Parliamentary Replies
Second Reading Speech on the Private Education Bill, Parliament Sitting on 14 September 2009
Mr Speaker, Sir, I beg to move, “that the Bill be now read a Second time.”
Background
Sir, allow me to first set the context for the Private Education Bill.
The regulatory regime for the private education (or PE) sector started with a “light-touch”. This was because the industry was nascent in the 70’s and 80’s with little demand and few players. Schools were registered if they met basic requirements such as approval for usage of premises and fire safety clearance and some rudimentary checks on school management and teachers. Registration did not represent endorsement or assessment of the quality of the academic programmes. Students were reminded to do their own due diligence when enrolling in these programmes.
Between 1987 and 1997, the number of private schools registered with MOE doubled from 150 to 305. Consequently, measures were taken to provide a level of quality assurance. The Ministry of Trade and Industry facilitated the establishment of quality assurance schemes which the better private schools could aim to attain. These are the CaseTrust for Education certification, administered by the Consumers Association of Singapore (CASE), and the Singapore Quality Class for Private Education Organisations (SQC-PEO), administered by SPRING Singapore.
Moving forward, even these measures are no longer adequate. The private education sector now attracts a large number of local as well as international students who are drawn by the Singapore brand. The number of private schools quadrupled between 1997 and 2007, from 305 to 1,200. The number of full-time international students enrolled in the private schools also grew in tandem from 9,000 in 1997 to 37,000 in 2007. In 2008, there were about 120,000 students enrolled in these private schools of which 45,000 were from overseas.
The exponential growth of the sector has resulted in a highly uneven spread of academic and governance standards amongst the private education institutions (or PEIs). Some were found to have engaged in dubious or unscrupulous practices, which have adversely affected Singapore’s reputation. In the last few years, the closures of a few PEIs have also left their students stranded. It is, therefore, in the interest of all stakeholders that we tighten up standards and accountability under a New Regulatory Framework which will stand for quality and reliability.
Sir, my Ministry will adopt a three-pronged strategy to strengthen and uplift the private education sector. First, we will put in place a more robust regulatory framework through the enactment of the Private Education Bill. Second, we will step up efforts in consumer education. Third, we will work with industry associations and PEIs to develop the private education sector so as to raise the quality of provision and student welfare over time. Given the diversity of the private education landscape, MOE cannot do this alone and we will need support from industry, consumers, the general public as well as Members of this House.
I will first touch on the new regulatory framework which has three key components:
The Council for Private Education (CPE) to be established as the sectoral regulator and developer;
The mandatory Enhanced Registration Framework (ERF); and
The voluntary EduTrust Certification Scheme.
Let me now elaborate on each of these three components.
Council for Private Education
Hitherto, MOE’s primary mission over the last 40 odd years since our independence has been focused on delivering a world class public education system. MOE’s expertise is largely in this public education domain where the mandate, goals and constraints are substantially different from those within the private education sector. Part II of the Bill, therefore, provides for the establishment of the CPE as a new statutory board, which will allow it to build up the requisite capabilities for a different operating environment in the private sector.
The Council for Private Education will comprise a Chairman and between 5 to 17 members to be appointed by the Minister for Education. The CPE will be supported by a pool of full-time staff to fulfil the regulatory and developmental functions. As the sectoral regulator, the CPE will have authority over matters such as registration; quality assurance certification; and investigations and enforcement action against errant PEIs. The CPE will also have the powers to develop codes of practice relating to private education matters, enter into contracts, form partnerships and companies, and charge fees in the course of its work.
Beyond the regulatory role, the CPE will promote consumer awareness; provide student services; and facilitate industry development. The CPE will drive public education initiatives and enhance the channels that prospective and current students at PEIs can turn to for assistance. The CPE will collaborate with other government agencies to develop the sector and its capabilities.
Mandatory Enhanced Registration Framework
Sir, Part III of the Bill provides for aspects related to the regulation of Private Education Institutions. The regulatory scope of the PE Bill as defined in the First Schedule primarily covers PEIs which offer degree, diploma or full-time certification programmes at the post-secondary level, and those which offer full-time preparatory courses for entrance to our mainstream schools, or for external examinations. Such PEIs have a significant impact on the Singapore education brand and involve major investments by the students, Singaporean and foreign, in terms of course fees and time. About 1,000 of such PEIs will be covered under the new regime.
Online and virtual PEIs operating in and from Singapore and offering the types of courses mentioned above will also be required to be registered with the CPE. This is to guard against Singapore becoming a staging point for online degree mills and other similar virtual setups. Singapore-based private operators who offer accreditation services and examination certification services overseas will also come under the scope of the PE Bill.
Sir, the aim of the Enhanced Registration Framework is fourfold:
Raise corporate and academic governance standards;
Enhance student protection measures;
Compel disclosure of key information by PEIs; and
Require PEIs to seek, on a regular basis, fresh approval to renew their registration.
I would now like to highlight key provisions in the Bill that will enable us to achieve these objectives.
Raise Corporate and Academic Governance
Clause 37 of the Bill aims to ensure that sound academic and corporate governance systems are in place for PEIs. The PEI is required to be a registered company or society; must ensure that its teachers have the relevant qualifications and experience; and that its managers are fit and proper persons.
A key enhancement under the Bill is that the line of accountability for the conduct and practices of PEIs is made clearer in the new regulatory regime. In this regard, Part I of the Bill defines a manager of a PEI as any director, partner or member of its committee of management, and includes any person who has management of the PEI. In line with good corporate governance, this provision in the Bill ensures that accountability for any misconduct by the PEI can be traced back to the actual persons who exert management influence over the PEI.
The managers are responsible for a set of prescribed responsibilities, as spelt out in Clause 41 of the Bill. These include the keeping of proper records; providing for students affected by the PEI’s closure to complete their enrolled course or a similar one in another PEI; and furnishing information requested by the CPE within the stipulated duration. The failure of a manager to fulfil his responsibilities without any justifiable reason will constitute a criminal offence. The CPE will also have the power to direct any PEI to suspend or remove any of its managers if they are found to be inadequate in carrying out the responsibilities of managing the school or are unable to discharge their prescribed duties, as provided for in Clause 42 of the Bill.
Academic governance will also be tightened under the new regulatory regime. Clause 43 requires PEIs to seek CPE’s permission to offer courses; failure to do so will constitute a criminal offence. In processing these applications, the CPE will verify the authenticity of the qualifications offered and the standing of the institutions issuing them. Additionally, Clauses 46 and 47 protect the public from false or misleading advertisements. Clause 43(12) makes it an offence for PEIs or any persons to advertise courses not permitted by the CPE, or solicit or receive any fee from any student in respect of such courses. PEIs found to be committing any of these offences would be liable to be de-registered.
For the purposes of Clause 43, regulations will be made for the CPE to also tighten the requirements for any PEIs applying to offer external degree programmes (or EDPs). For example, CPE will examine the track record and standing of the foreign institutions issuing the degrees. In addition, these foreign universities will have to commit that the degree programmes offered at the local PEIs are recognised by their home country authorities; are subject to the same academic approval and assurance processes as the programmes offered at their home campuses, and that the graduates here receive equivalent recognition, treatment and privileges as those enrolled in their home campuses.
With these more stringent requirements coming into effect, some PEIs may have to cease offering certain EDPs which do not meet the new criteria. PEIs will be required to provide the CPE with clear plans to address the needs of students currently enrolled in such EDPs, including the possibility of switching to an alternative programme.
Enhanced Student Protection Measures
The Enhanced Registration Framework will also provide for stronger student protection measures. Clause 60 of the Bill empowers the CPE to direct PEIs to issue refund of the fees paid by students should the PEIs fail to deliver the courses which the students have enrolled in. The CPE may also make regulations to stipulate the maximum amount of fees a PEI may collect upfront from the students so as to mitigate the financial impact of sudden school closures.
To ensure that PEIs do not misrepresent themselves or the courses that they offer, Clauses 37 and 39 of the Bill restrict any PEI from using names and terms which are false or misleading, while Clause 46 of the Bill prohibits any person or PEI from publishing false or misleading advertisements. Clauses 40 and 47 of the Bill also empower the CPE to direct the PEIs to take remedial action.
Under Clause 64 of the Bill, the CPE may prescribe dispute resolution schemes and make regulations to require registered PEIs to participate in such schemes. In doing so, the CPE aims to provide aggrieved students with ready access to cost-efficient and expeditious means of seeking redress in resolving disputes with PEIs. Disclosure of Key Information by PEIs
The Enhanced Registration Framework will also compel PEIs to disclose key information on its premises, courses and teachers to enable students to make informed choices. The CPE will have the authority under Clause 63 of the Bill to publish relevant information on the PEIs on the CPE’s website. This includes the list of PEIs which have been de-registered or have had their EduTrust certifications withdrawn owing to the contravention of terms and conditions that were imposed.
In addition, Clause 62 of the Bill empowers the CPE to obtain information from the PEIs when the need arises. System of Renewable Registration for PEIs
Under the current Education Act, registration for PEIs is a one-off exercise. Under the new regulatory regime, PEIs will need to be approved by the CPE before they can be registered to operate. Registration status will have a specified validity period to be determined by the CPE as provided for under Clause 36 of the Bill. The validity period of a PEI’s registration status may vary based on how well the PEI measures up to the registration criteria. This will incentivise PEIs to improve their standards in order to attain a longer period of registration. In addition, the CPE has the power to suspend or cancel the registration status of PEIs under Clause 38 of the Bill.
Enforcement, Offences and Penalties
Sir, even as we place the onus on the PEIs and their managers under the new regulatory regime to internalise their obligations as responsible education service providers, the CPE will be stepping up its efforts to monitor the PEIs and, where necessary, undertake enforcement action. In this regard, provisions have been made under Clauses 57 and 58 of the Bill for CPE inspectors to have the necessary investigative and enforcement powers to conduct regular audit checks and to investigate any complaints against PEIs. Clauses 48 and 61 of the Bill also provide for a full range of actions and penalties to allow the CPE to calibrate its enforcement actions.
Some contraventions by the PEIs would constitute a criminal offence with deterrent penalties. For example, a PEI or manager who intentionally makes false statements to the CPE; obstructs or impedes the CPE’s inspection or investigation work; or refuses to comply with the remedial action directed by the CPE, shall be liable for a conviction with a fine or jail term or both.
The Bill also ensures that there is an effective redress mechanism for parties aggrieved by the regulatory decisions or directions of the CPE. Such aggrieved parties can appeal to an Appeals Board which will be appointed by the Minister and administered independent of the CPE. Part V of the Bill provides for the establishment of the Appeals Board by MOE.
Transitional Arrangements
Sir, this Bill will certainly raise the standards of governance and accountability of PEIs, and the protection they accord to students. However, it is in the interest of all stakeholders to ensure a smooth transition from the prevailing regulatory framework. To minimise disruption to students as well as to the operators in the transition to the new regime, Clause 74 of the Bill provides for the CPE to make the necessary transitional arrangements for PEIs crossing over to the new mandatory enhanced registration framework. Upon the commencement of the Private Education Act, PEIs which are currently registered under the Education Act will be accorded “deemed registered” status for a period of 18 months. These PEIs will have to attain registration in compliance with the enhanced criteria of the new regulatory regime, if they wish to continue to operate beyond this 18-month window period.
There is another segment of PEIs which are currently not required to register under the Education Act but will fall under the regulatory scope of the new Bill. These are private schools set up by registered societies, and privately-funded vocational schools offering full-time education leading to various forms of certification. Upon the commencement of the new regulatory regime, Clause 74 requires these PEIs to come forward within 2 months to submit their applications for registration, if they wish to be able to continue to operate until either they attain their registration under Part III, or their application is rejected or withdrawn.
Our aim in this transition is to give PEIs a reasonable period to upgrade and meet the required standards. PEIs who do not meet standards despite this grace period risk non-renewal of registration. Notwithstanding this grace period, the CPE will not hesitate to act against any errant PEIs. This is necessary to maintain high standards for our private education sector.
Voluntary EduTrust Certification Scheme
Sir, I will now move on to the EduTrust Certification Scheme, to be established under Clause 49 of the Bill. The EduTrust scheme is a quality mark. It differs from CaseTrust in two important ways. First, it sets higher standards. Second, its coverage is wider. For example:
EduTrust imposes additional requirements on PEIs with respect to their academic, financial and administration processes; student welfare matters; and partnerships with external recruitment agents.
In the area of student welfare, PEIs will be required to have clear policy on fees and refunds, effective complaint resolution procedures, and appropriate student counselling and support services. While CaseTrust mandates fee protection for only international students, the EduTrust scheme mandates fee protection for both international and local students.
PEIs will also need to have qualified academic supervisors and teachers, and well-defined structures for programme development, assessment, progression and performance review.
Therefore, not all PEIs who currently have CaseTrust certification will obtain EduTrust certification. However, the CPE will provide a grace period for such PEIs to upgrade themselves, and provide information to prospective students in the meantime.
Given the higher standards under the EduTrust scheme, making it mandatory will lead to PEIs incurring significant additional costs to attain such certification. Inevitably, these costs will be passed on to the students when the market may not require such additional measures. For example, there are currently several hundred small non-CaseTrust-certified PEIs, offering short skills-based courses of less than 6 months catering to specific industry needs. Instead, a voluntary EduTrust scheme allows better PEIs a mechanism to differentiate themselves based on quality if they so desire.
The market will recognise the EduTrust mark as a signal of confidence and quality. As such, it is in the interest of genuine education services providers to be EduTrust-certified so as to distinguish themselves as the better players in the sector.
Stepping Up Consumer Education
In tandem with the implementation of the enhanced regulatory framework, CPE will step up efforts to cultivate consumer sophistication through the provision of accessible and transparent information on the private education sector for students. The setting up of a Student Services Centre will be key to this effort. The Centre will convey student advisory information and facilitate student support and protection services. The Centre will be the first stop to handle complaints from students. For disputes that require professional services in mediation and arbitration, the aggrieved students and PEIs will be directed by the CPE to resolve their disputes in a formal and responsible manner through CPE-appointed dispute resolution centres.
Developing the Private Sector
In addition to its regulatory role, the CPE will also facilitate the development of the industry. The immediate focus of the CPE in this regard will be to work with industry partners to assist PEIs to prepare for the higher standards of the Enhanced Registration Framework and EduTrust Certification Scheme through workshops and forums. Partnering other government agencies, the CPE will also help PEIs enhance their system and manpower capabilities through capability development initiatives. The CPE will also look into strengthening the industry association so that it can serve as a key partner in mobilising support amongst industry players.
With the levelling up of the private education sector’s standards over the next few years, the CPE aims to work with industry leaders and associations to create a stronger culture of accountability and responsibility among the PEIs. While legislation will still be employed where necessary, in the long run, this culture of accountability together with a higher level of consumer sophistication will be the foundation of the industry’s development and growth.
Industry and Public Consultation
Sir, in formulating this Bill, my Ministry has conducted two public consultation exercises to seek feedback on the new regulatory framework from the public and key stakeholders of the sector so as to further refine the regulatory requirements. The first public consultation exercise, conducted over a period of 8 weeks from March to May this year, focused on the key principles and requirements of the proposed Enhanced Registration Framework and the EduTrust certification scheme. In this period, my Ministry also conducted industry briefings and focus group discussions with PEIs to facilitate their understanding of the new regime as well as to obtain feedback. This was followed by a second public consultation exercise on the actual draft of the Private Education Bill in July.
Overall, there is broadbased support for the government’s move towards tighter regulation of the private education sector. We have also received unequivocal support from private education providers who welcome the move to preserve and enhance the industry’s integrity and reputation. My Ministry has received useful comments and suggestions from the two public consultation exercises and, consequently, has made a number of modifications to the new regulatory framework and Bill.
Even as we recognise the public support for enhancing the regulatory regime, we are mindful that the transition to a new system with higher standards and expectations will have varying effects on industry players and students. The public should expect and be prepared for some changes in the industry, including closures and consolidation. Our ultimate goal is a strong private education industry that can deliver quality education to students.
Conclusion
Sir, I would like to conclude by emphasising that a strong regulatory framework, while necessary, is not a panacea. Regulatory systems in all countries aim to assure consumers of certain quality standards. While risk can be mitigated, it can never be completely eliminated. The new system cannot by itself guarantee student satisfaction, avert school closures or prevent regulatory infringements. We need the support and collective ownership of all stakeholders, including the private education providers and the students, to make the learning experience in Singapore an attractive and enriching one. PEIs must realise the need to constantly upgrade themselves to meet the challenges of an increasingly competitive international education landscape and the rising expectations of students. Students themselves must be more discerning and deliberate in their choice of education pathways and institutions.
Singapore has forged a reputation for excellence in its public education system. Students from all over the world are attracted to Singapore on the strength of our mainstream schools and world-class tertiary institutions. MOE will continue to invest in the public education sector and uphold these standards.
The private education sector will need to level up its standards and be developed further to compete on academic rigour and credibility, rather than on price or expediency. Over time, as the new measures take effect and as students gravitate towards higher-quality institutions, the overall standards in the industry will improve. The Private Education Bill is timely in providing for the necessary legislative framework to guide the private education sector in that direction.
Sir, I beg to move.