Australia's int'l education industry uninsured
International education, Australia's third largest export, is operating uninsured, owing to no one willing to underwrite the government set-up fund to protect the sector, Fairfax reported on Friday.
The Educational Services for Overseas Students Assurance Fund, established in 2001, which guarantees student fees held just over 3 million Australian dollars (2.48 million U.S. dollars). The fund achieved a surplus of only 421,200 Australian dollars (349,441 U.S. dollars) in an industry worth 15.5 billion Australian dollars (12.8 billion U.S. dollars) during the latest reporting period.
Tim Smith, the former chief executive of the industry body that tries to place students in alternative courses said the fund is "uninsured" and "uninsurable".
"The consumer protection mechanism is an unholy mess. If you've got a fund that's broke and an industry that can't place the students, how can it work?" he told Fairfax.
The fund has failed to find an insurer since AIG decided not to renew its contract last November.
The funds manager, PricewaterhouseCoopers (PwC), would not reveal details of payouts since Global College of Sydney went into administration in February last year, leaving more than 1,000 international students displaced.
Fairfax reported the federal government would be forced to pay out claims if the fund was overdrawn.