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Provider default in 2026: what the TPS must do when your college closes

How the ESOS Act ladder works when your Australian college closes: refund rights, what the TPS Director must offer, and the OSTF.

If your Australian college closes, the law does not give you one single remedy — it sets up a three-rung ladder: first the provider itself must refund you or arrange a replacement course at its own cost; if it fails to do that, the TPS Director must give you options for a suitable alternative course where one exists; and behind both sits the Overseas Students Tuition Fund (OSTF), which can pay refunds and reimburse providers who place students elsewhere. This ladder comes from the Education Services for Overseas Students Act 2000 (ESOS Act), Division 2 to Division 4 of Part 5, as set out in the section 45 "Guide to this Part" on the Federal Register of Legislation (legislation.gov.au), checked against the official page in September 2026.

The rest of this article walks down that ladder in the order you will need it. It explains the statute as it is written and is general information only — it is not personalised advice about your enrolment or visa, and your own situation should be checked against the current official text and against a professional you trust.

What has to happen before the ladder starts: is it actually provider default?

Section 46A(1) says a registered provider defaults in relation to a student and a course at a location when either the provider fails to start providing the course on the agreed starting day, or the course stops being provided after it starts but before it is completed — and, in both cases, the student has not withdrawn before the default day. That last condition matters: withdrawal before the default day takes the situation out of provider default.

Two further rules shape the boundary. Under section 46A(2), a provider also defaults if it is prevented from providing a course because a sanction has been imposed on it under Part 6 of the Act — a regulator-forced stop is not treated differently from a voluntary closure. Under section 46A(3), there is no provider default where the course does not start or stops because the student has defaulted in relation to the course under paragraph 47A(1)(c).

There is also a narrow carve-out for corporate restructures. Under section 46A(4), if the provider for a course has changed to become an entity of a different kind, the ESOS agency may notify the provider in writing that the course is not taken to have ceased merely because of that change. Section 46A(5) lists what the agency must weigh when deciding whether to give that notice: the effect of the change on course delivery and student outcomes, any advice from another ESOS agency, and, for an approved school provider, any advice of the State designated authority.

What must be reported, to whom, and how fast?

Under section 46B(2), a defaulting provider must notify in writing both the ESOS agency for the provider and the TPS Director of the default within 3 business days of the default occurring. Section 46B(4) adds a separate duty: the provider must also notify, in writing, the students in relation to whom it has defaulted.

Section 46B(3) fixes the content of the notice to the ESOS agency and the TPS Director. It must include:

the circumstances of the default;
the details of the students in relation to whom the provider has defaulted;
advice on whether the provider intends to discharge its obligations to those students under section 46D, and, where appropriate, how it intends to do so.

Notices under either subsection must comply with any requirements in a legislative instrument, and section 46B(6) allows the Minister to make such an instrument specifying those requirements. Because those requirements can change, the specific form a notice must take is something to confirm against the latest official material rather than assume.

Where the money sits before you even start: the protected amount

A detail that is easy to miss explains why a closure does not automatically mean your fees vanish into a liquidation. The officially sourced page carries a Note to section 29(1) recording that providers covered by section 31 are not required to comply with this section. Subject to that Note, section 29(1) requires a provider that receives tuition fees before the student has begun the course to pay those fees into an account maintained under section 28, and section 29(2) requires it to do so within 5 business days of receiving the fees.

Section 29(3) then requires the provider to keep a "protected amount" standing to the credit of that account — enough to repay all tuition fees to every student who has paid and has not yet begun the course. Section 29(4) permits withdrawals that reduce the balance below the protected amount only for three purposes:

paying a refund under section 46D, 47D or 47E to or in relation to a relevant student;
paying an alternative provider where the provider has arranged, under section 46D, for the student to be offered a place in an alternative course at the provider's expense;
paying the TPS Director under section 50C in relation to the student.

Section 29(6) makes the ring-fence explicit: the protected amount is not available to pay the debts of any creditor of the provider, other than as allowed in subsection (4), and is not liable to be attached or taken in execution by a court at the instance of any creditor, other than as allowed in subsection (4).

The counterweight is in Note 1 to section 29(3): a student's tuition fees cease to be part of the protected amount once the student begins the course. So the account protection is strongest for fees paid before commencement; once teaching has started, you are relying on the obligations further down the ladder rather than on money already set aside.

Rung one: the provider's own obligation to refund or replace

Division 2 of Part 5 sets out the obligation on registered providers to provide refunds to students. The section 45 guide adds the alternative: in the case of a provider default, the provider may instead provide alternative courses for the students at the provider's expense. The word "instead" is doing real work — the replacement course is a discharge of the refund obligation, not something extra, and the provider, not the student, bears the cost.

Rung	Who must act	What you receive	What triggers it
1	The registered provider	A refund under Division 2, or a place in an alternative course arranged at the provider's own expense	Provider default under section 46A
2	The TPS Director	Options for suitable alternative courses, where any such courses are available	The provider defaults and fails to discharge its Division 2 obligations
3	Overseas Students Tuition Fund (OSTF)	Payments to refund students, and to reimburse providers who place students in alternative courses	A provider has failed to discharge its obligations (a "call on the OSTF")

Rung two: what the TPS Director must do

Under Division 3, the trigger is not the closure itself but the provider's failure. As the section 45 guide puts it: if a provider defaults and fails to discharge its obligations to a student under Division 2, then the TPS Director must provide the student with options for suitable alternative courses, if any such courses are available.

Two things follow from that wording. The duty is expressed as a duty to provide options, and it is limited to courses that are suitable and that actually exist — the guide's "if any such courses are available" is part of the rule, not a footnote. Where the first rung has not resolved your enrolment, this is the rung that carries the obligation forward.

Rung three: when a call is made on the OSTF

Under Division 4, payments can be made out of the Overseas Students Tuition Fund to refund students, and to reimburse providers who provide students with alternative courses, when a provider has failed to discharge its obligations. The guide names this "making a call on the OSTF".

Note what the text does and does not say. The stated trigger is the provider's failure to discharge its obligations — the guide does not set out a rule that a suitable alternative course must be unavailable first, nor does it set a fixed payout amount or timeframe. Those are the kinds of details that, if they matter to your situation, have to be confirmed against the current official material rather than inferred from the Act's structure.

What can a student reasonably insist on?

Read together, the three rungs give you three things to hold on to. First, a decision either way must be made by someone: the provider must tell the ESOS agency and the TPS Director, within the notice, whether it intends to discharge its section 46D obligations and how. Second, the cost of a replacement course is not yours to carry at the provider's stage — the replacement is at the provider's expense, and the protected account can lawfully be drawn down to pay an alternative provider for exactly that purpose. Third, the failure of one rung does not end your position: the TPS Director's duty arises precisely when the provider does not discharge what it owes.

What the statute does not do is promise a particular outcome for you personally. Whether you end up in a different course or receive money back depends on where the provider's obligations break down and on whether suitable alternatives exist — and this article cannot predict either.

Situations where the ladder does not begin

Three scenarios sit outside provider default, and it is worth separating them:

You withdrew before the default day. Section 46A(1)(b) requires that the student has not withdrawn before the default day; where that condition fails, the provider default pathway is not engaged on these rules.
The stoppage traces back to your own default. Section 46A(3) excludes provider default where the non-start or cessation happens because the student defaults under paragraph 47A(1)(c).
The provider merely changed legal form. Under sections 46A(4) and (5), the ESOS agency may notify that the course is not taken to have ceased just because the provider became a different kind of entity, having regard to the effect on delivery and outcomes and to advice from other ESOS agencies or the State designated authority.

Also keep the section 29 timing in view: fees paid before you begin are the ones covered by the protected amount, and the fees stop being protected once your course begins. That is a structural feature of the scheme, not a judgement about any particular student's case.

Frequently Asked Questions

Does my college closing automatically count as provider default?

No — it depends on the course and on you. Under section 46A(1), there is provider default where the provider fails to start the course on the agreed starting day, or the course ceases after it starts but before completion, and the student has not withdrawn before the default day. Both parts have to be satisfied.

What if the college was shut down by a regulator rather than closing voluntarily?

Section 46A(2) removes any doubt: a provider defaults if it is prevented from providing a course at a location because a sanction has been imposed on it under Part 6. A regulator-imposed suspension is treated the same way as a closure for these purposes.

How quickly must the provider report a default, and to whom?

Under section 46B(2), the provider must notify its ESOS agency and the TPS Director in writing within 3 business days of the default. Section 46B(4) separately requires the provider to notify the affected students in writing.

What has to be in that notice?

Section 46B(3) requires the circumstances of the default, the details of the students affected, and advice on whether the provider intends to discharge its obligations to those students under section 46D and, where appropriate, how. Notices must also meet any requirements in a Minister's legislative instrument under section 46B(6).

Is my pre-paid tuition safe if the college goes into liquidation?

For fees paid before you began, and for providers that are required to comply with section 29 (the Note to s 29(1) records that providers covered by section 31 are not required to comply with this section), the Act builds in protection rather than leaving those fees as an ordinary debt: section 29(3) requires a protected amount to be held for such students, and section 29(6) says it is not available to pay any creditor's debt and is not liable to be attached by a court at a creditor's instance, except as section 29(4) allows.

Does the protection cover fees I paid after starting the course?

Not in the same way. Note 1 to section 29(3) states that a student's tuition fees cease to be part of the protected amount once the student begins the course. From that point your position depends on the provider's Division 2 obligations, the TPS Director's role and the OSTF, rather than on money being held aside.

When does the OSTF actually pay?

Division 4 allows payments out of the Overseas Students Tuition Fund to refund students and to reimburse providers who place students in alternative courses, when a provider has failed to discharge its obligations — described in the section 45 guide as making a call on the OSTF. The Act as sourced here does not set out amounts, timeframes or any additional precondition beyond that failure.