Jurisdiction brief · AU

Australian school closes: who receives the refund when parents paid the fees (2026)?

18 September 2026 · 8 min read · 1,757 words

Where a refund is required to be paid under s 47D of the Education Services for Overseas Students Act 2000, it is not routed to whoever paid the fees: under s 47D(3) the provider must pay it to the student, unless the written agreement made with the student under s 47B names another person to receive it. For refunds under s 47D, that one specification is what moves both the money (s 47D(3)(b)) and the right to recover it (s 48(2)) onto a parent or other fee payer, and it is the same specification that s 50B(3)(b) refers to where a refund was required to be paid under s 47D. This follows the official text of the Education Services for Overseas Students Act 2000 on the Federal Register of Legislation, as of the September 2026 official text.

Who receives the refund by default?

Section 47D(3) gives a registered provider exactly two possible payees: the student, or — if the agreement specifies a person other than the student to receive any refund under that section — the specified person. There is no third route in the provision. The default is the student, and everything turns on whether the written agreement displaces it.

The agreement that matters is the one the provider enters into with the student under s 47B. A payer’s position is therefore not created by the fact of payment, by a bank transfer record, or by an informal family arrangement. It is created by the contract.

Does the same rule follow the money when a school closes?

When a call is made on the Overseas Students Tuition Fund (OSTF), s 50B(1) requires the TPS Director, as soon as practicable, to pay out of the fund an amount equal to what the provider must still pay to satisfy the Division 2 refund requirements. Where that payment lands is then governed by s 50B(3):

Situation	Who the TPS Director must pay
The student has accepted a place in an alternative course under s 49	The registered provider of that course (s 50B(3)(a))
A refund was required under s 47D, and the agreement names a person other than the student to receive it	The specified person (s 50B(3)(b))
Neither of the above	The student (s 50B(3)(c))

Two points follow from that structure. Where a student is placed into a replacement course — the usual outcome after a closure — the money goes to the new provider rather than back to the family. And the specified-person branch in s 50B(3)(b) is framed around a refund required under s 47D; where it does not apply, s 50B(3)(c) returns the payment to the student.

Section 50B(2) allows the TPS Director to spend more than the refund entitlement only where the student has accepted a place in an alternative course in accordance with s 49, and doing so would best protect the student’s interests and would not jeopardise the sustainability of the OSTF. Under s 50B(5), the Minister may by legislative instrument specify requirements for payments made under the section, so the instrument currently in force forms part of the picture.

What if the student takes a replacement course instead of a refund?

Then s 50B(3)(a) applies and the funds follow the placement. In practice, prepaid tuition is carried into the new course rather than returned. What is left over is not absorbed by the provider: under s 50B(4), if the amount paid for the alternative course exceeds the cost of that course, the TPS Director must pay the difference to the person identified in s 50B(3)(b) or (c). For a family that prepaid several years of fees, that surplus rule is the part that decides whether any cash actually comes back.

Can the fee payer sue for the money?

Section 48(1) lets an overseas student or intending overseas student recover an amount owing under the Division as a debt by action in a court of competent jurisdiction. But s 48(2) changes the claimant where the provider owes an amount under s 47D and a person other than the student is specified in the s 47B agreement: in that case, the specified person — rather than the student — may recover the amount as a debt.

So the recovery right tracks the same naming. Without it, a parent who funded the whole prepayment has no recovery right under this Division; the student holds it. Section 48(3) preserves any separate liability the provider has, apart from the Division, to pay an additional amount to the student.

How quickly must the provider pay, and who starts the clock?

Under s 47D(4), the refund must be paid within the provider obligation period of four weeks after the provider receives a written claim from the student. Note who triggers it: the written claim is the student’s, even where the payee is a named parent. The enrolled student still has to make that written claim for the four-week period to begin running.

The TPS route is on a different footing. Section 50B(1) requires the TPS Director to act as soon as practicable rather than within a fixed number of days.

What happens to the claim against the school once the TPS pays?

Section 50C(1) provides that where the TPS Director pays an amount under s 50B in relation to the student, the student and any person specified in s 50B(3)(b) cease to have any claim against the provider in respect of the student’s fees to which the Division 2 refund requirements relate. The TPS payment closes out the claim rather than sitting alongside it.

The underlying debt does not disappear. Under s 50C(2) the provider must pay the TPS Director an amount equal to what was paid out, s 50C(3) makes that recoverable by the Commonwealth as a debt due, and s 50C(4) lets the TPS Director enforce any charge or security the provider had granted the TPS Director over its assets. Where a provider is required to maintain an account under s 28, s 50C(2A) requires the reimbursement to be made out of that account to the extent it is in credit.

What does this mean for the enrolment agreement?

The provisions turn on a single question: does the s 47B agreement specify a person other than the student to receive refunds? If it does, that person is the payee under s 47D(3)(b), the claimant under s 48(2), and — where that branch applies — the TPS payee under s 50B(3)(b). If it does not, all three default to the student.

Take a family whose enrolment paperwork under s 47B names only the student: for refunds owed under s 47D, the student is the payee under s 47D(3)(a), holds the recovery right under s 48(1) rather than the parent, and — where s 50B(3)(b) is not engaged — remains the person the TPS Director must pay under s 50B(3)(c), regardless of whose money it was. This is general information about how the Act frames these questions and is not a substitute for advice on your own circumstances; because s 50B(5) allows payment requirements to be set by legislative instrument, the position should be confirmed against the requirements and guidance currently published officially. The practical consequence is that the payee is determined at enrolment, not at the point of closure, and it is determined by what the written agreement says.

Frequently Asked Questions

I paid my child’s tuition from my own account. Does the refund come back to me automatically?

No. Under s 47D(3), the provider must pay the refund to the student unless the s 47B written agreement specifies someone else to receive it. Paying the invoice does not by itself make the payer the payee.

When a school closes, does the Tuition Protection Service pay the parent or the student?

It depends on the branch in s 50B(3). If the student accepts a place in an alternative course under s 49, the TPS Director pays the new provider; if a refund was required under s 47D and the agreement names another person, that person; otherwise the student.

Can a parent take the school to court over an unpaid refund?

Only if the parent is the person specified in the s 47B agreement. Under s 48(2), that specified person — rather than the student — may recover the amount as a debt in a court of competent jurisdiction; otherwise the recovery right under s 48(1) belongs to the student.

How long does the provider have to pay the refund?

Under s 47D(4), the refund must be paid within the provider obligation period of four weeks after the provider receives a written claim from the student. The clock is started by the student’s written claim, even where the payee is a named parent.

If the replacement course costs less than the prepaid fees, who gets the difference?

Under s 50B(4), where the amount paid to the alternative-course provider exceeds the cost of that course, the TPS Director must pay the difference to the person identified in s 50B(3)(b) or (c) — the named person where there is one, and otherwise the student.

Does a TPS payment mean the family can still claim against the closed school?

No, not for those fees. Under s 50C(1), once the TPS Director pays an amount under s 50B, both the student and any person specified in s 50B(3)(b) cease to have any claim against the provider in respect of the fees covered by the Division 2 refund requirements. Under s 50C(2), the provider instead owes the TPS Director.

Can the government change how these payments are made?

Yes, in part. Under s 50B(5), the Minister may by legislative instrument specify requirements for payments made under that section, so the payment mechanics should be checked against the instrument and guidance currently published officially rather than assumed from the Act alone.

References

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