When a foreign-invested vocational school is dissolved, current students are the group the law protects first: the dissolution file cannot be approved without a plan safeguarding learners’ rights. Investors therefore cannot ‘close first and work it out later’ — handling the students is a precondition of the dissolution decision, not an afterthought.
Dissolution is decided only with a learner-protection plan in place
Under Article 51 of Decree No. 86/2018/ND-CP (as amended by Decree No. 124/2024/ND-CP), authority to decide dissolution of a foreign-invested education institution lies with the level that permitted its establishment. Dissolution is considered where: the founding organisation or individual requests it; the institution seriously breaches the law or management rules; a suspension period expires without remedy; the institution’s objectives no longer fit national development needs; or dossier commitments remain unfulfilled five years after the establishment decision took effect.
The crux is the file: the dissolution request must include a dissolution plan stating the measures to safeguard the lawful rights of learners, teachers, managers and staff, together with a financial and asset settlement plan. The authority decides on that basis; a generic plan that names no receiving institution and no tuition treatment does not meet the filing requirement.
Where students go and how prepaid tuition is treated
Under the approved plan, current students have two main routes: transfer to another vocational institution with the same occupation and level to continue, with accumulated learning outcomes considered for recognition; or a refund of tuition corresponding to the untaught portion where transfer is impossible. It is the school and the investor who organise the transfer — contacting the receiving institution and handing over study records and transcripts — not the students left to fend for themselves.
On tuition, the refund duty arises from the training contract between school and learner together with the financial plan in the dissolution file: tuition for untaught periods must be refunded or offset against fees at the receiving institution by tripartite agreement. If the school is insolvent, tuition refunds are a financial obligation of the school as a legal person and the investor must settle them during asset liquidation and investment-project termination under investment and enterprise law.
Investor responsibility and the risk of abandoning learners
Beyond the education authority’s dissolution decision, the foreign investor must complete the project-exit chain: investment project liquidation, enterprise dissolution, tax finalisation and labour settlement. Within that chain, obligations toward learners carry the highest legal and political priority because they touch citizens’ right to education — authorities typically confirm dissolution as complete only when the school evidences arrangements for every learner and fulfilled financial duties toward them.
If a school shuts abruptly without dissolution procedures and abandons its students, the investor faces several liability lines at once: education administrative fines, learner lawsuits for tuition refunds and contract damages, and a violation recorded in its investment file affecting other projects in Vietnam. The correct sequence is always: build the learner plan first, file it with the dissolution request, and stop enrolment and teaching only after the plan is approved.
Frequently asked questions
If a vocational school closes, where do current students go?
Students are not left stranded. Under Article 51 of Decree 86/2018/ND-CP (as amended by Decree 124/2024/ND-CP), the dissolution file must contain a plan safeguarding learners’ rights; under the approved plan, students transfer to another vocational institution in the same occupation and level to continue (with prior results considered for recognition), or receive a refund of tuition for the untaught portion where transfer is impossible.
Are prepaid tuition fees refunded?
Yes. Tuition for the untaught portion of the programme must be refunded or offset against fees at the receiving institution by agreement, under the training contract and the financial plan in the dissolution file. This is the school’s and investor’s obligation, to be settled during dissolution and asset liquidation, whether or not students demand it.
Who is responsible for transferring students to another school?
The school and its founding investor are responsible for organising the transfer: contacting the receiving institution, handing over learners’ records and transcripts, and settling tuition, under the supervision of the authority that permitted the school’s establishment — which decides dissolution only when the learner-protection plan is clear in the file.
This article has been quality-reviewed by the FLAW AI Legal Council