A new-ish Ombudsman has the power to review higher education providers
The National Student Ombudsman is a new Ombudsman which was set up in 2024 under the Ombudsman Act 1976 (Cth). The Ombudsman recently criticised a Higher Education Provider called ‘Crown Institute of Higher Education’.
What does this criticism tell us about how much Higher Education Providers know about the law that governs them? And what does it tell us about how they are being regulated?
A student code-named ‘Hari’ was enrolled in a ‘Master of Information Technology’. According to the Government’s website, this is a masters degree for which Crown now charges around $44,500. Crown’s website describes the course as:
The Bachelor of Information Technology is a three-year full-time… course that enables students to acquire a broad and coherent knowledge of the key theories and practices that underpin the practice of Information Technology professionals, who operate in dynamic business contexts.
Hari had tried to withdraw from his course at Crown. However, Crown ‘refused’ his withdrawal. He withdrew because his student visa was not renewed after his first semester at Crown. Crown said he did not apply to withdraw ‘in time’ (that is, 2 weeks before a certain date, according to their policy).
He tried to get his enrolment fees back, but Crown refused to pay them.
Hari went to the National Student Ombudsman. The Ombudsman’s report about Hari’s complaint, published in September 2026, is here.1
In that report, the Ombudsman criticised Crown for specific errors, a fundamental misunderstanding of the concept of ‘withdraw’ under the Act, a refusal to take previous advice from the Ombudsman, and systemic errors. The Ombudsman wrote:
‘The NSO remains concerned that CIHE has confused its obligations regarding withdrawals and student release especially given the OSO has previously provided feedback to CIHE about this same issue; which indicates a systemic issue that CIHE must address.’
What did the Act say that Higher Education Providers had to do?
The Education Services for Overseas Students Act 2000 was one of the Acts which governed Crown’s operations. The ESOS Act was, in fact, key to the scheme by which the Higher Education Providers operated. You can find the current version of the ESOS Act here.
Education Services for Overseas Students Act 2000
A student who withdrew from a course could, in certain circumstances, obtain a refund of their enrolment fees.
Section 47A of the ESOS Act is called: ‘When a student defaults’. It states:
(1) An overseas student or intending overseas student defaults, in relation to a course at a location, if:…
(b) the student withdraws from the course at the location (either before or after the agreed starting day); …
It seems pretty simple. The Act uses the phrase ‘the student withdraws’. It did not give power to Crown to refuse to let a student withdraw.
Crown said it ‘refused’ the withdrawal in accordance with its policy. But the Ombudsman said it’s up to the student whether or not they withdraw, and Crown could not stop it. Once the student withdraws, there is a right to a refund of the enrolment fees in the Act. Conditions may apply, but the Act uses the word ‘must’, eg:
‘The registered provider must pay a refund… to the student…’ (s 47D and 47E of the ESOS Act).
The Ombudsman stated that Crown was not following the Act. It had to ‘accept’ the student’s right to withdraw, and refund the student.
(By the way, I have struck this issue before when entities operate under a statute: they may think they have power to ‘allow’ things or ‘stop’ things, despite the fact that their Act provides nothing of the sort.)
But that’s not all. Crown’s general policies and practices were wrong.
The Ombudsman recommended that Crown change its policy, and educate its staff.
Crown had bigger problems than just one student. Their whole policy and attitude to student refunds was wrong. As a higher education provider, one might think that their perspective on this important question was in line with the legislation. But it was not.
Sadly, even government agencies and departmental staff are not always clear about the importance of their statutory framework. Here’s one example.
And then there was the question of the refund amount.
Crown also argued about the amount of the refund. The Ombudsman found that they did not calculate the refund owing legally. They had to follow the government’s ‘Education Services for Overseas Students (Calculation of Refund) Instrument 2024 (‘Refund Instrument’). Crown’s policy was wrong and did not comply.
The Ombudsman wrote:
‘Under s 47E(2) of the ESOS Act, higher education providers must work out the refund amount in accordance with the Refund Instrument.’
Brazenly, Crown said that they had this policy because the law was ‘unfair’ to providers.
But that’s not all.
The Ombudsman recommended that Crown audit other requests for refunds by students
The Ombudsman looked at complaints made by other students, and recommended that Crown audit all requests for refunds, as it looked like Crown had a major systemic issue.
What sort of tone does Crown show in its responses?
The tone of Crown’s responses shows that they placed their financial goals and policies above the legislation. Here is part of one of their responses.
‘Education providers need to maintain clear withdrawal and refund policies to protect their legitimate operational and financial interests…
An education provider requires reasonable notice of a student’s intention to withdraw so that it can appropriately manage staffing, classrooms, teaching resources and other operational commitments.
Providers generally engage lecturers, allocate classrooms and arrange academic and administrative resources based on the number of students enrolled at the commencement of a semester. If students were permitted to withdraw at any time without reasonable notice or financial consequences, providers could remain liable for substantial costs that had already been committed. Such an approach would place significant pressure on the sustainability of the provider’s operating model.
CIHE therefore considers that the NSO’s recommendation does not adequately take into account the operational and financial realities of education providers.’
What came first, to Crown?
Not the law. Not the legislation which set up the whole education provider scheme by which they operated and attempted to make a profit.
But operational interests and financial interests. Crown did not see that they were created by a parliamentary scheme. They saw themselves as a business (albeit with some kind of statutory ‘background’?)
What questions does this report raise?
Quite a few questions are raised by this Ombudsman report.
- How can a Higher Education Provider be so ignorant of the law?
- How can a Higher Education Provider be so confident that its financial model is more important than the law?
- Why was Crown so resistant to the Ombudsman’s recommendations and guidance?
- Who is regulating Higher Education Providers to ensure that this does not happen?
One conclusion
One conclusion I draw is the same one I have drawn through years of advice and training to government and public service entities. The law which created you, empowered you, and governs what you do, trumps your own goals, policies and practices.
Learn this, apply it, and get it right.
- Source: Licensed from the Commonwealth Ombudsman under a Creative Commons
4.0 licence. This report is available from the Commonwealth Ombudsman website at
www.ombudsman.gov.au. ↩︎