Fraud Investigation Underway Into Student Enrolments At Tertiary Education Provider
Associate Minister of Education (Tertiary Education) Steve Maharey today announced an investigation is underway into
possible misuse of the student loan scheme and the activities of a private education provider based in Taranaki.
“Nearly $10 million of tuition subsidies and more than $25 million of student loans may be involved.
“Earlier this year I directed three Government agencies, the Ministry of Education, the New Zealand Qualifications
Authority and the Ministry of Social Development, to investigate the National Certificate in Travel offered extramurally
by Practical Education Training Centre (PETC) in New Plymouth.
“The seriousness and complexity of this matter means all agencies have proceeded with caution to protect genuine
students on the courses and PETC staff, and also to protect the crown from any legal challenge by PETC.
“Concerns about these two PETC courses have centred on the quality of the courses, a significant growth in student
numbers in mid-2001, and the inclusion of a computer in the tuition fee. There have also been reports of these computers
being on-sold to second hand dealers.
“It appears that a number of students, who had no intention of undertaking study, have enrolled in the travel courses at
PETC to obtain a computer that is offered as part of the course. The computer’s cost is an optional part of the course
fee that students pay for, usually with a student loan.
“Following an investigation in September 2001, the Ministry of Education has suspended PETC’s notice of entitlement so
it would receive no further government funding while the investigation is underway. MSD’s Student Services has since
August been deferring approval of student loan applications in relation to the two travel courses.
“MSD Student Services has begun investigating the magnitude and timing of possible misuse of the student loan scheme by
students. The Ministry of Education is investigating the actions of the Centre.
“This investigation into students comes after reviews and audits by the New Zealand Qualifications Authority and the
Ministry of Education into PETC.
“NZQA audited PETC in June 2001 after Ministry of Education concerns at the poor results of PETC travel course
participants in 2000, and spectacular growth in 2001. NZQA’s audit revealed serious quality issues that are now being
addressed by PETC. While NZQA is now satisfied with the quality of the courses, it is reviewing their registration in
the light of the Ministry of Education investigation.
“In September 2001, the Ministry of Education reviewed PETC following another large increase in student enrolments,
on-going quality assurance issues, including continuing poor student educational outcomes.
“Information obtained during that review confirmed that as many 2000, out of the 4000 enrolled students had failed to
obtain any unit standards. Most of those had failed to submit any work. The review also revealed that in over 700 cases,
more than one member of a household was enrolling in the course, and multiple computers were being sent to the same
house, although access to a computer is required for only one of the 14 unit standards.
“In one case, 5 members of a household had enrolled, meaning that there were 5 computers in that household. Over 150
students, most of whom had achieved no unit standards, had “gone no address”.
“Since October 2001, the Ministry of Education has sought advice from the Serious Fraud Office and Crown Law Office in
relation to taking possible action. Both advised that further investigation is warranted. MSD Student Services expect to
know by the end of this month, the numbers of individual students requiring investigation.
“The Government views any misuse of the student loan scheme extremely seriously. The student loan scheme is designed to
be as open and accessible as possible and it is a shame that some students and providers are possibly taking advantage
of this.
“It needs to be remembered that the student loans are just that, and individuals have debts established against their
names so any money identified as having been obtained fraudulently will be recoverable.
“The case has demonstrated a number of loopholes that have been addressed as part of the new interim funding policy for
2002 aimed at improving use of public funding for tertiary education, improving the retention and completion rates for
students enrolled in publicly funded courses of study, and better monitoring systems for tertiary providers,” concluded
Steve Maharey.
PETC students concerned at what this means for their loans can call MSD Student Services on 0508 885 885.
Ends