Australian rogue colleges face poaching, fraud claims

PUBLISHED : Saturday, 14 April, 2007, 12:00am
UPDATED : Saturday, 14 April, 2007, 12:00am

Australia's A$10 billion education export industry has been rocked by accusations that private colleges are defrauding students and poaching others from competing institutions.

The Australian Crime Commission has investigated some of the colleges and has referred student complaints to the Federal Police.

More than 160,000 foreigners are now undertaking English-language and training courses in Australia and what they spend on fees and living expenses is estimated to contribute at least A$10 billion (HK$64 billion) to the national economy.

But former teachers at some of the private colleges have complained of fraudulent activities and stolen money, while students have protested about inadequate facilities, poor teaching and administrators refusing to refund fees.

In one instance, the International Business and Hospitality Institute in Melbourne allegedly refused to refund student fees ranging from A$6,000 upwards for diploma and certificate courses after the students had been told not to attend classes but go on holiday instead.

The institute's registration as a training provider was suspended by the federal Education Department in February, prohibiting it from enrolling new students, although by that time none were left.

The college was set up in 2005 by two mainland entrepreneurs, Fu Huang, 23, and Lu Guanxi, 47, who claimed to have the backing of several major mainland-based investors.

Mr Fu hired Robert Palmer, a veteran educationist, to help set up the institute and arrange to have the college registered so it could tap into the international student market.

But three months after the business was registered and began charging students, Mr Palmer and several other teachers were dismissed.

Mr Palmer said promises to provide proper teaching material, furniture and equipment were ignored by the institute and that questions surrounded the withdrawal of thousands of dollars from the student trust fund. He said the institute had supplied fake documents to students who were seeking to enrol.

Another private institute, the Melbourne International College, was subject to an audit by the Victorian regulatory authority after complaints from former staff that students were being charged extra fees so they could skip classes and go to work.

Foreign students must turn up to 80 per cent of classes to keep their immigration visas but a college spokesman denied any had been charged extra to skip lessons.

Tim Smith, executive officer of the Australian Council for Private Education and Training, which includes the college among its 1,100 members, said the college 'had put remedial steps in place to improve the situation'.

More than 700 private colleges are selling courses to foreign students with costly advertising but some have opted to save money and poach them from other institutions.

Mr Smith said the rogue institutions hired agents to approach students outside the colleges and offer fee discounts.

Education Minister Julie Biship said complaints from industry groups that the federal government had failed to act against rogue colleges ignored the fact that the government shared legislative responsibility with the states in monitoring institutions that enrolled foreign students.