Training provider offers agents 70% sweeteners

Agents can make high commissions for enrolling international students at some training establishments.  Photo / Getty Images
Agents can make high commissions for enrolling international students at some training establishments. Photo / Getty Images

Auckland education providers are offering up to 70 per cent in commission for agents to enrol international students in their schools.

Education New Zealand says the normal rate is between 20 to 25 per cent, and schools would struggle to survive if they paid agents anything more.

But three private training establishments in Queen St told the Herald they offered up to 45 per cent in commission.

And the highest was the Kingston Institute of Business and Technology, which offered 70 per cent.

If an agent signed up a student for a three-month English language course at the advertised fee of $2250 at Kingston, they would receive a commission of $1575.

"There is no way that these ... schools can be legitimate at that price, unless they have no costs for teachers or rent because nobody has to come to class," said English New Zealand chairman Darren Conway.

Mr Conway, also the chief executive officer of Languages International, said there was not enough margin in profits for providers and such high commission rates were not acceptable.

"Business economics wouldn't support that kind of [charging] because barriers to entry are too low, someone would always be able to come in below that kind of profitability and undercut you," he said.

"We pay our agents 20 per cent - that rate is standard in our industry globally."

Mr Conway said his school struggled to charge full rates for classes also because of undercutting, which dragged the market down.

the head of Kingston's international department, Andy Leighe, defended the high agency commission his school offered as a marketing strategy.

"It is better to get bums on seats rather than run empty classes, and we feel offering high commission and keeping our rates up is a better option," said Mr Leighe.

"This is our marketing strategy, because if we dropped our fees, people often equate cheap with poor quality."

Mr Leighe said the 70 per cent commission was a special offer and the school would drop back to its normal rate of 40 per cent next month.

The Qualifications Authority did not have a guideline for agency rates, saying it was up to each provider to make its own business decision.

"Agents operate in a global education market and the fees and commissions they charge will be partially determined by market factors," an authority spokesman said.

"Agent commission is a commercial arrangement between the provider and the agent."

- NZ Herald

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