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College Agents May Face Drastic Changes in China

  • Ira Mellman

The controversial business of agents who purport to help Chinese students get into U.S. colleges and universities might soon go through some drastic changes.
Reports circulating in China for a number of weeks say the Chinese education ministry is seeking opinions on possible restrictions that would let provincial authorities prevent foreign agencies from entering the market, and strengthen state supervision of domestic agents.
Tom Melcher is a private investor in Beijing who was the founder of Zinch China, a Chinese web service that provided free educational information to Chinese students looking to go overseas. He says the Chinese media has recently carried stories about how Chinese students had been tricked by unscrupulous agents. “The stories were quite sensational because it really strikes to the core of every parents fear, that they’re going to send their child overseas and they’re going to have a bad experience,” says Melcher. He says the recent discussion about regulating agents more strictly “has really been prompted by that.”
He says many of the agents, representing both Chinese and international companies, act like independent college counselors in the United States. “They give advice, you pay them a fee and that’s that,” said Melcher.
However, he says others are agents who give advice and take a fee from parents or students, but at the same time get commissions to send students schools overseas. The “really bad thing” about that, said Melcher if when the agent doesn’t tell the parent who may be paying the agent for independent advice, but in fact the agent isn’t giving independent advice, but instead giving them advice based on who is paying them a commission.
According to Melcher, the first sector the government is looking to regulate is foreign owned agents which he says represents only a “tiny fraction of the agents.” When you look at the news reports and the complaints of parents, it’s not clear that the foreign agents bear a disproportionate share of the burden,” he says. Melcher says it is not clear to him whether the proposed regulations would entail just the foreign agents, foreign owned agents or also the domestic owned agents.
The regulations are still in the proposal stage and “in China the process of going from proposal to law to something that’s actually enforced is not at all clear,” said Melcher.
If the proposals do become law, Melcher says it could leave Chinese students seeking an overseas education also seeking help that might not be available. “Just look at the numbers,” says Melcher. “In any given year, if you look at Chinese high school seniors, there are about 10 million of them every year” Of those, “about 50 thousand go to the US every year for undergraduate study and about 50 thousand go to the US every year for graduate study.” With that number of students seeking a US education, “there clearly are not enough people in China who have the expertise required” to help these students figure out where they should go to school.
As far as whether the proposals will become law, Melcher says he has no inside knowledge about the situation, but does note that “the timing of the announcement, when it came out during this political transition, when it got picked up in the press “scored some points” for the government. “Whether it turns into something and whether it gets done and whether people get affected by it, I’m pretty laid back about it.” The reason for that, says Melcher, is that the way the proposals are now drafted, it would be relatively straightforward for foreign owned agents in China to hook up with licensed Chinese agents and just continue to do business.
Melcher says this comes as more and more Chinese students are applying to study in the US. He says as it now stands, there is not enough help for the 100 thousand or so Chinese students who go to the US to study every year. He says there are not enough people in China who can help them.
As far as the timing of the proposals, Melcher says it comes during a Chinese government transition and provides positive publicity for a perception that the government is trying to do something about what many in China feel is a negative situation.