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Tertiary education providers - more regulation for some and less regulation for others
Tertiary education providers—more regulation for some and
less regulation for others
Posted 14/12/2015 by James Griffiths
In the last sitting week of Parliament for the year, the Government changed regulatory
requirements for tertiary education providers with the passage of the Education Services for
Overseas Services (Streamlining Regulation) Bill 2015, and the Higher Education Support
Amendment (VET FEE-HELP Reform) Bill 2015. It is timely to take stock of Australia’s
fragmented approach to the regulation of the tertiary education sector.
The tertiary education sector has a multitude of regulatory bodies and frameworks:
ï· for higher education (university) providers, the regulator is the Tertiary Education Quality
and Standards Agency (TEQSA). As most universities (save the Australian National
University) are also established under state and territory legislation, there are also state
and territory reporting requirements in addition to those imposed by the Australian
ï· most vocational education and training (VET) providers are regulated by the Australian
Skills Quality Agency (ASQA). However, not all states referred their regulatory powers to
the Commonwealth—domestic VET providers in Victoria and Western Australia are still
monitored by state-based regulators.
ï· for those providers that have international student enrolments, there is an additional
regulatory framework, known as the ESOS framework. This places additional
requirements to those instituted by ASQA or TEQSA on these providers.
And a range of funding sources:
ï· The Higher Education Loan Program (HELP) for student loans is governed by the Higher
Education Support Act 2003 (HESA), which also covers most other higher education
ï· Most funding for the VET sector is provided by state and territory governments, although
the Australian Government also provides additional funding and runs its own
The resulting complexity means that, on a practical level, both students and providers are
likely to face an array of different requirements. Consider the following examples.
Funding and payment
A private VET provider enrols a variety of domestic and international students. The domestic
VET student might be partly subsidised by the state or territory government to attract
students into qualifications leading to professions where there are identified skills
shortages, such as early childhood education or aged care. The international student will not
attract the subsidy.
The ESOS framework includes rules on what fees providers can charge international students
and protection in cases of default. The recent amendments removed a restriction on
international students paying more than 50% of their fee up-front; now they can choose to
do so. This was seen as a reduction in ‘red tape’.
Domestic students who undertake a Diploma-level qualification qualify for a VET FEE-HELP
(VFH) loan. Under changes due to take effect from 1 January 2016, each long-term course
has to be divided up into four ‘study periods’ and, as a result, a VFH student can only be
charged 25% of the loan debt per study period. In contrast, domestic students who do not
take up a VFH loan have to pay their course fees up-front in full.
These payment arrangements mean that one VET provider may have to implement three
different payment systems, and keep track of multiple funding sources, depending on their
student intake. This may also increase staff training requirements and general
The use of provider and student standards
Beyond the differences in who gets to pay when and how, other recent changes also affect
the relationship between VET providers and the Australian Government. The VET FEE-HELP
Reform Bill 2015, as amended by the Government in the Senate, included the following extra
ï· minimum standards for student entry into VFH courses
ï· minimum trading histories for VET providers who wish to offer VFH and
ï· powers for the Minister for Education and Training to audit the performance of a VET
provider who offers VFH loans to its students.
As these changes will be implemented through amendments to HESA, rather than through
changes to the national VET regulator, ASQA, they only apply to providers offering VFH
loans. To avoid meeting these increased standards, a VET provider simply has to stop
offering this type of loan. The new requirements also add to the compliance burden for
providers. The Department of Education and Training will be asking for certain types of
information as a requirement under VFH, and ASQA officials will continue to separately
engage with the provider about its obligations to them.
The tertiary education sector is diverse. A single VET provider could be offering some VFH-supported courses amongst many other VET qualifications. VFH students will have to pass
minimum entry standards while non-VFH students will not, even if both are taking the same
classes towards the same qualification. Further, a dual-sector university (one that offers
higher education as well as VET) would report separately to ASQA, TESQA, the federal
Department of Education and Training, and state and territory authorities, and may offer
various types of student loans, all with different conditions.
These two recent Bills, including the Senate amendments, increase the fragmentation of the
tertiary education sector. The lack of a single, navigable system makes it difficult for tertiary
education providers to offer the most efficient service and for students choose the most
ï· higher education
ï· vocational education and training
ï· tertiary education