Student Fee Protection Rules 2022

If you prefer you can download these rules as a PDF:

Student Fee Protection Rules 2022 [PDF, 7.2 MB]

1. Authority

1. These Rules are made under section 452 of the Education and Training Act 2020.

3. Interpretation

1. In these Rules, unless the context otherwise requires:

Act means the Education and Training Act 2020

Agent means a person to whom section 355(1) of the Act applies, regardless of whether or not that person has been appointed by the Student

Alternative Provider means a university, Te Pūkenga—New Zealand Institute of Skills and Technology, a wānanga, or a registered private training establishment

Approved Independent Trustee means an independent trustee as defined in section 10(1) of the Act where that trustee has no conflict of interest in carrying out the role of trustee for the Provider and is approved by NZQA under rule 11.1; and includes firms of accountants and lawyers acting through an accountant or lawyer who is an independent trustee of that kind

Compliant, in relation to a Provider or Agent and a Mechanism, means the Provider or Agent and Mechanism meet the requirements specified in the Act and these Rules

Conditions Dependent Course means a Course, or part of it, that is dependent on weather or water conditions, or that involves self-paced learning

Course means a programme or micro-credential that is not Exempt

Course Closure Event means:

1. the provider is no longer delivering or capable of delivering the Course for which Students are Enrolled;
2. any regulatory closure of the Provider;
3. insolvency of the Provider;
4. the Provider ceases to operate or loses its body corporate status;
5. any cancellation by NZQA of the Provider’s registration;
6. any withdrawal by NZQA of the Provider’s accreditation to provide a programme;
7. any withdrawal by NZQA of the Provider’s micro-credential accreditation; or
8. the Provider is removed as a signatory provider under section 531A or 535 of the Act

Enrolled means (and Enrol, Enrolling, and Enrolment have corresponding meanings):

1. the Student has accepted an offer from the Provider of entry into a Course at the Provider, and the Provider has received that acceptance; or
2. the Student is recorded by the Provider as enrolled with the provider or in a Course of the Provider

Exempt means a programme or micro-credential exempt from the requirements of section 356(1) by section 356(5)(a) and rules made under section 452(1)(u) of the Act

Mechanism means any of the Student Fee Protection Mechanisms (including their requirements) detailed in Appendix B

NZQA means the New Zealand Qualifications Authority

Pro Rata Refund means a refund of Student Fees paid by the student for which services or goods have not been provided to the Student, with the Tuition Fees component of the refund being calculated in accordance with Appendix C

Provider means a private training establishment as defined in section 10(1) of the Act

Refund Period means, in relation to -

1. international Students on a Course of three months’ duration or more, the refund period referred to in section 529(4) of the Act:
2. international or domestic Students on a Course of less than three months’ duration, the refund period specified by NZQA for the purposes of sections 357(3) and 529(1)(c) of the Act:
3. domestic Students on a Course of three months duration or more has the same meaning as refund period in section 10(1) of the Act

Student means any domestic student or international student

Student Fees means any and all funds of the following kinds that are paid by or on behalf of a Student in respect of a Course:

1. Tuition Fees:
2. accommodation expenses, travel and health insurance, and living expenses:
3. any other financial commitments associated with the Course

Supplier means a supplier of a Mechanism approved under rule 11, and for the avoidance of doubt includes Approved Independent Trustees

Te Pūkenga—New Zealand Institute of Skills and Technology means the institute continued by section 314 of the Act, and includes any of its subsidiaries that provide education or training or both

Tuition Fees means the gross payment relating to all costs of a Course (for the avoidance of doubt including commissions, Course expenses, and other financial payments related to the Course) paid by or on behalf of a Student

2. Other terms used in these Rules that are defined in the Act are: accreditation; private training establishment; programme; micro-credential; university; wānanga; domestic student; international student. 

5. Provider withdrawal and refund policies

1. A Provider must have withdrawal and refund policies that cover:
   1. Student withdrawal before, during and after the relevant Refund Period;
   2. the Provider voluntarily ceasing its Course or Courses;
   3. voluntary closure by a Provider;
   4. a Course Closure Event; and
   5. international students whose visa applications are declined.
2. These withdrawal and refund policies can be more beneficial to Students, but must not be less beneficial, than the obligations specified in the Act and these Rules.

7. Course Closure Event

1. Upon NZQA giving notice to the Supplier and Provider of a Course Closure Event of a Provider, the Provider’s Mechanism(s) will be triggered, requiring Pro Rata Refunds to be made to Students affected by the Course Closure Event.
2. Where a Course Closure Event is due to a natural disaster any notice by NZQA under rule 7.1 will not take effect where:
   1. the Course resumes before the start of the 11th working day after the date of the notice; and
   2. each Student is notified by the Provider within five working days from the date of the notice of the right to opt out of the Course, and where the Student does opt out within 20 working days of the date of the notice, a Pro Rata Refund is made to the Student for the remaining Tuition Fees, calculated from the time the Student ceased attending.

9. Student Fee Protection Mechanism(s) for Agents

1. For the purposes of section 356(2) of the Act, an alternative arrangement that is acceptable to NZQA is for the Agent to transfer the Student Fees to the trust account of the Provider’s Supplier by the close of business on the working day following the day it is received by the Agent.
2. Where an Agent does not avail itself of the acceptable alternative arrangement in rule 9.1, the Agent must use a standard trust (under Mechanism 1 in Appendix B) which is managed by an Approved Independent Trustee and which meets the following general criteria:
   1. it must cover every Student who has paid Student Fees to the Agent or any person acting on behalf of the Agent for Enrolment;
   2. the Agent must deposit the Student Fees into the trust account of its Approved Independent Trustee by close of business on the working day following the day the Student Fees were received by the Agent or any person acting on behalf of the Agent; and
   3. it must require the Agent’s Approved Independent Trustee to transfer the Student Fees held in relation to a Student to the Provider’s Approved Independent Trustee by close of business on the working day following the day the Student Fees were deposited with the Agent’s Approved Independent Trustee.

11. NZQA approval of Suppliers

1. Suppliers must be approved in writing by NZQA before operating a Mechanism. For a Supplier to be approved by NZQA they must:
   1. be an independent trustee as defined in section 10(1) of the Act and have no conflict of interest in carrying out the role of trustee for the PTE;
   2. have experience in managing trust accounts that have multiple beneficiaries and frequent transactions;
   3. provide evidence of secure and adequate data processing capacity; and
   4. provide evidence of an ability to resolve competing claims and finalise refunds within the timeframes set out in Criterion 14 of Appendix D.
2. Where the Mechanism being operated is not a standard trust, NZQA must be satisfied the Mechanism provides equivalent protection to a standard trust.
3. A Supplier approved under rule 11.1 may not operate or change a Mechanism without NZQA’s written approval.
4. For the purposes of granting approval under rules 11.1 and 11.3, NZQA must be satisfied that the Supplier will meet, and continue to meet, its obligations in or under the Act, including under these Rules.
5. NZQA will take into account any previous performance of a Supplier when deciding whether to grant approval under rules 11.1 and 11.3.

13. Obligations of Providers

1. Providers are required to provide to a Supplier the information they hold, which is relevant to information that a Supplier must provide to NZQA under Appendix A, within five working days of the Supplier’s request to the Provider.
2. A Provider must supply to NZQA and to its Supplier, before the end of five months following each financial year end of the Provider, and at the Provider’s expense:
   1. an audit opinion from an independent chartered accountant confirming that the provider is Compliant; and
   2. a further audit opinion from the independent chartered accountant confirming the compliance of the provider’s Supplier with these Rules and relevant Mechanisms (however, if the Supplier is Public Trust, this paragraph (b) does not apply).
3. NZQA may contact any independent chartered accountant (or firm) who provided an audit opinion for the purposes rule 13.2, to clarify any of the content of the opinion or any related matter.
4. Providers must request and retain from a Student, who has paid Student Fees to the Provider via an Agent, a copy of the invoice the Student receives from the Agent.
5. Where there is -
   1. a voluntary closure or Course cessation by a Provider; or
   2. NZQA gives notice of a Course Closure Event under rule 7.1 -
      the Provider must provide the Supplier and NZQA with the information set out in Appendix A within five working days, and must ensure Students are paid their refund entitlements.
6. Without limiting rule 11.3, a Provider must not change a Mechanism it has in place unless it seeks NZQA approval by giving at least 20 working days’ notice and unless NZQA approves the change.
7. Providers must, as a minimum and as part of their Student information obligations under section 354 of the Act, inform Students about:
   1. the applicable Mechanism(s); and
   2. if and when the Mechanism is triggered:
      1. the process for the Student’s entitlement to any payment for the relevant Refund Period or any Pro Rata Refund;
      2. who the Student should contact;
      3. a list of any documents Students will require; and
      4. instructions to attend any meetings arranged for Students.
8. In respect of Providers operating either Mechanism 1 (standard trust or static trust) or Mechanism 2 (bank bond) in Appendix B:
   1. where the Provider becomes aware that it has drawn down fees of a higher amount than the amount of the tuition actually delivered, the Provider must reimburse to the Supplier, by the close of the next business day, sufficient funds for the trust to cover the Tuition Fees represented by the undelivered tuition;
   2. where a Course Closure Event, or voluntary closure or Course cessation by a Provider occurs, and the Provider has been paid by the Supplier an amount more than the Provider is entitled to (based on tuition actually delivered), the Supplier may withhold further payments due to the Provider to offset that amount of undelivered tuition; and
   3. where a Student is enrolled in a Conditions Dependent Course, the Provider may only draw down Tuition Fees in relation to the Student upon confirmation to the Supplier that the tuition for which payment is claimed has been delivered.
9. Providers must:
   1. ensure that the correct amount of Student Fees is held by an Approved Independent Trustee when the Provider or any person acting on behalf of the Provider receives a payment of Student Fees, along with the amount of any deductions made by an Agent prior to the Provider receiving the Fees (whether that Agent is based overseas or in New Zealand);
   2. when aware that the Student has paid Student Fees to an Agent or any person acting on behalf of the Agent but unaware of the actual amount paid, deposit funds that cover the provider’s normal advertised price of the Course (including any expected commission fees if they are not included in that advertised price), accommodation expenses, travel and health insurance, living expenses, and other financial commitments associated with the Course; and
   3. advise NZQA where a situation of the kind described in paragraph (b) of this rule 13.9 occurs.
10. Before a Provider Enrols a Student via an Agent, there must be a written contract in place between the Provider and the Agent that properly covers the requirements of these Rules and the Act.
11. Providers must give all reasonable assistance to their Supplier(s) for the purposes of their Supplier(s) meeting their obligations in the Act, these Rules, and any relevant trust deed.

15. Failure of Provider or Agent to comply with Rules

1. Should a Provider or Agent fail to put in place or act under a Mechanism in a manner that complies with these Rules, NZQA may, without prejudice to its rights under the Act or rule 17.1, direct the Provider or Agent to arrange an alternative or specific alternative Mechanism that is Compliant.

17. Failure of Supplier to comply with Rules

1. If a Supplier of a Provider or Agent does not put in place a Mechanism that is Compliant:
   1. NZQA may immediately withdraw approval of the Supplier and/or its Mechanism; and
   2. NZQA may appoint an alternative Supplier and/or require a particular Mechanism.
2. Where NZQA has appointed an alternative Supplier and/or required a particular Mechanism under rule 17.1(b), the Provider or Agent must take immediate steps to move to the appointed alternative Supplier and use the required Mechanism.

19. Savings

1. Despite the removal of company or parent body guarantees as a Mechanism when these Rules commenced, Providers which operated such a Mechanism immediately prior to the commencement of these rules may continue to operate that mechanism.
2. In respect of Providers operating a company or parent body guarantee Mechanism, where the Provider becomes aware that the company or parent body might or will be unable to meets its obligations under the guarantee, the Provider must immediately advise NZQA and put in place an alternative Mechanism that is Compliant.