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Australian International Education Private College Debts

Sent broke by sign up, ship out ploy.

PRIVATE vocational education is in crisis. Some of the causes of that crisis are well-known, such as the Department of Immigration and Citizenship’s much-publicised changes to the skilled occupation list. However, other causes are less well-known, such as the build-up of bad debt within the sector.

These debts arose because, as Greg Keith, partner with Melbourne accounting firm Grant Thornton, recently explained to an industry seminar after auditing a large number of colleges in Victoria, many students have found ways of studying without paying providers.

How they can do this is deceptively simple. After having paid their fees, say, for a term in advance at one provider, they delay paying their subsequent fees for as long as possible after that. Once the provider loses patience with the student and cancels their enrolment, the student can simply re-enrol with another provider.

A very risky small business strategy when cash flow is king…..

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