This article is part II of our two part series on the globalisation of higher education in Australia. While part I of this series focussed on the regulatory issues that may arise when Australian universities and other higher education providers operate overseas, this article looks at Australia's regulatory framework from the perspective of overseas operators looking to enter the Australian market (transnational higher education providers). This article provides:

a) an outline of the regulatory framework as it applies to transnational higher education providers; b) an overview of the registration process; and c) an overview of the national funding presently available to universities and higher education providers in Australia, and commentary on the extent to which the funding might be available to transnational higher education providers.

Context

Global

There are a variety of reasons why transnational higher education providers may seek to operate outside their 'home' jurisdiction. There may be a market for a specialised offering in a foreign jurisdiction, which is not being filled by local providers. There may be opportunities to attract students in the foreign jurisdiction into domestic courses, with the overseas offering acting as a pathway to attract students to that particular university or provider. The university or provider may simply view an international offering as contributing to the brand of the university. There are a broad range of models available to (and adopted by) higher education providers, from the exclusive use of online modules, to the opening of physical 'satellite' or 'branch' campuses in foreign jurisdictions.

According to research undertaken by The Observatory on Borderless Higher Education, in conjunction with the Cross-Border Education Research Team at the State University of New York and Pennsylvania State University, as of January 2017, there were 247 international branch campuses globally and another 22 in development. The US and the UK are the largest 'exporters' of branch campuses, with 51 and 28 institutions respectively with campuses outside the national territory. Generally international branch campuses operate under the 'brand name' of the home university, seeking to capitalise upon and 'globalise' the existing reputation of the name of the provider. Most are set up as private education companies in the foreign jurisdiction and registered as private education providers under the jurisdiction of the same.

Situation in Australia

Recognised by both higher education providers and students as being one of the world's leading jurisdictions for the delivery of quality higher education services and the third most popular destination for international students, Australia is for many reasons an attractive market for potential expansion. Correlated with the importance of the sector to the Australian national economy however, is the need to protect this sector and its reputation. As a consequence all providers operating in Australia are subject to voluminous and strict regulation, primarily at the Commonwealth level but also at a State level.

In line with a national focus on higher education and research, the Commonwealth and the respective State governments have to some degree facilitated the growth of transnational higher education providers offering courses in Australia. For example, the South Australian Government has particularly extended its support to the establishment of transnational higher education providers in South Australia, building a dedicated international university precinct comprising campuses of Torrens University, UCL Australia and Carnegie Mellon University Australia.

Torrens University has established itself through an Australian subsidiary and confers Australian qualifications. The other two providers, UCL Australia (a branch campus of the British university) and Carnegie Mellon University Australia (a branch campus of the Pennsylvanian university), have established themselves as 'overseas universities' in Australia, providing courses to Australian and international students leading towards the conferral of British and American qualifications respectively.

Despite its strict regulatory framework, given the strong reputation of Australia's higher education sector and its desirability as a place of study with international students, Australia will continue to be an option for high-quality transnational providers looking to open branch campuses outside their domestic jurisdiction. This will be assisted by the proliferation of international agreements, including the Trans-Pacific Partnership Agreement entered into by Australia and a number of other countries, which specifically operate to reduce the barriers to entry in overseas jurisdictions for universities, higher education providers and vocational education and training providers (see our earlier article published in Higher Education focus here).

In this article, we consider the particular regulatory issues that must be considered by foreign universities and other higher education providers looking to offer courses of study in Australia and the potential funding available to them.

Regulation of transnational higher education providers (transnational providers)

How a transnational provider wishes to offer courses in Australia can take one of any number of forms. For example, a transnational provider may: a) establish campuses within Australia at which students will complete their entire course of study for a non-Australian (overseas) higher education award; b) establish an Australian subsidiary to solely or jointly confer higher education awards; c) enrol students in online courses provided from overseas premises; d) offer students the opportunity to take classes for shorter periods of time at Australian premises operated by the transnational provider, either as part of a course of study towards an award that is completed mainly at the 'home' campus or as a stand-alone course which does not involve conferral of an award; or e) establish arrangements with an Australian registered higher education provider (Australian provider) where the Australian provider confers the higher education award if the transnational provider's students undertake the majority of their course in Australia.

The model adopted, will determine the type and extent of regulation by Australian regulators and also the type and degree of national financial support offered both to the provider and its students.

Is registration required?

Though higher education providers are subject to regulation at both a State and Commonwealth level (and almost all public universities in Australia are established under State legislation), the principal regulation of the sector is undertaken by the Commonwealth Government, acting through the Tertiary Education Quality Standards Agency (TEQSA). The regulatory framework governing the registration and operation of transnational higher education providers in Australia includes: f) the Tertiary Education Quality and Standards Agency Act 2011 (Cth) (TEQSA Act) which establishes standards for the provision of higher education in Australia, the Higher Educations Standards Framework (Threshold Standards); and g) the Education Services for Overseas Students Act 2000 (Cth) (ESOS Act), which regulates the provision of higher education services to 'overseas students' studying in Australia.

Under the TEQSA Act depending upon how they are established in Australia, transnational providers may offer courses of study that lead to Australian higher education awards (Australian awards) or overseas higher education awards (overseas awards). To offer or confer an Australian award, the provider must be established as an Australian entity under Australian law. This is what Torrens Australia has done. By contrast, an overseas award can only be offered by an entity or person incorporated under a foreign law, like, for example, both UCL and Carnegie Mellon University Australia.

Whether a transnational provider is subject to TEQSA regulation depends upon a number of factors, in particular whether the provider is an Australian or an overseas entity, and where it delivers its courses of study. TEQSA regulates the registration of those providers that confer: a) Australian higher education awards (Australian awards), regardless of where the course of study is completed; and b) overseas higher education awards (overseas awards) where the course of study is wholly, or mainly completed in Australia.

On this basis, all Australian providers (including an Australian subsidiary of an overseas provider) must be registered irrespective of the location of the courses of study leading to the conferral of an Australian award. By contrast an overseas entity (necessarily conferring overseas awards) will only require registration if it offers or awards higher education qualifications for courses of study that are provided wholly or mainly from Australian premises. Referring back to the potential 'options' for establishment, only those transnational providers in categories (a) or (b) would be required to seek registration from TEQSA.

In determining whether or not a course is provided 'mainly' from Australia premises, TEQSA presumes that the provision from Australian premises of more than 50% of the courses leading to the conferral of the relevant higher education award indicates that an award is provided 'mainly' from those premises. This presumption however is just that, and TEQSA's ultimate determination of whether regulatory action (registration) is necessary will be influenced by the nature of the provider and the nature of the specific course being offered. Should a higher education provider wish to offer any courses in Australia without first obtaining registration through TEQSA it would be prudent to first seek legal advice to ensure their compliance with Australia's strict regulatory requirements.

Process of registration

Should a transnational provider seek to confer either Australian awards or overseas awards where its students undertake their entire course of study (or at least the majority) in Australia it will need to be registered as a higher education provider pursuant to the TEQSA Act. In applying to TEQSA, a transnational provider can seek registration in one of the following six higher education classification categories: a) Higher Education Provider; b) Australian University; c) Australian University College; d) Australian University of Specialisation; e) Overseas University; or f) Overseas University of Specialisation. Of these categories, (b) – (d) confer Australian awards, while (e) and (f) confer overseas awards.

The process of registration can be lengthy, sometimes taking in excess of 18 months from the point in time at which a provider decides it will seek registration, and the standards required to be met are both detailed and onerous.

All registered higher education providers in Australia are required to meet the Threshold Standards which provide regulation around ensuring adequate academic preparation of courses of study; the formalisation of contractual arrangements between providers and students; the provision of appropriate and sufficient learning facilities and resources and the public availability of sufficient information to allow students and prospective students to make informed choices regarding, for example, the selection of courses of study. In addition to this, should a transnational provider seek registration in an 'Australian University' category, it will be required to meet additional qualification criteria and have the support of the relevant State government in the jurisdiction in which it wishes to establish itself.

Should it instead wish to be registered in either of the Overseas University categories (and thereby be able to issue overseas awards from Australian premises) it will need to demonstrate to TEQSA both that it is recognised as a university in its home country (the standard of which is acceptable to TEQSA) and that it meets criteria equivalent to those required to be met by the Australian University category.

Available national funding

In Australia, the Commonwealth Government funds higher education primarily through two means: a) directly, through grants and other payments principally made to providers, including: I. grants subsidising the higher education tuition fees of domestic, generally undergraduate, students across a wide range of discipline areas – Commonwealth Grants Scheme (CGS); and II. other grants designed to promote or support, among other things, capital development projects, and research and research capability; b) indirectly, through financial assistance to students (usually in the form of loans).

A registered higher education provider may be eligible to receive this funding where it is an approved 'higher education provider', namely where it: a) is registered in one of the higher education provider categories under the TEQSA Act; and b) otherwise meets the 'tuition assurance' and 'quality and accountability' requirements outlined in the Higher Education Support Act 2003 (Cth) (HESA). These requirements concern financial viability, quality, fairness to students, arrangements for student contributions and tuition fees and other general compliance matters.

Transnational providers may be eligible for some forms of national funding, depending upon a number of factors, including among other things, the content, type and level of award they offer and confer. Each provider needs to be considered on a case by case basis. However, as a general proposition and with some exceptions, much of the direct funding will not be available because the transnational provider will be a private provider. Whether a student of the transnational provider can access financial assistance (in the form of a loan) will depend upon whether the student is a domestic or overseas student. Generally domestic students can access loans if an Australian citizen or holder of one of a list of specified visas.

Transnational providers looking to enter the Australian market will need to consider the funding question carefully, as it may impact on the courses provided, the students targeted and the viability of the model sought to be implemented.