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15 Oct 2020

TEQSA regulatory implications for overseas higher education providers

By Kym Fraser and Kyla Cameron

Overseas institutions wishing to establish an Australian branch must demonstrate legal, compliance and quality assurance measures in order for TEQSA to allow the institution to enter Australia’s higher education sector.

With higher education providers around the world continuing to offer and expand online course offerings as the Coronavirus pandemic endures, agile overseas institutions will no doubt be looking to expand their online offerings to new markets, including Australian based students.

The question arises as to whether an overseas institution must obtain registration and course accreditation from Australia's Tertiary Education Quality and Standards Agency (TEQSA) in order to provide awards and courses to Australian based students.

TEQSA is Australia’s independent national quality assurance and regulatory agency for higher education. Established as a federal agency by the Tertiary Education Quality and Standards Agency Act 2011 (Cth) (the TEQSA Act), TEQSA's purpose is to protect and enhance the reputation of Australia's higher education sector and protect student interests. It does this by ensuring that higher education providers meet minimum standards determined by the> Commonwealth Minister for Education and Training– the Higher Education Standards Framework (Threshold Standards) 2015 (HES Framework). The HES Framework was established by s 58 of the TEQSA Act.

All universities and other higher education providers that offer higher education awards and courses (diploma level or above) in or from Australia, whether public or private, must be registered by TEQSA and must meet, and continue to meet, the requirements of the HES Framework. Registration and course accreditation are granted for a specified term, not exceeding 7 years (section 21(6) and section 49(6) of the TEQSA Act).

In respect of overseas institutions wishing to offer overseas courses or awards to Australian based students, the TEQSA Act provides that registration as a higher education provider is required where the courses of study related to an overseas higher education award are provided wholly or mainly from Australian premises: see sections 4-6 of the TEQSA Act. If registration is granted to an overseas institution, TEQSA will consider whether the overseas institution is to be given authority to "self approve" its courses or, alternatively, whether the institution must apply to TEQSA for course accreditation.

It follows that overseas institutions who do not have a physical presence in Australia but offer wholly online courses to Australian based students will not fall within the reach of the TEQSA Act. However, there may be still be Australian tax and/or privacy/data protection issues to consider in such cases.

Where overseas institutions do offer courses wholly or mainly from Australian premises, the statutory requirement for provider registration and course accreditation (whether self-accreditation or accreditation by TEQSA) applies irrespective of whether the overseas institution seeks to have its awards or courses recognised in Australia.

The substantive assessment of an application for registration can take up to 9 months (with a possible extension of a further nine months in certain cases) (see sections 21(2) and (3) of the TEQSA Act). The TEQSA Act and HES Framework set out specific matters which applicants must evidence in their applications, including:

  • the applicant meeting the "Threshold Standards". These are the standards outlined in Part A of the HES Framework, examples of which are referred to below (section 21(1)(a) TEQSA Act).
  • a clearly articulated higher education purpose that includes a commitment to and support for free intellectual inquiry in its academic endeavours (HES Framework 2015, Part A Standard 6.1.4 and Part B Standard 1.1.2).
  • a formally constituted and accountable governing body, which includes independent members, that is exercising competent governance oversight of all of its proposed higher education operations (HES Framework 2015, Part A, Standard 6.1.1).
  • the applicant, and each person who makes or participates in making decisions that affect the whole, or a substantial part, of the applicant’s affairs, is a fit and proper person (section 21(1)(b) TEQSA Act; HES Framework 2015, Part A, Standard 6.1.2.a).
  • members of the applicant's governing body meet Australian residency requirements (if any) of the instrument under which the applicant is established or incorporated, or otherwise evidence that there are at least two members of the governing body who are ordinarily resident in Australia (HES Framework 2015, Part A, Standard 6.1.2.b).
  • the application for registration is in the approved form, accompanied by any information, documents and assistance requested by TEQSA (including a concurrent application for accreditation of at least one higher education course) as well as the relevant fee (section 18 of the TEQSA Act).
  • the applicant having sufficient financial resources to remain financially viable during the length of the registration and apply resources to sustain the quality of the higher education offering (HES Framework 2015, Part A, Standard 6.2.1.c).
  • the applicant having a cohesive set of policies and procedures that cover all areas of quality assurance and are capable of being implemented (HES Framework 2015, Part A, Standards 2, 6).
  • the applicant having an appropriate staffing profile for each course of study with sufficient experience to provide academic oversight and meet the needs of students (HES Framework 2015, Part A, Standard 3.2 and 3.3).

In short, overseas institutions wishing to establish an Australian branch must demonstrate legal, compliance and quality assurance measures in order for TEQSA to allow the institution to enter Australia’s higher education sector. For more information on the regulatory process and legal requirements in respect of TEQSA registration and course accreditation, please contact Kym Fraser.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.