News that all GEOS English language schools in Australia have closed with debts in excess of A$10 million comes at an unfortunate time for backpacking, which has recently started cosying up to an industry which brought 160,000 young people to Australia in 2008.
The two industries certainly seem to have lots in common. They both cater for young people looking to broaden their experience through study, work and travel overseas. They both rely on agents in source markets to attract customers, often paying high commissions to keep them away from competitors. And they both employ staff on casual contracts and low wages, making them easy to get rid of when times are tough.
Looking at GEOS in Australia, it’s easy to conclude they also both have members capable of bringing bad publicity crashing down on everyone else’s heads.
According to The Age, the Victorian Registration and Qualifications Authority had recently become concerned about GEOS following a financial audit, with allegations directors had been diverting revenue from its Melbourne school to support operations elsewhere in Australia and overseas.
Meanwhile, in a statement following the collapse, administrators Ernst and Young said: “The financial situation of the companies is such that the schools are not able to be re-opened. We are continuing to investigate the financial affairs of the companies and will report to key stakeholders in due course.”
With students and staff owed more than A$10 million, they are certainly entitled to ask where all their money went.
Fortunately, GEOS was a member of peak industry body English Australia, which will be working hard to ensure all its students are placed elsewhere.
But despite EA’s best efforts, this will play incredibly badly overseas, where prospective students are still digesting news of the collapse of Chinese-owned vocational college group Meridian in November 2009, which left more than 3000 students in Melbourne and Sydney stranded.
Following the recent bad publicity in India over student bashings, the seemingly unstoppable rise of international student numbers into Australia might soon become a thing of the past.