Is bonding the only answer?

IF you want to become the proprietor of a private commercial third-level college in Ireland all you have to do is buy a brass plaque, engrave it suitably and stick it up on your garage. And this is legal.

You need a licence to own a dog but not to start a private commercial third-level college. There is no legislation demanding that you run courses to a certain standard or that you have financial arrangements to protect students in the event of the your college/garage collapsing.

In the absence of appropriate legislation or a licensing system, last week's collapse of the Advanced Technology College in Merrion Square, Dublin, which left 500 students in the lurch is hardly surprising.

But, there are those that would argue that State licensing of this type of private sector activity is an over-simplistic and inappropriate response to a complex issue, and, indeed, would constitute a move towards a Soviet-style economy. People have a right to set up businesses, subject to the normal controls, in a free market economy.

At present there is one set of rules governing private third-level colleges but it does not deal with financial arrangements in the event of collapse and it is purely optional. For students to avail of income tax relief on their fees the college must meet standards for the approval of colleges and courses laid down by the Minister for Education in May 1996.

Essentially a college must satisfy the Minister that it operates to standards similar to those in universities or in institutions to which the National Council for Educational Awards Act applies and three or one-third (whichever is the lesser) of its full-time undergraduate courses of two academic year's duration must be approved by the NCEA (this latter requirement commences in the 1998/99 academic year). For courses to be approved, the institution itself must be NCEA approved. Each course is then examined on its own merits.

The Department has disclaimed any responsibility for the students of ATC on the grounds that it is not NCEA-designated and is not on the list of colleges approved for the purposes of tax relief - it did apply but was turned, down. However, even if it had been NCEA-approved, it is unlikely that the students would be in any stronger position.

An NCEA spokesman explains that their role is to ensure the quality of the staff, courses and facilities at a college. Once a year the NCEA does collect information on safeguards which private commercial colleges have put in place to protect their students. However, this is purely a statistical exercise.

When the guidelines for tax relief were drawn up, a working group advised the Minister that the issues of academic bonding (where students can finish their courses in that college or elsewhere) and financial bonding should not be incorporated into the code of standards but should be dealt with separately. There was some discussion within the working group about possible types of bonding and the difficulties of putting an arrangement, such as that in the travel business, into place, as the same volume of custom is not involved.

The White Paper on Education states that "in future, such institutions running courses which receive State certification for their awards will be subject to new control regulations". Almost two years later this aspiration is still awaiting implementation.

A Department press release last Thursday stated that control procedures will be the responsibility of TEASTAS, the national certification body. The Department has started discussions with TEASTAS about "the system of approval for private institutions seeking State certificate." The wording does not suggest that a State licensing system for all private third-level colleges purporting to offer third-level education is in the offing. It appears colleges will have to voluntarily seek State approval so those who wish to operate without it can continue to do so with impunity. Good news if you adhere to the free-market argument, but bad news if you feel some form of licensing is needed.

One private college - Portobello, in Dublin - has put its own bonding arrangement in place. A trust company, Portobello College Holdings, has been established. Ray Kearns, college president, says that this ensures that, in the event of collapse, students will be able to continue studies in the college until they graduate.

Sufficient security - Education & Living understands this is in the order of £1 million - has been put in place to ensure staff can be paid and the college can stay open for the necessary period for all students to graduate. While Kearns would not divulge the exact nature of the arrangement, he says that the bonding has been done in conjunction with AIB.

Brian Gaffney, chairman of HECA, an association which represents a number of private colleges which are NCEA-designated, says that a national bonding scheme is necessary. A fund must be built which would ensure that students can continue their studies in the event of a college failing, says Gaffney.

This might be achieved through a percentage of fees being paid into the fund, he suggested. HECA is keen to go ahead with a bonding arrangement but Gaffney believes that the Department must be involved so that a transparent, standardised arrangement is put in place. HECA is currently developing proposals for academic and financial bonding.

PROSPECTIVE students, looking at private third-level colleges need to ask hard questions. There are good reputable private commercial colleges with long-standing reputations. How do you identify them? Who awards the qualifications for the course in which you are interested? What financial arrangements has the college in place in the case of collapse? What calibre of staff is employed? What facilities (library, lab, computers etc.) are available? What is the college's track record? How long has it been established? Where have its graduates found work?

It may seem like a lot of extra work but, otherwise, you could be left halfway through a course, with no qualification and no redress. In fact, the £10,000 or so you might spend in fees over four years might be better used in purchasing your own brass plate and setting up your own private education institution. And remember, if you own a dog, you need a licence.