I’ve criticised NZQA in the past about their work with English language schools (ELS) and not just when I represented the ELS sector. NZQA has been guilty of implementing some poorly designed systems over the years and following up very quickly. To be fair, the last Labour government shot from the hip on this issue and left officials scrambling around for quick answers.

But a few recent stories have shown NZQA performing well. Last year, a reality TV show that no-one ever watched scored a lot of coverage when it filmed ELS people allegedly selling business diplomas (ie the piece of paper, not the months or years of study!). This kind of thing happens regularly, and the TV crew did a public service by getting it on film. NZQA took a wee while to respond but they deregistered the private training establishment (PTE), NZ Academy of Studies. Last week they also deregistered City Language Academy (also in Auckland). NZQA identified the Director of City Language Academy as being involved in the alleged sale on TV. Good on them, especially since they seem to have followed good process and minimised room for appeals to drag on.

In another story, also written by Tom Hunt of the Dominion Post, the future of GEOS NZ is under threat. GEOS is a major Japanese company with schools around the world – one of the many big overseas firms operating in NZ. Whether GEOS NZ continues is up to their Japanese investors, as it should be, but the relveance to NZQA is that their student fee protection policy is working well. I was involved in setting up that policy, but it didn’t work for some years because there were too many options, hampering effective oversight by NZQA and economies of scale for the offerings. Now that the Public Trust has dominated the market, there is a reliable service for ELS, students and government. How it roughly works is that all upfront fees go into a trust fund and get paid out to an ELS on a weekly basis.

You might wonder why this matters, but the real beauty of it is that when an ELS closes, whether by NZQA or market reasons, all the unused fees are sitting in a trust account. That means that, before liquidation/deregistration, managers can make a business deal with another organisation to transfer stduents. If that can’t be done, then the students themselves can walk down the road. It also reduces the chances of people mismanaging the enormous positive cashflow that an ELS can generate. While none of this is sexy, and it does increase transaction costs and reduce cashflow, student fee protection has eliminated the “students on the street” story from the ELS market. That story was a periodic attack on the reputation, here and overseas, of every successful ELS and it is great that it has disappeared – the latest articles are nowhere near as damaging as they would have been a few years ago.

GEOS Australia is a different story, with 2,300 students affected, including students fees and accommodation money. I found an interesting angle on it all by a foreign English teacher in Japan. GEOS itself is an enormous company with about 500 schools in Japan and 50 plus around the world.