What is a provider default?

The legal definition of a provider default is specified under section 46A of the Education Services for Overseas Students Act 2000 (ESOS Act):

1. A registered provider defaults, in relation to an overseas student or intending overseas student and a course at a location, if:
   
   1. either of the following occurs:
      
      1. the provider fails to start to provide the course to the student at the location on the agreed starting day;
      2. the course ceases to be provided to the student at the location at any time after it starts but before it is completed; and
   2. the student has not withdrawn before the default day.

Causes of provider default

The most common causes of provider default are:

• provider closure
• failure to deliver a particular course.

Other scenarios that may result in provider default include:

• ceasing to provide courses to overseas students altogether
• rejection of an application to renew registration
• a provider decision to reduce student numbers in an existing course at a location, resulting in notification to students that they cannot continue or commence the course at that location
• a provider decision to not commence a student at an agreed location and starting day, without the agreement of that student
• a provider moving a student or students in a course to a different location (whether a registered location or not) without the student agreeing to move location.

Default exception notices

Sometimes a provider default may occur because of a change of legal entity.

For example, a parent company that owns several registered providers that exist as separate legal entities decides to consolidate those entities. Even if this does not otherwise affect current students, technically, the original registered provider has ceased providing the course to its students.

In this situation, ASQA may issue a default exception notice under section 46A(4) of the ESOS Act. This default exception notice will allow you to continue providing courses under the new legal entity title to overseas students who have already commenced (see below).

Before serving this notice, ASQA will consider:

• the effect of the change on the delivery of courses and outcomes for students
• any relevant advice provided by another ESOS agency.

If you are granted a default exception notice:

• You have not defaulted in respect of overseas students who have commenced their course. You may continue providing the course to these students.
• You have defaulted in respect of intending overseas students who have not yet commenced. You must meet the default obligations to these intending overseas students.

If a change of legal entity occurs and ASQA has not given you a default exception notice, then you have defaulted in respect of all overseas students for a course at a location.