International education: A blessing or a curse?

Opening the floodgates to students from India led to their exploitation both at home and in New Zealand. As the industry recovers and attempts to pivot to a high-quality model, Shane Cowlishaw travels to India to find out where we now sit in the competitive international education market.

Sipping an iced coffee in an air-conditioned Delhi cafe, Satinder Baweja asks if New Zealand really is as laid-back as it sounds.

“If it’s relaxed you can focus on your studies, you can focus on your work. In New Zealand everything you have to do on your own, in India you get servants, your mum is there to prepare food for you, your father is there to support you. If life is fast, it’s very difficult to cope.”

Next year Baweja will pack up his life and move to Auckland, where he will pay $34,000 to study towards an eight-month post graduate diploma in professional accounting at AUT.

His wife, who works for K-Mart in India, is not overly keen on the shift but will support Baweja as he looks to take the next step in his career after working for seven years following his graduation.

To fund their time in New Zealand the couple will drain their savings and take out an education loan against their property.

Assistance from family will also mean they don’t have to work while living in New Zealand, so Baweja can give total focus to his education.

He is, in the international education industry’s eyes, the perfect student - intelligent, financially stable, and likely to return to India after completing his studies.

While tourism has exploded to become our most important industry, the rise of foreign students and the money they bring is also of vital importance.

International education is estimated to contribute more than $4 billion to the economy, having risen from $2.5 billion in 2012/13 on the wave of a 25 percent increase in the number of students arriving. The Government wants to grow that number to $5b by 2025.

Reeling from the fall out from Rule 18

But in our haste to maximise profits, we have hit some speed bumps.

In 2013, with the approval of then Tertiary Education Minister Steven Joyce, NZQA made alterations to ‘Rule 18’ of its approval and accreditation rules.

Rule 18 may sound innocuous, but essentially it drastically loosened the English language requirements for Indian students leaving education providers free to enrol them using their own tests and criteria.

The damage was immense. Just how bad depends on who in the industry you talk to, but the blowback is still being dealt with today.

Delhi man Satinder Baweja will spend next year studying accounting at AUT, spending $34,000 to do so. Photo: Shane Cowlishaw

As the change was made, word quickly filtered through to the massive and unregulated agent market in India.

Education is big business in the second most-populated country in the world.

Every month, it’s estimated that a million people turn 18 in the country. That figure is expected to continue through to 2030.

That’s a lot of people looking to enter tertiary education and even if only a sliver consider studying overseas there are more than enough students for New Zealand to capture.

As New Zealand loosened its English language requirements, unscrupulous agents realised they could send a huge amount of people through the door regardless of their intentions.

With promises of permanent residency and readily-available work, the student tsunami began.

From about 8000 in 2012/13, numbers surged to a peak of 29,000 in 2016, with most enrolments at private training establishments (PTEs).

With huge money to be made, both in India and in New Zealand, cases of fraud grew alongside migrant exploitation.

Stories of people being forced to work for as little as $5 an hour began to emerge, and investigations into the links between education agents, PTEs and employers exposed an underbelly of abuse.

It took two years for the changes to be reversed, with many in the industry criticising the slow response by NZQA before it began cracking down on shady providers.

“It was like everybody could go to New Zealand, it was all doors open for everything. There were a lot of people who were opportunists and they took advantage for a couple of years.”

In India, Immigration New Zealand’s (INZ’s) man on the ground is Alan Barry.

He arrived in the country in December last year just as the market was beginning to calm down, but says there was “a lot of angst” that manifested itself in 2016.

Staff were swamped under a wave of visa applications as agents, who were earning up to 30 or 40 percent commission on each student, focused on New Zealand.

At its peak in 2015, more than 1800 agents were trying to send students here. That number has since dropped to 521.

Fraud cases shot up, particularly around proving students had enough money to live while studying abroad.

“Either the document itself was just fake, or there were some financial documents or bank records under a person of the same name, or you had corrupt bank managers who were preparing fake statements on their own letterhead.”

To try and get a handle on the out-of-control applications, INZ sent letters to 40 poorly performing PTEs and Polytechnics demanding a 50 percent visa approval rate from them. That number will soon rise to 60 percent and right now just 13 providers are above the mark.

In India, the most recent data from INZ on education agent approval rates for the 2016/17 year shows a swathe are being constantly refused.

Now rejecting applications

While in India, Newsroom visited several of the poorest performing agents to find out what was going on.

Sizzling Career Solutions’ office is found on the second floor of a dusty, rammed street in a nondescript northern suburb of Delhi.

There are faded photos of famous New Zealand destinations on the walls, alongside a framed certificate congratulating one of its agents for graduating as an Education New Zealand (ENZ) trained agent in 2014.

In the past year the company tried to send up to 50 students to New Zealand. Every application was rejected.

It is understood that one of the reasons those applications were refused was fraud.

The company’s questionable practices were highlighted in 2015 by the NZ Herald who accused it of telling students they could gain bonus residency points by studying in the regions.

But managing director Satpal Gulia denies his company is doing anything wrong and is critical of INZ who he believes has taken a far too strict approach.

“Now there are more checks. Checks should be there but I think right now they are going over everything, it’s too much," Gulia says.

“The good agents that are here, they’re facing hardships because of these stringent checks. The people who are working ethically are facing the heat.”

He admits things were easy a few years ago, with quick visa turnaround times compared to other countries and the “smartest commissions” of all education markets.

Another agent with approval rates that have dropped is ESS Global, where just 14 percent of applications were approved (for poor quality students rather than fraud).

Rohit Sethi, the director, says the open door policy introduced in 2015 saw people who couldn’t speak a word of English heading to New Zealand to study.

“The quality of students going to New Zealand was deteriorating at one time, I personally saw it as a bad dream.

“It was like everybody could go to New Zealand, it was all doors open for everything. There were a lot of people who were opportunists and they took advantage for a couple of years.”

Since the reversal of the rule change things have calmed down, he says, with many of the agents shifting their focus to easier countries in Eastern Europe.

Sethi also blames ESS’ low approval rate on vague refusals from INZ, who he believes are rejecting applications for financial reasons unfairly.

In India, many families held funds across multiple accounts and even though these were legitimate they were being turned down.

“This is one of the factors that is drawing students away from New Zealand, they have the financials, they’ll just go somewhere else.”

A certificate on the wall at Sizzling Career Solutions in Delhi. Photo: Shane Cowlishaw

A pivot to quality

After a turbulent two years, New Zealand’s international education is changing course.

Applications from India in the past financial year dropped from their peak to about 12,000, driven largely by a freefall in PTE students.

Simply put, the quest for sheer volume has been abandoned; we now want quality, high-end (and high-paying) students.

That shift, however, is easier said than done and brings with it risks and challenges.

One risk is that the guillotine is brought down too sharply, destroying our competitive advantage leading to students abandoning New Zealand completely and the industry dwindling away to nothing.

And one of the big challenges - rebranding New Zealand as a top-quality education destination - is a battle that some view as impossible.

With a homebase in Delhi, The Chopras is one of the largest education agents in India and sends tens of thousands of students overseas to study each year.

Having started the business with his wife Natasha in the early nineties, chairman Naveen Chopra is well-placed to comment on international education.

He says New Zealand needs to understand that it’s far down the food chain when it comes to the brightest students.

“You’re reaching for the rich kids, when you’re pitching to that socio-economic group they have a massive choice because they have the world at their disposal, money is not an issue.

“So somewhere like Auckland I guess, New Zealand has very good universities, no doubt about that, but now if you’re coming in and pitching at the high level, I believe it will take time.”

The whole industry has become increasingly unethical at the lower level ... If you visited a large number of these institutions you’d recognise it, you’d smell it

Chopra is critical of the low-level of investment the New Zealand education industry has made in India, describing it as sporadic and below other countries’, and more effort would be needed if New Zealand wants to start competing at the top level.

Considering the amount of money New Zealand had made in the past 10 years from Indian students this should not be a problem, and tidying up the agent situation in India could be done as well, although Chopra is dubious this will happen.

“It’s not such a big deal, if they really wanted to either outsource or employ five or six staff who travel through and see these institutions and mark them on whatever criteria and just blacklist, but they’re not going to do this.

“The whole industry has become increasingly unethical at the lower level, forging of documents, false bank deposits and blah blah blah. If you visited a large number of these institutions you’d recognise it, you’d smell it.”

Almost every agent spoken to in India told Newsroom the main reason for many students heading to New Zealand was the pathway to permanent residency and the ability to work after finishing their studies.

They described the country as a destination for the middle-class, many of whom legitimately wanted to study and stay-on to contribute to New Zealand but also those who wanted to escape India or use the country as a stepping-stone to Australia and beyond.

“There are 2000 agents saying New Zealand has shut down where it has not, but there are only 20 agents saying no New Zealand is still open, but 2000 vs 20, we don’t stand a chance."

Amit Chaturvedi is head of New Zealand client relations and training for IDP, the largest international education organisation in the world.

He sees a real challenge ahead for New Zealand as building its reputation as a top quality destination that can compete with the likes of Australia, Canada, the US and the UK.

In India you don’t hear much about the research work New Zealand universities are doing or what international organisations they were working with, which would all help to improve its reputation as an educational destination, he says.

There was also no information about destinations apart from Auckland, which he finds puzzling as there is ample opportunity to move into the regions.

“The reality is if you look at New Zealand as a choice of quality destination, it’s not really on the quality map. There’s a lot to be done as there are very few universities who fall within the top rankings and there are very few in the first place.”

Chaturvedi has no problem with New Zealand’s new Government removing work rights for lower-level students, but if it wants to switch its focus to the high-quality segment it needs to do more to provide those students with the ability to work in their chosen field, he says.

This is important in attracting those studying at a high level, and would benefit New Zealand by encouraging them to stay on and contribute to the economy.

“What is happening with part-time work is most people end up working at an eating outlet, a fast-food chain or a grocery store, that’s not what they’re supposed to be doing.”

Agents on the ground in New Zealand agree that while the situation has improved since the reversal of Rule 18 changes there is a real risk of the industry collapsing if things tighten too quickly.

Munish Sekhri, a licensed immigration advisor and chief executive of the Sekhri Academy, says New Zealand was once an “easy dream” to sell.

Things have changed in the past 12 months, with a multitude of agents switching to easier targets warning students off the country.

“There are 2000 agents saying New Zealand has shut down where it has not, but there are only 20 agents saying no New Zealand is still open, but 2000 vs 20, we don’t stand a chance," Shekhri says.

“The agents now are basically downselling New Zealand, saying it’s no good to go anymore, just because their fraud has been caught and the major aspect here is the Government of New Zealand, ENZ (Education New Zealand) for that matter, hasn’t done anything in creating positive PR in the country.”

Naveen Chopra, chairman of education agency The Chopras, believes New Zealand faces an uphill battle to reposition as a high-quality provider. Photo: Shane Cowlishaw

Can we make the switch from quantity to quality without killing the golden goose?

ENZ is the agency tasked with building and promoting the international education sector.

Its chief executive, Grant McPherson, cringes slightly when remembering how Indian students began flooding in unchecked.

“We had this sort of stream of people coming in when you looked at it, it was just a lot, more than was anticipated and that created some strange behaviours, particularly in market with agents putting significant pressure on the immigration agents.”

Now that the flow has been stemmed, McPherson and his team have shifted their focus to attracting high-calibre students.

They have had some initial success.

There has been a 27 percent increase in enrolments at a university level and a five percent rise at institutes of technology and polytechnics, while the PTE sector has dropped 38 percent.

But McPherson is realistic about the challenge in getting top-tier students to consider New Zealand.

While China was our biggest market we are only the 12th most-preferred option for the country’s students, while competition was also starting to come from countries where English was not the main language such as Malaysia and the Philippines.

“While we may be known for tourism or the All Blacks or something not a lot of places around the world, let alone India, think of New Zealand as a high-quality education destination.”

One of New Zealand’s greatest assets was its safe reputation and with security concerns in both the United States and the UK, McPherson believed some students were turning away from those markets.

But ENZ was also assisting New Zealand universities explore partnerships with Indian institutions to boost their reputation.

"Those stories about international students being exploited, which there have been far too many, are a stain on the good name of New Zealand as a destination for education and we are going to deal with those."

He points to a joint partnership between the University of Otago and the Bombay Stock Exchange Institute and a memorandum or understanding signed between Universities New Zealand and the state of Maharashtra where four million students studied at some of the countries best institutions.

Another example of these partnerships is the recent agreement signed between the Auckland Institute of Studies (AIS) and Manav Rachna International University (MRIU).

MRIU was one of the first Indian education providers to be accredited by NZQA as an offshore site for AIS’ programmes.

The deal led to research cooperation, staff exchanges and students spending time in New Zealand as part of their study.

MRUI’s chancellor, Dr Prashant Bhalla, believes New Zealand could benefit greatly from partnering more with Indian institutes.

He gives the example of a deal the university agreed with Swedish industry, which had a shortage of 60,000 workers.

After speaking with the likes of Saab, Volvo, and Ikea, a programme was established to train students in the skills required with the offer of jobs and paths to residency on the table for those who met the required standards.

Talks are ongoing for similar programmes in Japan and France, and if New Zealand wants to grow its technology sector or fill shortages in the construction industry, then India is well-placed to help, he says.

Education agents are prevelent in Delhi, but many are turning away from New Zealand. Photo: Shane Cowlishaw

Of course, the direction international education heads will ultimately be decided by the new Government.

Alongside the removal of work rights for low-level students, which Immigration Minister Iain Lees-Galloway has indicated will go ahead, more resources will be devoted to enforcing labour standards and stopping the back door to residency.

Labour has indicated the work right changes will remove $130m from the economy, while the opposition has estimated the real cost at closer to $1b.

The plan to reduce immigration levels largely through student visas has left the independent education sector anxious.

But Education Minister Chris Hipkins says any decisions will not be rushed and he will be talking with the sector to hear their concerns.

He was clear that education providers attracting students as a backdoor route to residency had a difficult time ahead, however.

“That’s not in New Zealand’s best interests and quite frankly is not in the student’s best interests. Those stories about international students being exploited, which there have been far too many, are a stain on the good name of New Zealand as a destination for education and we are going to deal with those.

“One of the things we’ve got to do, if that’s the space we want to be in, is make sure the low-value courses aren’t the ones that are defining New Zealand internationally and whenever there’s a media story about students being ripped off or exploited that damages our ability to move up the value chain.”

While there are challenging times ahead for international education, back in the Delhi cafe Satinder Baweja is simply happy he found an honest agent that has sent him on a path to study at a quality university and a safe country.

“You know, I can go to one of these recruiters and say ‘hey boss, I’ve only got $20,000 in my pocket and he will send me to one of these institutions, but what’s the point, I won’t be getting a quality education.

“If I’m not getting into a good university, then it’s worthless.”

Shane Cowlishaw travelled to India with the help of Asia New Zealand.

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