To protect fees students' pay, schools must either use an escrow account, or buy insurance guaranteeing that fees are returned to students if the school folds. Following a tender exercise in June, the Council for Private Education will put in place a revised insurance scheme, which will take effect from Dec 17, to enable more competitive premiums and services.
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Here is the full statement from the Council for Private Education:
At the inaugural Private Education Conference, "Raising the Bar on Quality" in April this year, Mr Brandon Lee, Chief Executive Officer of the Council for Private Education (CPE) announced that the CPE would study how it can further streamline administrative processes, in order to reduce administrative burdens and compliance costs for Private Education Institutions (PEI). The CPE will be implementing the following changes by the end of this year.
Fee Protection Scheme - More Time, More Choices
The Fee Protection Scheme (FPS) is one of the five pre-requisites that a PEI must satisfy before applying for EduTrust certification. This requirement is necessary to provide protection for the fees paid by their students. There are currently two FPS, escrow or insurance, which PEIs can choose to adopt or a combination of both.
Currently, PEIs can purchase insurance from two insurance companies appointed by the CPE. The CPE carried out a tender exercise in June 2013 to allow for more insurance companies to be appointed, and enable more competitive premiums and services. As a result, three key changes to the FPS will take effect from 17 December 2013.
Firstly, PEIs will now have up to seven working days to purchase insurance for course fees paid by students. Currently, PEIs need to buy insurance on the same day the course fees are paid. As specified in the tender requirements for the revised insurance scheme, the appointed insurance companies will be required to provide a pre-cover arrangement of up to seven working days so that students' fees are protected even as PEIs source for insurance.
Secondly, PEIs can now source for insurance from five appointed insurance companies instead of two. The appointed insurance companies are: i. Etiqa Insurance Berhad; ii. Liberty Insurance Pte Ltd; iii. Lonpac Insurance Bhd; iv. The Overseas Assurance Corporation Ltd; and v. Tokio Marine Insurance.
Thirdly, instead of the current monthly reporting requirement for FPS data, PEIs with the four-year EduTrust award will now be required to submit FPS data to the CPE once every six months while PEIs with the one-year EduTrust Provisional award will be required to submit the data once every three months. The CPE will continue to conduct regular checks on PEIs to ensure the proper implementation of the FPS.
2013 Annual Returns Exercise - More Convenience
The CPE conducts an Annual Returns exercise to collect information on the private education sector. Previously, PEIs had to collect the pre-assigned thumb drives from the CPE and return them before the submission deadline.
Following industry feedback, PEIs will, from 30 October 2013, be able to submit the information via data-encrypted emails. This will allow PEIs to submit their annual returns securely and with greater convenience.
Reduction in the Submission of Supporting Documentation
By year-end, the CPE will also be reducing the supporting documentation to be submitted to the CPE for the notification of teacher deployment, government-accredited courses and student contract requirements for company-sponsored students. The CPE will inform PEIs of these revised requirements once the details are finalised.