New rates for the levy paid by international education providers balance their interests with the need to both promote the sector and address failures when they occur, Education Minister Chris Hipkins said today.
The Export Education Levy (EEL) is collected from providers to fund a broad range of activities including marketing and promotion. It also funds reimbursements for international students caught out by Private Training Establishment (PTE) programme and provider closures.
“We have listened to feedback from the sector and have decided on a balanced approach to address some of the key concerns raised during consultation, including the financial impacts on the sector, while continuing to address the immediate financial pressures on the EEL,’ Chris Hipkins said.
The rate for private training establishments (PTEs) will increase from 0.45% to 0.89% of international student tuition fees. For universities, and Institutes of Technology and Polytechnics (ITPs), the rates will increase from 0.45% to 0.50%.
“The levy fund has to be made financially sustainable to safeguard our international reputation for education and continue to support the wellbeing of our international students. It almost ran out this year due to payouts resulting from closures at PTEs,” Chris Hipkins said.
“This is the first increase to the EEL in its 15 years, and the Ministry of Education is doing its bit by reducing annual expenditure commitments against the levy by $300,000.
“Further work is being done to investigate ways to address other sector concerns, including recognising quality in the PTE sector.
“It may be possible in future to introduce a system where PTEs that are delivering a consistently high quality service might pay a lower levy while the few PTEs falling into risk categories, including having previous quality issues, might face a higher one,” Chris Hipkins said.
The new rates take effect from 1 January 2019.
Notes to the editor –
Consultation on proposed changes to raise the EEL rate took place from 18 September to 15 October 2018, with feedback received through an online survey and via email. Sector consultation meetings, hosted by the Ministry, with ENZ and NZQA in attendance, were also held in Auckland, Wellington and Christchurch.
The consultation proposed two options for increasing the levy (0.45% of international student tuition fees):
- Increasing the rate for PTEs from 0.45% to 0.83%, and the rate for universities, and ITPs and private schools to 0.55%
- Increasing the rate for PTEs to 1.24% and leaving the rate for the others at 0.45%
The Minister has subsequently agreed to a third option. The rate for PTEs will increase from 0.45% to 0.89% of international student tuition fees, and from 0.45% to 0.50% for universities, ITPs and private schools.
The new rates take effect from 1 January 2019. Payments for trimester one 2019 will be at the new rates while payments made in January or February 2019 for trimester three 2018 will be at the old rate.
For further information, see the Ministry of Education’s website.