Education Consultants employing “sub-contracting” often tread dangerously… Bigg Boss is watching!

What and who is a “Sub-Agent” to an overseas education consultant?

There is considerable confusion in the industry as to when a student is counselled and recruited by a University through the offices of one of its contracted representative/agent, does the University still have to dig deeper and discover if the student was indeed counselled at the first instance by the particular agency.

Regulations in almost all the countries mirror the Australian ESOS Act. The recent Hon Knight report emphasizes…

I note in this context that the Baird Review remarked on the responsibility that providers should (but do not always) take for the conduct of the agents they employ overseas. Despite some providers’ claims that they have little or no influence over their agents, Baird rightly saw this as an abrogation of responsibility. I support the Baird Review’s position that “It is important the message is clearly given to providers that if they contract with an education agent to represent them then they must conduct sufficient due diligence to be confident the education agent will accurately represent them, their courses and living in Australia”. As Baird notes, the ESOS Act already makes Australian providers responsible for all their agents. Amending the ESOS Act to include protection against unethical marketing practices and establishing financial penalties for providers whose offshore agents can be shown to have acted unethically, as recommended by Baird, would reinforce this responsibility.

To simplify the situation, the “industry” has to be seen as evolving where mostly once-individual-counsellors turned into an organisation and have now been developing strategies to ensure geographical coverage. The ways to out-reach is primarily using one of the three options: 1) setting up its own offices funded by itself, 2) signing up franchisees/licensees in other regions and 3) entering into formal/informal sub-agency agreements/arrangements. The first two are not really frowned upon since some of the larger players in the industry too employ such models but the third is where ambiguity and generalisations cloud clarity.

Firstly lets understand that all the above are legal operations and if handled properly and ethically they can be of use to all parties. I personally have issues with sub-agencies but that’s because of ethical reasons than legality. Further because I believe that our industry is not matured enough yet and the compliance safeguards are still underdeveloped.

However the moment a parallel is understood with the travel agency business, the situation becomes far clearer.

The dividing line where ethics is questioned is not related to ownership of the counselling centre in the location but on whether the operation at the local level is in the name of the parent company or in another name altogether. If it’s in the name of the parent company then the unit becomes a branch whether as a franchise, licensee or sub-agency and the business arrangement becomes an internal matter between the two partners. The full onus for that branch then lands in the hand of the parent company and there is really no confusion then. For education providers too it should not matter at all and they will be only talking to the parent company and the parent company will take responsibility for the integrity of the branch. Likewise, at no time, the parent company can shake off their responsibility and claim that the local unit is a rogue or a rebel.

However, issues arise and hence the debate, when the local unit operates in a different name and possibly a different trade too and also claim to be a sub-agent of the parent company. The parent company too doesnot list it as a branch and hence there is no ownership to the responsibility for the student in reality. The blame-games begin here in such situations. The student, if cheated, names the local unit while the University doesnot even know the local unit. This is precisely the type of arrangement that seems to be faulty as the University contracts often bar sub-agencies or sub-contracting of this nature.

It is easy for one to say that such sub-agencies need to be put to bed but how do we do that in short term. Referrals and Cross-Referrals have pluses and minuses but certainly in short term they cannot be done away with. Lets take one example:

There is a student in X city where there is just no representation for a particular University. The student approaches a local education agent who being ethical informs the student that since he doesnot represent the said institution, he is putting the student in touch with another education counsellor in another city who using electronic means will assist the student realise his dream. The local agent does exactly this and then the student gets full assistance instead of half-baked assistance and the student is also not made to change his option because there is no local help. Thereafter the student gets the admission help and the local agent guides the student through visas etc on behalf of the other agent who helped the student with all the processes till the visa level.

The above cannot be surely unethical. I would not hesitate to say that this is possibly also the right thing to do. Full transparency and full assistance has been provided to the student.

Now comes the remuneration bit for the local agent: The local agents can either charge student for the local assistance with visas and related processes. Or the main education agent in the other city who is contracted by the University, understanding that the full process is broken in parts, agree to compensate the local agent for the help and referral through a referral fee or a share of the remuneration it receives from the University for the referral.

The above method of compensation for a delivered service cannot be surely unethical too. The student has not been charged and hence the student’s interest has been protected too.

I have just provided above a situation where a sub-agency can also be ethical and just. However there are situations where the sub-agencies are too loose and leads to abuse. The problems arise when sub-agents begin promoting themselves as representatives of institutions that have not contracted them at all. Further they lead to complications when the parent agencies working on short-term goals begin using them as feeders to their system. And then also lead to lodging visas for feeder agencies without interacting with the students.

I have a feeling that immigration authorities and border clearance agencies are gradually getting to understand the modus operandi. NZSA agents were recently asked to list their sub-agents though am not sure if they have all complied honestly in the light of the fact that most sub-agencies are with no written contracts and purely a referral arrangements.

However, I feel that the visa office should be primarily concerned when the agency lodging the visa has not been in contact with the student at all. If the visa lodging agency is responsible for the student’s integrity and has counselled the student then does it really matter if the student used the same agency for the admission or not.

This brings me to an interesting proposition that I am yet trying to comprehend the purpose as such and its resultant impact on sub-contracting beyond what has been written in the review report of Hon Knight for Australia. Knight’s review of the student visa system and his recommendations state the following:

Recommendation 30

That DEEWR take steps to encourage providers to voluntarily enter agent data into PRISMS in the interim before the ESOS Act is changed to make this mandatory. 

…Currently, there is no requirement to enter the name of any agent into the record of an individual student in PRISMS. This is clearly a gap in the system. In an earlier chapter I recommended that it should be mandatory for the name of any agent involved in the recruitment of a student to be listed against that student’s record in PRISMS…

Though the logic and arguments given is primarily as an add-on to the Baird Review and I am in full support of this, this will have an impact on sub-contracting and sub-agencies in the industry too. It will help link an agent to a bad-visa outcome and possibly also to a non-complying institution but in the immediate term, the visa officer on a glance at the ECOE will be able to make out whether the offer of place was by the agent lodging the visa or not. This is very interesting. The moment the visa is lodged, names of two agents will throw up in front of the visa officer. One, whose name is linked to the ECOE and the second, who lodged the visa. Maybe this will immediately move the file to a “negative profile” and lead to closer scrutiny of the visa file and possibly even an interview to the student to determine the integrity.

Now I remind that my argument in this blog is that the visa officer should be concerned with whether the student whose visa is being considered has been assisted ethically and only just that. I support the idea of inclusion of the agent in the PRISMS with this particular caveat. Further now there are mega-players globally who are entering the student-recruitment business and employing purely sub-contracting as a way to grow… Some more thought and understanding required at this stage when specific guidelines are being developed.