International student refunds are an important part of an educational institution’s operations, directly impacting the financial well-being of both students and the institution.
International students expect easy access to refunds, the same way consumers do for canceled services or returned goods. Then, there are questions of compliance and fraud risk. These factors are just a few of the unique challenges institutions face when processing refunds. If an educational institution mismanages refunds, it can end up with dissatisfied students, lost income, and reputational damage.
The stakes have never been higher. Global politics are affecting international education and transforming it into a dynamic landscape, making each international student more valuable to institutions. After all, international students contributed $42.9 billion to the US economy during the 2024-2025 academic year. In Australia, international students contributed to almost half of the country’s GDP in 2023.
Managing refunds the right way — ensuring a full audit trail, compliance, and fraud protection — is key to retaining and attracting international students.
Student refunds: Policy and regulation
An international student might ask for, or require, a refund for various reasons. Visa issues, withdrawal due to unforeseen circumstances, changes to course enrollments, and accidental overpayment are all common.
While students expect to be able to request a refund, not all educational institutions offer them. Policies differ among institutions, with most offering refunds on a sliding scale that ceases beyond a set date in the semester.
Moreover, educational institutions must comply with various regulations around student refunds, including consumer protection laws, international payment regulations, and tax laws. The regulatory landscape differs across regions and is constantly evolving, creating headaches for both students and institutions.
In major regions such as Canada, North America, the UK, and Australia, specific regulations govern student refunds. Some stipulate that refunds should be returned to the originating bank account, using the same channel that the payment came from.
These hyper-local processes can be difficult for international students to identify and understand during an already stressful time in their life, as they navigate a new culture, academic system, and daily life — often in a language that isn’t their native tongue.
Staying alert for refunds fraud
Fraud is an additional challenge for institutions that find themselves at risk when processing international student refunds. Fraudsters have tricked international students into directing their international tuition and fee payments to nefarious individuals and used stolen credentials or fake identities to request refunds from educational institutions.
In Australia, for example, criminals have been impersonating international students to pocket refunds for institutions and training courses, defrauding them of up to $50,000 each.
While educational institutions must implement robust fraud-prevention measures to protect against these risks, the costs can quickly add up, in terms of both resources and finances.
In addition to protecting against cybercrime and fraud, educational institutions are handling sensitive personal and financial information while processing refunds. Ensuring they comply with local laws and regulations that protect this data from unauthorized access and breaches adds an additional layer of cost and complexity.
Streamlining international student refunds
How can educational institutions manage the refund process more efficiently? By implementing a streamlined, transparent refunds process that’s aligned with your existing policies and methods for managing international payments.
Operational efficiency also comes into play here. Institutions need efficient processes and systems in place to handle refund requests promptly and accurately, easing the burden on resources while meeting student expectations.
Once an international student has submitted a refund request, the wait to receive funds can be an anxious experience. Communication around this process is key to a positive student experience. However, language barriers and cultural differences can interfere with good intentions. Institutions must ensure clear and effective communication to avoid misunderstandings and disputes.
Key steps for an efficient international student refund process
- Ensure your refund process aligns with your existing processes and policies.
- Streamline your refund operations.
- Choose a provider that can easily integrate with your institution’s existing system.
- Help protect your students from fraud.
- Protect your institution’s reputation.
- Ensure your payments provider meets regulatory and industry compliance standards.
- Work with an international payments provider you can trust.
Convera: The audit-compliant choice for student refunds
An audit trail is one of the most critical components of an effective student refunds process. It helps minimize student inquiries by implementing a channel to keep them updated about the status of their refund. It also ensures universities meet internal audit standards and have full visibility into the entire process.
Emails, automated notifications, and other communications can help, but nothing compares to the built-in automated tracking tools of a payments platform, such as Convera GlobalPay for Students. It allows students to proactively monitor the status of their refund with a unique reference number and provides universities with a full audit trail of the steps taken to ensure funds are returned to the student.
