New Rules Make Language School Licensing Easier

Under a 2020 modification to the 2013 regulations around adult education, licensing and registration of language schools in Hungary have seen some changes. Any company that wants to do business in language instruction has to register in a system called Felnőttképzési Adatszolgáltatási Rendszer, which translates as Adult Education Reporting System, or as it is often referred to: FAR. There are two registration options, registration by notification and registration by acquiring accreditation.

“The first option has less strict measures; the company only has to announce to public authorities the intention to do business in the field of language instruction,” Michal Nadzon, managing director of Berlitz Czech Republic and Berlitz Hungary, tells the Budapest Business Journal.

“The second option has stricter requirements, however. Any new language program or course needs to be accredited separately, and a quality-assurance system must be put in place, and a cash deposit must be put down,” Nadzon adds.

While both registration options are subject to a fee, the latter also requires additional fees for each newly-accredited program. Either way, administration, paperwork and data collection from students have radically increased with the introduction of these new types of registration.

The new system also comes with new requirements. “The institution needs to possess a certain amount of property security; should the school not be able to provide the announced courses students have already paid for, the school must pay students a refund against the asset security,” Benjámin Berczi, marketing and sales manager of International House Budapest, tells the BBJ.

The courses also require detailed administration, such as attendance sheets and a register, and they need to comply with reporting obligations via the reporting scheme, according to Berczi.

Registration

In the case of the first registration option, registration by notification, the only requirement is to register in the FAR system and have a trade license for language training.

“This implies paying the registration fee, as well as commitment to data collection from students and storage of that data for a certain period of time and entering data into the FAR system regularly,” adds Nadzon. Other than that, there are no formal requirements.

For the second option, registration by acquiring accreditation, the company registering “has to have a pedagogical manager, with a degree and experience defined by the law, who is employed by the company. The quality management system is also specified by the law. It is not ‘good enough’ to have an ISO certificate for example,” Nadzon explains. A quality control system and customer service function are also necessary under this option.

Beyond the requirements, however, the new system does deliver benefits to the market. “The school needs to provide teachers with proper qualifications and continuous professional development for both registered and authorized courses,” Berczi of IH Budapest says.

“Participating in these courses means there is a quality assurance for the students. A further advantage is that, in accordance with the VAT law, the school can provide courses VAT free for clients,” he adds.

The new data-collection system is similar to the one used prior to the 2020 modification, although the present system is less strict than the previous ones; course schedules, for example, need not to be reported anymore.

“Nevertheless, it is still very administratively demanding. Lots of personal data has to be collected from the students; in that respect, the current rules in Hungary seem to be going in the opposite direction than those in other EU countries,” Nadzon of Berlitz opines.

Background Check

There is still room for further improvement, he reckons. “One would expect the registration obligation would be reflected in the quality of the language school landscape. However, this is not the case because the previous background of the company is not investigated, nor professional qualities evaluated, including teaching method, materials used during the lessons and instructors’ erudition,” Nadzon warns.

As registration by notification is fairly easy, the new system has not made a major impact on the market generally.

“On the other hand, some of the private instructors might decide to stop delivering services or move to the ‘black market’ rather than fulfilling all the administrative tasks brought by this change,” Nadzon says.

“COVID-19 has had a much greater impact in terms of language school landscape in both positive (a faster move to new technologies and online instruction) and negative connotations (the demand for corporate courses has plummeted as companies need to cut costs); in the market of private instruction, the uncertainty is the biggest issue,” he adds.

In Czech Republic and Slovakia, the language school business is less bureaucratic; it is considered a service, just like any other business, according to the managing director of Berlitz, which is internationally present in 70 countries, including most of the EU and V4 countries.

The two Visegrád Four peers have no central data collection system and education ministry accreditation is only required for specific language programs, a very marginal segment of the market, which does not give the establishments much of an advantage. Most language schools operate without this accreditation.

“An important long-term trend can be seen is all V4 countries: Customers who would like to learn a new language (both B2B and B2C) look more at the quality and less at the price than some 10 to 15 years ago. They tend to value their time and wish to get faster progress and real results. They look for flexibility, options to study online and fully-customized programs,” Nadzon concludes.

NYESZE Quality Trademark

The Association of Hungarian Language Schools (NYESZE) has developed its qualification system in the past three decades to control and to improve the operation and to raise the professional standards of language schools, the association told the BBJ. Based on more than 50 aspects, the qualification requirements examine and evaluate the activities of language schools with the involvement of independent language teaching professionals, with special regard to the school’s lessons. Schools that joined the association and identified themselves with the goals of the organization can voluntarily apply to obtain the qualification. NYESZE-certified schools differentiate themselves from other institutions by wearing the “quality trademark.” The Q mark means professional recognition, reliability and high standards, so it has advertising and PR value, according to NYESZE. Out of the approximately 250 institutions operating as language schools in Hungary, 55 are members of the association and 15 are currently eligible to hold the title of “Qualified Language School”.

This article was first published in the Budapest Business Journal print issue of February 12, 2021.