Both language schools and education agencies are having cash flow problems – the result of large numbers of students not being able to start courses, or being forced to return home early.
“This is the only way not to collapse and destroy the industry”
And many of these students have submitted cancellation and refund claims – putting pressure on businesses that are always seasonal and are now facing a critical lack of bookings.
“Unfortunately, the disruption caused by the outbreak has had a catastrophic impact on this industry, and we know that both schools and agencies are facing the same challenges, through no fault of either of us,” a consortium of well-known ELT operators told agencies, in an open letter.
Despite the letter’s conciliatory tone, the ELT operators stressed that agencies must make timely payments to schools, and urged them to persuade students to accept postponements or make use of online courses.
However, agencies claim they are unable to make payments because money has already been spent, for example on airline fares. Consumer laws around the world dictate that students must be paid a refund as a result of cancellations, and so agents cannot force students to accept postponements.
Acknowledging that both agents and schools are in “exactly the same situation”, FELCA president Paolo Barilari told The PIE that the only solution is for governments to relax consumer protection laws so that students have to accept a voucher instead of a refund.
“FELCA is trying to lobby our own governments, to say, in this special situation, in such an emergency, forget to protect at the end of the consumer, and accept a system of vouchers… This is the only way not to collapse and destroy the industry.”
According to Barilari at FELCA – a global grouping of national agency associations – these vouchers could be flexible, and take the form of a digital currency like bitcoin, that could be used as regular money within the industry.
“So schools and agents and students should think, we are not cancelling the bookings, we are just suspending them for now. For a certain amount of months. And if your course is paid, instead of doing it now, you do it next year, in September or October.”
ELT operators support the principle of postponement for courses and are equally worried by the prospect of refunds for students.
“We’re fully aligned with what Paolo’s been talking about,” said Hannah Lindsay, group sales and marketing director and deputy CEO of St Giles International, one of the schools that signed the open letter.
“[The sector] is an ecosystem. In order for the schools to survive, we want the agents to survive. And agents can’t survive unless they’ve got a reasonable choice of schools.
“So if everyone’s in a position where they’re having to give a lot of refunds, it’s very, very difficult for either party to survive because we just don’t have the income generated from new bookings at the moment.”
Lindsay explained that postponement is the best option for all sides – something she thinks that agents and schools both agree on.
But despite such consensus, postponement of courses is not certain: FELCA’s task of lobbying different governments around the world to change their consumer protection laws is a difficult one.
ELT operators are insisting that online alternatives should still be seen as a solution to the problem posed by students demanding refunds.
“The schools have invested a lot of time and effort in developing a suitable online alternative at very short notice and cannot provide them for free,” the open letter to agents states.
“If everyone’s in a position where they’re having to give a lot of refunds, it’s very, very difficult”
“We are aware that some students haven’t been keen to accept this alternative or postponements and are determined to cancel courses, but it takes time for students to adjust to this unprecedented situation.”
This sentiment was echoed by Lindsay. “We’ve put loads of time into making a good online product. You know, something that’s of value and will help the students improve their English,” she explained.