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.

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