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Education Legislation Amendment (2021 Measures No. 2) Bill 2021



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BILLS DIGEST NO. 58, 2020-21 19 APRIL 2021

Education Legislation Amendment (2021 Measures No. 2) Bill 2021 Dr Hazel Ferguson Social Policy Section

Contents

Purpose of the Bill ........................................................... 2

Committee consideration ................................................ 2

Senate Standing Committee for the Selection of Bills .............................................................................. 2

Policy position of non-government parties/independents...................................................... 2

Position of major interest groups..................................... 2

Financial implications ...................................................... 2

Statement of Compatibility with Human Rights................ 2

Parliamentary Joint Committee on Human Rights ..... 3 Key issues and provisions ................................................ 3

Student loans for former permanent humanitarian visa holders ........................................... 3

Table 1: Number of humanitarian visa holders receiving HELP assistance by HELP type, 2015- 2019 ........................................................................... 4

Proposed amendments ............................................. 4

Recrediting upfront payments .................................... 5

Proposed amendments ............................................. 5

Other provisions ............................................................. 6

Grant administration ................................................... 6

Former registered providers of education for overseas students ....................................................... 8

Concluding comments ..................................................... 9

Date introduced: 18 March 2021

House: House of Representatives

Portfolio: Education, Skills and Employment

Commencement: The day after the Act receives Royal Assent, except the provisions relating to former permanent humanitarian visa holders (Schedule 1, Part 1), which commence 1 January 2022.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at April 2021.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 2

Purpose of the Bill The purpose of the Education Legislation Amendment (2021 Measures No. 2) Bill 2021 (the Bill) is to amend the Higher Education Support Act 2003 (HESA) and the Education Services for Overseas Students Act 2000 (ESOS Act) to make a number of administrative changes to:

• extend access to student loans to former permanent humanitarian visa holders

• provide for refunds of student upfront payments in certain circumstances where the provider has remitted a student loan amount

• change the administrative arrangements for certain grants and

• clarify that the ESOS Act continues to apply to formerly registered providers of education to overseas students for the purposes of resolving issues that relate to their time as registered providers.

Background information for each of these provisions is included in the key issues and provisions section of this Bills Digest.

The Bill also amends HESA to correct the mistaken inclusion of Indigenous language courses as foreign languages, and clarify that if a student’s course is restructured by a higher education provider, they can still be treated as a grandfathered student under the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Act 2020 (Job Ready Graduates Act) if they are a continuing student who was enrolled prior to 2021. These amendments are not discussed in the Digest.1

Committee consideration

Senate Standing Committee for the Selection of Bills At its meeting of 17 March 2021, the Senate Standing Committee for Selection of Bills deferred consideration of the Bill to its next meeting.2

Policy position of non-government parties/independents At the time of writing, no non-government parties/independents have commented on the specifics of the Bill.

Position of major interest groups At the time of writing, no major interest groups have commented on the specifics of the Bill.

Financial implications The Explanatory Memorandum to the Bill states that the amendments to HESA have ‘negligible financial implications’, while the amendments to the ESOS Act will have no financial impact.3

Statement of Compatibility with Human Rights As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised

1. More information about the Job-ready Graduates amendments and grandfathering arrangements is available in H Ferguson, Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020, Bills digest, 12, 2020-21, Parliamentary Library, Canberra, October 2020.

2. Senate Standing Committee for Selection of Bills, Report, 4, 2021, The Senate, Canberra, 18 March 2021, [p. 2]. 3. Explanatory Memorandum, Education Legislation Amendment (2021 Measures No. 2) Bill 2021, p. 6.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 3

or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.4

Parliamentary Joint Committee on Human Rights The Parliamentary Joint Committee on Human Rights had no comment on the Bill.5

Key issues and provisions

Student loans for former permanent humanitarian visa holders The Higher Education Loan Program (HELP) provides loans to students to defer certain study costs, with amounts paid to providers by the Australian Government on behalf of the student, and repaid through the Australian Taxation Office once a borrower’s repayment income reaches a minimum repayment threshold.6 There are four HELP sub-schemes:

• eligible students enrolled in a Commonwealth Supported Place (CSP) can defer the cost of their student contribution amount (essentially, their course fees) using HECS-HELP7

• eligible students enrolled in full fee-paying places at approved higher education providers can defer the cost of their course fees using FEE-HELP8

• eligible students can use SA-HELP to defer the cost of the student services and amenities fee (SSAF), which covers certain student services and amenities of a non-academic nature, and is capped at $313 for 20219

• eligible students enrolled in an undergraduate CSP can defer the cost of certain overseas study expenses using OS-HELP.10

Currently under HESA, all Australian citizens and resident permanent humanitarian visa holders are eligible for all sub-schemes.11 With the exception of certain New Zealand citizens, other visa holders are generally not eligible for HELP.12

The number of humanitarian visa holders receiving HELP assistance in the five years to 2019 (latest year available) is shown in Table 1 below. Humanitarian visa holders represent a small minority of HELP borrowers. In 2019, a total of 974,330 students received HELP assistance through one or more sub-schemes, with only 4,577 of these (0.5 per cent) being humanitarian visa holders.13

4. The Statement of Compatibility with Human Rights can be found at pages 7-12 of the Explanatory Memorandum to the Bill. 5. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 4, 2021, 31 March 2021, p. 6. 6. Department of Education, Skills and Employment (DESE), ‘Higher Education Loan Program (HELP)’, DESE website, last updated 1 March 2021; Australian Taxation Office (ATO), ‘Study and training loan repayment thresholds and rates’, ATO website, last

updated 30 June 2020. 7. DESE, ‘HECS-HELP’, StudyAssist website, n.d. 8. DESE, ‘FEE-HELP’, StudyAssist website, n.d. 9. DESE, ‘SA-HELP’, StudyAssist website, n.d. 10. DESE, ‘OS-HELP and overseas study’, StudyAssist website, n.d. 11. HESA, subsections 90-5(1), 104-5(1), 118-5(1) and 126-5(1). Permanent humanitarian visa holder is defined in the dictionary

in Schedule 1 as the holder of a visa that is, or has at any time been, defined as a permanent humanitarian visa for the purposes of the regulations made under the Migration Act 1958. 12. Eligibility for New Zealand citizens is limited to citizens who came to Australia as dependent children, hold a special category visa and have been residents for at least 10 years. HESA, sections 90-5, 104-5, 118-5 and 126-5. 13. Parliamentary Library estimates based on DESE, 2019 Section 5 Liability status categories, Table 5.7, 8 September 2020 and

DESE supplied data in Table 1.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 4

Table 1: Number of humanitarian visa holders receiving HELP assistance by HELP type, 2015- 2019

HECS-HELP FEE-HELP OS-HELP SA-HELP TOTAL

2015 2,995 555 24 2,666 3,594

2016 3,124 486 27 2,806 3,676

2017 3,166 492 33 2,891 3,713

2018 3,455 516 18 3,118 4,034

2019 3,962 542 19 3,562 4,577

Source: Supplied by the Department of Education, Skills and Employment (DESE), from the Higher Education Student Collection, extracted 29 March 2021.

Note: Number of persons accessing each sub-scheme does not equal the total number of students as students often access more than one sub-scheme.

Proposed amendments Items 1 to 3 of Schedule 1 of the Bill amend the HELP citizenship and residency requirements in HESA for each sub-scheme to extend HELP to eligible former permanent humanitarian visa holders.

Item 4 inserts the following definition of eligible former permanent humanitarian visa holder to the dictionary in Schedule 1 of HESA:

a person who:

(a) is not a *permanent humanitarian visa holder; and

(b) was previously a permanent humanitarian visa holder; and

(c) is the holder of a visa in a class or subclass of visas specified in a determination under subclause (1A).

Proposed subclause (1A), to be inserted at Schedule 1 of HESA by item 5 allows the Minister with responsibility for higher education to specify, by legislative instrument, a class or subclass of visas under the Migration Act 1958 or its regulations for inclusion in the definition of eligible former permanent humanitarian visa holder.

The Explanatory Memorandum to the Bill indicates that the intention is to use this provision to extend HELP to former permanent humanitarian visa holders who hold a Resident Return visa, which is required to enable them to travel outside Australia, if they have held the permanent humanitarian visa for at least five years.14

Permanent visa holders, including those granted permanent humanitarian visas, are usually granted a five-year ‘travel facility’ which allows them to travel overseas and re-enter Australia for up to five years from the time the visa was granted. After five years, this travel facility expires, and a permanent visa holder wishing to travel overseas and re-enter Australia must apply for a Resident Return visa (subclass 155 or 157).15 A Resident Return visa is a permanent visa, but is not a humanitarian visa. This means anyone who moves from a permanent humanitarian visa to a Resident Return visa loses their entitlement to HELP. The Minister’s second reading speech

14. Explanatory Memorandum, Education Legislation Amendment (2021 Measures No. 2) Bill 2021, p. 2. 15. Department of Home Affairs (DHA), ‘Overseas travel as a permanent resident’, DHA web site, last updated 24 July 2020.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 5

indicates that this provision is intended to ensure that permanent humanitarian visas holders do not lose access to HELP simply because they travel outside of Australia after the expiry of their five-year travel facility:

As a permanent humanitarian visa holder in this situation would have retained their HELP eligibility if they had not travelled outside of their travel facility, this bill ensures permanent humanitarian visa holders can still access HELP, ensuring continued access to quality tertiary education while they are Australian residents.16

The proposed application provisions at item 6 mean the extension of HELP eligibility will be from 1 January 2022, with HECS-HELP and FEE-HELP available for units (sometimes known as subjects) with a census date on or after this date, and OS-HELP and SA-HELP available for applications for assistance on or after this date.

Recrediting upfront payments Currently, HESA contains provisions to ensure that if a provider contravenes certain requirements of the Act in relation to HECS-HELP, they will be required to repay the Commonwealth assistance wrongly received as a result.

A higher education provider must re-credit a person’s HELP balance if HECS-HELP is provided on the basis of an application where the provider completed any part of the application that the person was required to complete themselves, or if the person was not entitled to receive HECS-HELP assistance for the unit.17 This discharges the student from liability to pay the student contribution for the unit, up to the re-credited amount.18 The provider must then repay the amount to the Commonwealth.19

If the student was then unable to properly complete the application and/or pay the full student contribution amount on or before the census date for the unit, the provider would be required to cancel their enrolment, and refund any upfront payment the student may have made.20 Circumstances that arise after the census date would normally be dealt under the special circumstances provisions, which allow a student who has withdrawn from a unit due to a matter beyond their control that makes it impracticable for them to complete the requirements of the unit, to apply for a refund within 12 months.21

Proposed amendments Item 7 of Schedule 1 inserts proposed sections 36-24BB and 36-24BC, which specify that if the person’s HELP balance is re-credited under the above circumstances, and the person had paid some of the student contribution amount upfront, that amount must be refunded to the student—this puts a positive obligation on the provider to refund the upfront payment, rather than relying on other processes (such as enrolment cancellation, or the student making a special circumstances application) to initiate the refund process.

The proposed sections also include requirements for the provider to repay the amount of HECS-HELP assistance received to the Commonwealth, and the existing section requiring this is repealed

16. A Tudge, ‘Second reading speech: Education Legislation Amendment (2021 Measures No. 2) Bill 2021’, House of Representatives, Debates, (proof), 18 March 2021, p. 3. 17. HESA, sections 97-45 and 97-50. Section 128-15 of HESA specifies that a person’s HELP balance is the amount they are able to borrow, up to the HELP loan limit, which is $108,232 for most students in 2021. Taking out a loan reduces the HELP balance,

while making a repayment increases the balance up to the loan limit. See DESE, ‘Combined HELP loan limit’, StudyAssist website, n.d. 18. HESA, section 96-10. 19. HESA, section 96-5. 20. HESA, section 36-40 and subsection 169-15(3). 21. HESA, sections 36-20, 36-21 and 36-22.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 6

at item 8. The significance of this change is to move the obligation into Division 36, which sets out the conditions of receiving Commonwealth Grant Scheme grants, the main source of Australian Government funding for higher education providers—breaching these conditions can result in bodies having a grant reduced, or being required to repay a grant, under Part 2-5.

The repayment requirements will not automatically apply in the case of replacement units, or provider default (that is, failing to provide a unit as promised), but these circumstances may be dealt with in the Higher Education Provider Guidelines.22

The application provisions at item 12 mean the new refund requirements will only apply to units with a census date on or after 1 January 2021. The Explanatory Memorandum to the Bill suggests that this retrospectivity is justified in order to avoid financially disadvantaging students, but also argues that it will have no practical effect due to the existing refund arrangements.23

Other provisions

Grant administration Parts 3 and 4 of Schedule 1 of the Bill include changes to the administration of certain grants provided to higher education providers under HESA.

Part 3 of the Bill amends the ‘other grants’ provisions in Part 2-3 of HESA. The ‘other grants’ provisions cover a range of purposes set out in section 41-10, including equality of opportunity, capital development projects, and activities that assure and enhance the quality of the sector.

Key programs funded using these provisions currently include:

• the Indigenous, Regional and Low SES Attainment Fund (IRLSAF), which was announced in 2020 as part of the Job-ready Graduates Package.24 The IRLSAF combines equity funding from a range of existing programs, including the Higher Education Participation and Partnerships Program (HEPPP) as well as the enabling loading and regional loading, which previously formed part of the funding provided for learning and teaching under the Commonwealth Grant Scheme25

• the National Priorities and Industry Linkage Fund, also announced as part of the Job-ready Graduates Package, which from 2021 will provide grants to universities to invest in more innovative approaches to industry engagement, with the aim of improving graduate employability26

• Regional University Centres, which provide facilities such as computers and study spaces, and support such as study advice and academic support services, to assist students studying at a distance from their provider27

• the Higher Education Disability Support Program, which funds institutions to undertake activities that assist in removing barriers to access for students with disability, and maintain the

22. Replacement unit is defined in HESA in Schedule 1 as a unit of study that replaces an affected unit of a course that a provider has defaulted in relation to. 23. Explanatory Memorandum, Education Legislation Amendment (2021 Measures No. 2) Bill 2021, pp. 17-18. 24. DESE, Job-ready Graduates: higher education reform package 2020, Discussion paper, DESE, Canberra, [19 June 2020], last

updated 9 November 2020. 25. DESE, ‘More opportunities for regional Australia’, DESE website, last updated 4 December 2020; Other Grants Guidelines (Education) Amendment (No. 3) 2020, Part 3. 26. DESE, Job-ready Graduates: higher education reform package 2020, op. cit.; DESE, ‘Consultation on National Priorities and

Industry Linkage Fund (NPILF)’, DESE website, last updated 16 March 2021; Other Grants Guidelines (Education) Amendment (No. 3) 2020, section 8.15. 27. DESE, ‘Regional University Centres’, DESE website, last updated 24 November 2020.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 7

Australian Disability Clearinghouse on Education and Training, currently hosted by the University of Tasmania.28

Currently, section 41-25 allows for the conditions for such a grant to either be determined by the Minister on an individual basis, or specified in the Other Grants Guidelines, but not both.29 Item 13 repeals section 41-25 and replaces it with proposed section 41-25, which would allow for both options to be used in combination.

A minor adjustment is also made to the provisions for rollover of grant amounts in subsection 41-40(1). Currently, this subsection allows unspent amounts to be rolled over into the following year if the Secretary (currently of the Department of Education, Skills and Employment) so determines. Item 14 repeals the subsection and replaces it with proposed subsection 41-40(1), which allows for unspent amounts to be rolled over by default, unless the Secretary determines otherwise under proposed subsection 41-40(5).

Item 18 proposes to repeal section 41-50, which currently requires the Minister to provide, by legislative instrument by the start of each year, a list of the maximum amounts of all grants which may be paid under the ‘other grants’ provisions in the following year (although this can be varied at any time before the end of the year).

The Explanatory Memorandum to the Bill states that ‘this instrument is no longer required’, citing the similarity of the instrument required under subsection 41-45(1B).30 Subsection 41-45(1B) requires that the Minister must, by legislative instrument, determine the total payments made under Part 2-3 each year. The key difference between these provisions is that, while subsection 41-45(1B) requires only a total funding amount, section 41-50 requires an amount to be specified for each grant purpose. Despite this, recent interpretations of this provision have arguably undermined this intent. The 2019 and 2020 instruments provide a table which includes, for each purpose in section 41-10, that the maximum grant will be the ‘total amount determined under s 41-45 of the Act’.31 In contrast, earlier examples provide dollar figures where the intent is to make a grant for the specified purpose.32

Part 4 deals with the Commonwealth scholarships provisions in Part 2-4. The scholarships provisions are currently used to fund the Research Training Program (RTP), which provides fee offsets and stipends for both domestic and overseas students undertaking postgraduate research courses (masters by research and doctorate by research).33 Grants are made to providers on the basis of research income and postgraduate research student completions.34 Providers are responsible for program administration, such as the selection of students and determinations about whether a stipend is to be provided.35

Currently, provisions in subsection 46-35(1) for rolling over Commonwealth scholarship grant amounts are in the same terms as those for the other grants. That is, they allow the Secretary to determine that an unspent amount be rolled over into the next year. Item 20 repeals the

28. DESE, ‘Higher Education Disability Support Program’, DESE website, last updated 26 November 2020; Other Grants Guidelines (Education) 2012, Part 4. 29. The Other Grants Guidelines are currently the Other Grants Guidelines (Education) 2012 and Other Grants Guidelines (Research) 2017. 30. Explanatory Memorandum, Education Legislation Amendment (2021 Measures No. 2) Bill 2021, p. 8. 31. List of Maximum Grant Amounts under Division 41 for 2019; List of Maximum Grant Amounts under Division 41 for 2020. 32. List of Maximum Grant Amounts under Division 41 for 2018; List of Maximum Grant Amounts under Division 41 for 2017; List

of Maximum Grant Amounts under Division 41 for 2016 (Education); List of grants under Division 41 for 2015. 33. Commonwealth Scholarships Guidelines (Research) 2017. Only 10 per cent of RTP funding may be spent on overseas students. 34. DESE, Calculating Research Training Program, DESE, last modified 10 March 2021, p. 3. 35. DESE, ‘Research Training Program’, DESE website, last updated 14 December 2020. Administration must be in accordance with

conditions set out in the Commonwealth Scholarships Guidelines (Research) 2017.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 8

subsection. Proposed subsection 46-35(1) parallels the change to the ‘other grants’ provisions. It would allow unspent amounts to be rolled over by default, unless the Secretary determines otherwise under proposed subsection 46-35(4).

The application and transitional provisions at items 19 and 23 apply the changes to all grants from the day after the Act receives Royal Assent. For grants made before this time, conditions will be treated as imposed under section 41-25 as amended—this means that any current grant with conditions set out in the Other Grants Guidelines where the Minister has also specified conditions on an individual basis will be subject to both sets of conditions. This appears intended to clarify the legal status of some grants, which, according to the Explanatory Memorandum to the Bill, do currently have conditions specified using both mechanisms.36

Former registered providers of education for overseas students Schedule 2 of the Bill deals with arrangements for formerly registered providers under the ESOS Act.

Currently, under section 6E, the ESOS Act generally applies to current and prospective providers of courses to overseas students, including those in the higher education, vocational education and training (VET), schools, and English Language sectors.

One of the main protections for overseas students under the ESOS Act is the Tuition Protection Service (TPS), which assists students whose education provider is unable to deliver their course as planned (that is, when a provider ‘defaults’).37 The service ensures that eligible students either continue their studies with a different provider, or have the unused portion of the tuition fee reimbursed—the provider is ultimately responsible for this cost.38

To this end, sections 28 and 29 of the ESOS Act require that registered providers receiving tuition fees from overseas students prior to the commencement of a course maintain an account credited with those fees.39 Withdrawals from the account can be made to cover the provider’s obligations in case of provider default, or if the student defaults, for example if their visa application is refused.40

To clarify the responsibilities of former providers, item 1 inserts proposed section 7AB, which provides that the ESOS Act as a whole continues to apply to a person or entity that was a registered provider for the purposes of dealing with or resolving matters that arise or relate to the period of their registration. Proposed subsection 7AB(2) explicitly includes issues related to tuition fees or other money in these continuing responsibilities, but not to the exclusion of other matters. Item 6 also inserts a note after subsection 28(1) specifying that the obligation to maintain the account may continue to apply to a person or entity that ceases to be a registered provider until matters relating to the tuition fees in the account are dealt with or resolved. The intention of

36. Explanatory Memorandum, Education Legislation Amendment (2021 Measures No. 2) Bill 2021, p. 19. This may resolve some of the legal uncertainty surrounding the inclusion of ‘other grants’ funding in the higher education providers’ funding agreements for the first time in 2021, as discussed in A Norton, ‘University-Commonwealth funding agreements and the rule of law in higher education’, Higher Education Commentary from Carlton, blog, 17 March 2021. See for comparison DESE, ‘Higher education providers' 2021-2023 funding agreements’, DESE website, n.d. and DESE, ‘Higher education providers’ 2018-2020 Commonwealth Grant Scheme funding agreements’, DESE website, n.d.

37. Education Services for Overseas Students Act 2000, Part 5. Similar protections also apply to most domestic students under HESA and the VET Student Loans Act 2016 (VSL Act), the only exception being fee-paying vocational education and training students.

38. Tuition Protection Service (TPS), ‘Tuition Protection Service - International’, TPS website, n.d. 39. Certain providers are exempt under section 31. Section 32 provides that is a strict liability offence to contravene the requirements in sections 28 or 29. 40. ESOS Act, sections 46D, 47D or 47E. These sections explicitly include former providers.

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Education Legislation Amendment (2021 Measures No. 2) Bill 2021 9

these changes is to remove avenues for providers to extinguish their obligations to students by ending their registration under the ESOS Act.41

Concluding comments The Bill proposes a number of unrelated and largely administrative changes to HESA and the ESOS Act, which are broadly consistent with current policy. The extension of HELP to former permanent humanitarian visa holders, and the inclusion of upfront payments in the HELP recrediting provisions are the most significant changes in the Bill. The proposed repeal of the requirement for the Minister to specify, by legislative instrument, the planned spending on each of the ‘other grants’ each year may also warrant consideration, as this change would formalise the limited use of this instrument in recent years, in favour of an instrument which provides only a total figure.

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41. Explanatory Memorandum, Education Legislation Amendment (2021 Measures No. 2) Bill 2021, p. 9.