Inside International Education — Issue 2

Commissions Are No Longer Just a Commercial Decision

For most of the past two decades, commissions were treated as a bilateral arrangement between providers and agents. The government set the framework — ESOS, the National Code, the agent management obligations — but the commercial terms were yours to negotiate.

That framing has changed.

The reforms are designed around a specific concern: that commission structures can incentivise behaviour that undermines visa integrity, student welfare, and sector credibility. When the incentive is wrong, the behaviour follows. And the evidence accumulated over the post-COVID surge period was hard to ignore.

The result is a framework where commissions are subject to new restrictions, and where providers are expected to be able to explain and justify every payment if asked. The days of paying on invoice without documentation or logic are over — at least if you want to be audit-ready.

The Onshore Transfer Ban: What It Means and When It Applies

There is a transition carve-out: the ban does not apply where the student was accepted for enrolment on or before 31 March 2026. If that acceptance occurred before the commencement date, you are in the transition window. After that date, the default position is that commission is not payable for these cases.

The practical impact is significant for providers in vocational pathways — cookery, aged care, trades — where onshore student conversions have been a material part of agent recruitment activity. It also directly affects agents whose practice model has been built around onshore re-enrolment, and the agents specialising in what the sector sometimes calls “rescue transfers.”

Providers need to audit their current pipeline now. If you have pending commission invoices that relate to onshore transfers accepted after 31 March, you need to understand your exposure before those invoices are processed.

When Is Commission Payable? A Stress-Test of Common Scenarios

The new framework is easier to understand through scenarios than through general principles. Here are the situations providers encounter most frequently, and how the logic now applies.

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  Course change within the same provider The ESOS framework does not prohibit commission here — this is not an onshore transfer between providers. Whether commission is payable depends entirely on your agent agreement. Best practice: treat this as a variation, not a new recruitment. Do not automatically trigger a new commission unless there is net new tuition revenue and your agreement explicitly permits a top-up. Internal changes should never be used to re-trigger commissions artificially.
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  Major pivot — e.g. Bachelor of Commerce to Cookery, same provider Commission is not automatically prohibited, but this is a high-risk scenario. A documented rationale is essential: academic progression, career alignment, or personal welfare circumstances. File notes and internal approval are non-negotiable. Without documentation, this looks exactly like the kind of agent-led churn the reforms are targeting.
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  Major pivot — student transfers from another provider If the student has commenced elsewhere and your agent recruits them to your institution, this falls squarely within the onshore transfer prohibition from 31 March 2026. Commission is not payable in most cases.
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  Deferral before commencement The student has not started. No tuition has been received. Commission should not be payable, or should be held until commencement occurs. Check your agreements — many legacy contracts do not address this clearly.
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  Deferral after commencement The student has started and tuition has been received. Commission may already be earned. However, providers should protect themselves with partial payment structures or clawback clauses tied to any subsequent refund obligation.

The pattern across all these scenarios is consistent: commission should follow genuine recruitment activity and confirmed enrolment — not be triggered by administrative re-processing of existing students.

The Questions Regulators Will Ask — and How to Be Ready for Them

The shift in the regulatory framing of commissions has a direct implication for how audits will be conducted. Previously, an audit question about agent payments might focus on whether you had an agreement in place, and whether the amounts were reasonable.

The new standard is different. Providers should now expect to be asked:

The practical response is an audit trail for every commission payment that shows: the student was a genuine new recruit (or documents why an exception applies), the payment meets the contractual trigger in your agreement, the student remained enrolled beyond any defined risk period, and there is no refund exposure that should have triggered a clawback.

This is not complexity for its own sake. It is the documentation standard the sector is now being held to.

What Else Is Moving

The commission changes are not the only thing in motion. Here is a brief read of three other developments worth tracking.

295,000 NPL — and falling grant rates. The 2026 National Planning Level was set at 295,000 new commencements — 25,000 more than 2025, a signal of managed growth. But the headline number is running against a sharp tightening at the visa grant level. Offshore student visa applications were up by over 13,000 in the seven months to January 2026, driven by providers recruiting to their higher allocations — but grants over the same period were down by over 11,000. Providers who went out and recruited on the strength of their expanded allocations are now absorbing refusals they did not budget for. The practical lesson: NPL allocation and visa grant rate are not the same thing, and the gap between them is where pipeline risk sits.

ELICOS is under severe pressure. Overall commencements declined 15% in 2025, but the ELICOS sector fell 35% — far steeper than the headline figure. The data shows a clear link between high visa refusal rates, continuous application fee increases, and enrolment losses in the English-language sector. For VET and higher education providers whose students depend on ELICOS pathways, this is a pipeline problem. Students who cannot get through the English-language entry point do not become your enrolments downstream.

The ESOS Act goes beyond commissions. The commission ban is the most visible change from the ESOS Act amendments, but it is not the only one. The ESOS Act also strengthens provider regulation, including provisions to suspend the registration of providers under serious regulatory investigation, and expands the legal definition of an education agent alongside broader ministerial powers. The International Education and Skills Strategic Framework — which will set the sector’s direction for the next several years — is expected to be released in 2026. That document will be worth reading carefully when it lands.

The Standard Has Changed

The ESOS amendments don’t eliminate commissions. But they change what’s required to pay them responsibly.

Commissions are no longer just a finance decision. They are a compliance, integrity, and governance issue. The providers who come through this period well will be the ones who pay commissions deliberately, document decisions properly, align commercial incentives with student outcomes — and can explain every dollar paid if asked.

The next edition of Inside International Education will look at what the new agent oversight obligations mean for provider-agent relationships — and how to structure agreements that actually hold up under the new framework.