching programs.

A greater challenge for universities is to create and sustain a culture within the university that is responsive to the new regulatory frameworks that apply to their activities.  It is one thing to create  quality frameworks, another to create genuinely new campus cultures capable of motivating staff to digest and comply with substantial regulatory detail.  Even though international students are a significant group within universities, they are the principle concern of only a small proportion of university staff. 

Academics, typically, have teaching and learning responsibilities, are under pressure to build and sustain recognised, even world-class, research careers, are expected to have significant community engagement activities, and play a role in the management of the university.  How much time, realistically, does that leave for the burgeoning regulatory framework to manage international students?

With regards to managing regulatory change, another issue is that the same Commonwealth department – the International Education Group, Australian Education International, in DEST – has a dual role in regards to international education.  It is both promoter/facilitator and regulator of international education.  The tasks are allocated to separate branches, but report through the same structure.  This has, from time-to-time, prompted questions.  Can the two roles be adequately contained in one department, or should there be a greater degree of separation between the two functions?

And finally, what of the needs of students?  Students want the protection of a robust regulatory framework.  Do they have it? 

How do we, or they, know?  In a post VSU environment, we have seen in many universities the demise of on-campus international student associations.  Amendments to the legislation allowed universities to continue to charge international students for services over and above their tuition fees.  But in an environment where universities try to treat local and international students as equitably as possible, many universities have delayed imposing the additional charge. 

Without funding for on-campus student associations, and the serious doubts about the sustainability of the national, international student associations, there has been a serious erosion of the support international students need to understand the requirements, and benefits of, the regulatory framework.


“There are no good winds for navigators who don’t know where to go” (Seneca, 4BC-65AC)

I end with three questions.

First, are we sure we know what we are trying to achieve by regulating universities engagement in international education?  Is it the quality of our education programs?  The international student experience?  Our universities reputations?  Or the sustainability of our incomes?  One would hope it is all of those.  But cynics might suggest that other drivers have sometimes infiltrated.  For example, seeking revenge for past political actions (compulsory upfront student union fees)?  Placating foreign governments who, in truth, are in competition with us?  Or just putting universities in their place? 

Second, if we clearly define, and accept, the purposes of government regulation, and therefore agree that some form of regulation is necessary, how do we strike the right balance when regulating universities commercial activities?  And does government have the skills to do this adequately?

Consultation between government and universities is critical.  The regulations I have discussed today have all been forged in a consultative environment, through endless meetings with peak bodies and other stakeholders, albeit often within timelines that hamper the work required.

Third, I conclude with a final question.  Are there alternative forms of regulation that could ensure the quality of our services to international students, and have we fully explored them?  For example: we rarely mention the discipline imposed by the international student market?  And what about industry generated codes of practice and professional accreditation processes?

In many countries higher education is still seen primarily as a publicly provided good, so the ability to represent a comprehensive government regulatory framework is important to our overall reputation.  But I do wonder whether or not to keep ahead of the game we shouldn’t now be thinking through the balance between government regulation and education industry centred frameworks that might be both more nuanced and flexible.

There are a number of industry codes that might be useful.  For example, the AVCC (soon to be Universities Australia) has a comprehensive Code of Practice for international education.  The American Forum on Education Abroad (2005) has a comprehensive set of Standards of Good Practice for Education Abroad.  And there are a number of other examples.

To sum up, we should never take for granted the assumption that more regulation is essential to a better university engagement in international education.  We need to be smart enough to think about the alternatives.


A number of colleagues responded to my questions and provocations in preparing this paper.  I would like to thank Maria Stavrinakis, Virginia Pattingale, Bronwyn Symondson and Steve Jones for generously sharing their views.  None should be held responsible for the opinions I have expressed.


Australian Education International 2005 Transnational Quality Strategy

Australian Vice-Chancellors Committee 2005 National Code of Practice in the Provision of Education to International Students, Canberra

Baumber Consulting 2006 National Code of Practice for Registered Authorities & Providers of Education & Training to Overseas Students.  Assessment of Costs to the University Sector of Compliance with Revised National Code as set out in the Industry Consultation Draft May 2006.

DEST (Department of Education, Science and Training) 2006 National Code of Practice for Registered Authorities & Providers of Education & Training to Overseas Students (The National Code).  Final Draft, August 2006

DIMA (Department of Immigration and Multicultural Affairs) 2006 Evaluation of the General Skilled Migration Categories

Forum on Education Abroad (2005) Standards of Good Practice for Education Abroad, Carlisle, PA.

Macklin, Jenny 2006 Australia’s Universities: Building Our Future in the World, A White Paper on Higher Education, Research and Innovation, ALP.