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Education Legislation Amendment (2020 Measures No. 1) Bill 2020

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2019-2020

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

 

Education LEGISLATION AMENDMENT (2020 MEASURES NO. 1) Bill 2020

 

 

 

 

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Education,

the Honourable Dan Tehan MP)



Education LEGISLATION AMENDMENT (2020 MEASURES NO. 1) Bill 2020

 

OUTLINE

 

The purpose of the Education Legislation Amendment (2020 Measures No. 1) Bill 2020 (the Bill) is primarily to amend the Higher Education Support Act 2003 (HESA) to implement a range of measures across the higher education sector. HESA is the main piece of legislation governing Commonwealth funding of higher education in Australia. HESA facilitates the provision of Commonwealth financial support to higher education providers through Government subsidies, and provides loans to higher education students to cover their tuition and other fees.

 

The Bill also includes some measures relating to the VET student loans (VSL) program, which provides income contingent loans for approved vocational education and training (VET) courses and is administered under the VET Student Loans Act 2016 (VSL Act).

 

Schedule 1 of the Bill gives effect to the Australian Government’s 2019-20 Budget measure to extend the unique student identifier (USI) regime to all higher education students by requiring students commencing from 1 January 2021, and all students from 1 January 2023, to have a USI in order to be eligible for Commonwealth assistance under HESA.

 

Schedule 1 of the Bill also amends the VSL Act to require that , from 1 January 2021, a student’s application for VSL must include the student’s USI. This is consistent with the position that, from 2021, all new domestic higher education students must have been assigned a USI (unless an exemption applies), and with the current VSL application requirements, which require an application to include the student’s USI if one has been assigned.

 

Schedule 2 of the Bill gives the Secretary of the Department of Education, Skills and Employment (Department) the power to determine certain students who, due to having more than one Commonwealth Higher Education Student Support Number (CHESSN), have exceeded the HELP loan limit, and allow these students to repay the resulting excess debt amounts through the taxation system.

 

Schedule 3 of the Bill amends section 128-15 of HESA to clarify that a student’s HELP balance is taken to be reduced immediately after the census date for

HECS-HELP assistance, FEE-HELP assistance and VET FEE-HELP assistance, and immediately after the census day for VSL
. The purpose of this amendment is to ensure consistency across HELP and VSL by deeming the point in time at which a student’s HELP balance is reduced to be the census date or day.

 

Schedule 4 of the Bill amends section 137-10 of HESA to implement the loan fee exemption measure from the Government’s Higher Education Relief Package in response to the COVID-19 pandemic. This measure provides undergraduate students seeking FEE-HELP loans with an exemption from the requirement to pay the 25% loan fee for units of study with census dates from 1 April to 30 September 2020, thereby reducing the financial burden on these students during that period. Many students seeking to undertake study in the current climate may defer any decision to enter into a loan, thus reducing enrolment numbers and potentially having a negative financial impact on higher education providers. Providing an exemption from the loan fee may provide an incentive for these students to continue or commence semester two study, despite the financial effects of COVID-19.

 

Schedule 5 of the Bill includes the following minor and technical amendments to HESA:

 

·          Part 1 amends section 128-20 to include an ‘approved course’ (as defined in the VSL Act) in the definition of ‘course of study in aviation’ - this makes a technical correction and ensures that the higher HELP loan limit is available to students enrolled in VET, as well as higher education, aviation courses that enable graduates to obtain commercial flying qualifications; and

·          Part 2:

o    amends the table in subsection 16-15(1) to change the name of a university to ensure consistency with state legislation and university branding , and

o     makes a minor technical amendment to subsection 166-20(5) to replace the words ‘an approved course provider’ (not defined in HESA) with ‘a higher education provider’ (defined in HESA).

 



FINANCIAL IMPACT STATEMENT

 

 

 

This Bill implements a measure from the Government’s Higher Education Relief Package in response to the COVID-19 pandemic, as well as a higher education measure from the 2019-20 Federal Budget.

 

The measure in Schedule 4 to the Bill ( loan fee exemption for undergraduate

FEE-HELP students for six months) will have a negative
impact of $ 53 million in fiscal balance terms over the period from 2019-20 to 2023-24.

 

The remaining measures in the Bill do not have financial implications.

 

 

 



STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

 

 

Prepared in accordance with Part 3 of the Human Rights

(Parliamentary Scrutiny) Act 2011

 

Education LEGISLATION AMENDMENT (2020 MEASURES NO. 1) Bill 2020

 

The Education Legislation Amendment (2020 Measures No. 1) Bill 2020 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

 

Overview of the Bill

 

The purpose of the Bill is primarily to amend the Higher Education Support Act 2003 (HESA) to implement a range of measures across the higher education sector. HESA is the main piece of legislation governing Commonwealth funding of higher education in Australia. HESA provides for the Commonwealth to give financial support to higher education providers through government subsidies and loans to higher education students to cover their tuition and other fees.

 

The Bill also includes some measures relating to the VET student loans (VSL) program, which provides income contingent loans for approved vocation education and training (VET) courses and is administered under the VET Student Loans Act 2016 (VSL Act).

 

The measures in the bill include amendments to HESA to :

 

·          give effect to the Australian Government’s 2019-20 Budget measure to extend the unique student identifier (USI) regime to all higher education students by requiring students commencing from 1 January 2021, and all students from 1 January 2023, to have a USI in order to be eligible for Commonwealth assistance under HESA ;

·          clarify that a student’s HELP balance is taken to be reduced immediately after the census date for HECS-HELP assistance, FEE-HELP assistance and VET FEE-HELP assistance, and immediately after the census day for VSL - to ensure consistency across HELP and VSL by deeming the point in time at which a student’s HELP balance is reduced to be the census date or day ;

·          provides undergraduate students seeking FEE-HELP loans with an exemption from the requirement to pay the 25% loan fee for units of study with census dates from 1 April to 30 September 2020;

·          include an ‘approved course’ (as defined in the VSL Act) in the definition of ‘course of study in aviation’ to make a technical correction and ensure that the higher HELP loan limit is available to students enrolled in VET, as well as higher education, aviation courses that enable graduates to obtain commercial flying qualifications;

·          change the name of a university to ensure consistency with state legislation and university branding; and

·          make a minor technical amendment to subsection 166-20(5) to replace the words ‘an approved course provider’ (not defined in HESA) with ‘a higher education provider’ (defined in HESA) .

 

Schedule 1 of the Bill also amends the VSL Act to require that , from 1 January 2021, a student’s application for VSL must include the student’s USI. This is consistent with the position that, from 2021, all new domestic higher education students must have been assigned a USI (unless an exemption applies), and with the current VSL application requirements, which require an application to include the student’s USI if one has been assigned .

 

Schedule 2 of the Bill also gives the Secretary of the Department of Education, Skills and Employment (Department) the power to determine certain students who, due to having more than one Commonwealth Higher Education Student Support Number (CHESSN), have exceeded the HELP loan limit, and allow these students to repay the resulting excess debt amounts through the taxation system.

 

Analysis of human rights implications

 

The Bill engages the following human rights:

·       the right to work - Article 6 of the International Covenant on Economic, Social and Cultural Rights ( ICESCR ); and

·       the right to education - Article 13 of the ICESCR.

 

ICESCR Article 6 - Right to work

 

Article 6(1) of the ICESCR recognises the right to work, which includes the right of everyone to the opportunity to gain their living by work which they freely choose or accept. Article 6(2) provides that the steps to be taken by State Parties to the ICESCR to achieve the full realisation of this right include providing technical and vocational education programs to facilitate access to employment.

 

The right to work is engaged by virtue of an objective of the Bill, which is to ensure loans to students are provided for higher education that meets workplace needs and improves employment outcomes.

 

Schedule 4 to the Bill, in particular, promotes the right to work through temporarily removing loan fees for undergraduate students accessing FEE-HELP loans by reducing the financial burden on students accessing higher education through the HELP scheme. This enables students to continue their higher education studies that will lead to improved employment outcomes. It also supports workers eligible for FEE-HELP who are displaced by the COVID-19 crisis, by reducing their financial burden in accessing Commonwealth assistance for higher education studies to upskill or retrain , and in turn, improve their opportunities to work.   

 

This Bill is compatible with the right to work.

 

 

 

 

ICESCR Article 13 - Right to education

 

The Bill engages the right to education under Article 13 of the ICESCR, which recognises the important personal, societal, economic and intellectual benefits of education. Article 13(2)(c) provides that ‘higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education’.

 

Schedule 4 promotes the right to education by temporarily removing loan fees for undergraduate students accessing FEE-HELP loans. This reduces the financial burden on undergraduate students accessing FEE-HELP, in turn ensuring that students continue to have the highest level of choice and control over their education options.

 

The measures in Schedule 5 of the Bill also support the right to education by making minor technical amendments to HESA to ensure that Act continues to operate efficiently and effectively in facilitating student’s access to higher education. For example, updating terminology to ensure consistency with the Government’s policy intention and to ensure that correct terminology is used.  

 

Schedule 1 of the Bill amends HESA to require students to have a USI in order to receive Commonwealth assistance. There are currently two Government-issued student identifiers in the tertiary education sector: the USI which was recently extended to higher education students through the passage of the Student Identifiers Amendment (Higher Education) Act 2020 and the CHESSN. The Government intends to provide a single student identifier that will record a student’s entire tertiary education journey by de-commissioning the CHESSN. The amendments in Schedule 1 enable the next step in this process by ensuring that students are required to have a USI from 1 January 2021 for new students and from 1 January 2023 for all students.

 

This Schedule of the Bill may limit the right to education by requiring all students to have a USI before they can access Commonwealth assistance. However, there are limited barriers impeding a student from obtaining a USI and, in turn, accessing Commonwealth assistance, as the process for applying for a USI is simple, and there is no associated cost for applicants. Existing higher education students will also have ample time between the commencement of the Bill and 1 January 2023 to ensure that they have applied for, and obtained, a USI. VSL students are already required to include their USI in their loan application, if one has been assigned - so the amendments to the VSL Act should only have a minimal impact on existing VSL students. Further, when necessary, higher education providers, Tertiary Admission Centres and the Department may also assist a student by applying for a USI on behalf of the student (with consent from the student).

 

It should also be noted that the amendments in Schedule 1 also support the right to education by strengthening the integrity and richness of data available to Government (as the USI can be used to track a student’s entire tertiary education journey). A more robust evidence base will help inform future policy development and program delivery, and in doing so, further improve the effectiveness and efficiency of the Government’s investment in tertiary education. The collection, use and disclosure of USIs is governed by the existing provisions set out in Division 5 of Part 2 of the Student Identifiers Act 2014 . The amendments in Schedule 1 do not have any effect on these provisions. 

 

To the extent the Bill limits the right to education, these limits are justifiable as they are reasonable, necessary and proportionate to achieving the legitimate objectives of the measures in Schedule 1.

 

The Bill is compatible with the right to education.

 

Conclusion

 

The Bill is compatible with human rights because it advances the protection

of human rights in the delivery of higher education in Australia. To the extent that it may limit human rights, these limitations are reasonable, necessary and proportionate.

 



Education LEGISLATION AMENDMENT (2020 MEASURES NO. 1) Bill 2020

 

 

NOTES ON CLAUSES

 

Clause 1 - Short title

 

This clause provides for the Act to be cited as the Education Legislation Amendment (2020 Measures No. 1) Act 2020.

 

Clause 2 - Commencement

 

The table in subclause 2(1) sets out when the Act’s provisions will commence. The table provides that:

·          Sections 1 to 3 of the Bill and anything in the Bill not elsewhere covered by the table in subclause 2(1) commence on the day the Act receives the Royal Assent;

·          Schedule 1 (Student Identifiers) commences on 1 January 2021;

·          Schedules 2 (Validation of certain loans and payments), 3 (HELP balances) and 4 (Student loan fee exemption) commence on the day the Act receives the Royal Assent;

·          Part 1 of Schedule 5 (Other amendments) commences immediately after the commencement of Schedule 1 to the Education Legislation Amendment (2019 Measures No. 1) Act 2019 (being 1 January 2020); and

·          Part 2 of Schedule 5 (Other amendments) commences on the day the Act receives the Royal Assent.

 

Subclause 2(2) provides that information in column 3 of the table at subclause 2(1) is not part of the Act and information may be inserted into column 3 or information in it may be edited in any published version of the Act.

 

Clause 3 - Schedules

 

This clause provides that any legislation that is specified in a schedule is amended or repealed as set out in the applicable items in the schedule and that any other item in a schedule has effect according to its terms.

 

 

 

List of abbreviations

 

Act                              Education Legislation Amendment (2020 Measures No. 1) Act 2020

Bill                              Education Legislation Amendment (2020 Measures No. 1) Bill 2020

CHESSN                   Commonwealth Higher Education Student Support Number

Department               Department of Education, Skills and Employment

HELP                         Higher Education Loan Program

HESA                         Higher Education Support Act 2003

Secretary                   Secretary of the Department

USI                             unique student identifier

VET                            vocational education and training

VSL                            VET student loans

VSL Act                      VET Student Loans Act 2016

 

 

 

 

 

 

 

 

 

 



 

Schedule 1   Student identifiers

 

Summary

 

Schedule 1 of the Bill gives effect to the Australian Government’s 2019-20 Budget measure to extend the USI regime to all higher education students by requiring students commencing from 1 January 2021, and all students from 1 January 2023, to have a USI in order to be eligible for Commonwealth assistance under HESA.

 

The Student Identifiers Amendment (Higher Education) Act 2020 received Royal Assent on 6 March 2020. This Act extended the Student Identifiers Act 2014 to apply to higher education students, to enable the Student Identifiers Registrar to assign a USI to all higher education students.

 

Starting in 2021, new domestic and onshore overseas higher education students can apply for a USI. From 1 January 2023, registered higher education providers must not confer a regulated higher education award on an individual unless the individual has been assigned a USI or an exemption applies.

 

Schedule 1 of the Bill also amends the VSL Act to require that , from 1 January 2021, a student’s application for VSL must include the student’s USI. This is consistent with the position that, from 2021, all new domestic higher education students must have been assigned a USI (unless an exemption applies), and with the current VSL application requirements, which require a USI if one has been assigned.

 

Detailed explanation

 

Higher Education Support Act 2003

 

Item 1 - At the end of subsection 36-10(1)

 

Item 1 adds a new paragraph (f) at the end of subsection 36-10(1) which provides that a higher education provider must not advise a person that he or she is a Commonwealth supported student in relation to a unit of study unless:

·          if the census date for the unit is on or after 1 January 2021 and before 1 January 2023 and the person commenced the course of study on or after 1 January 2021; or

·          if the census date for the unit is on or after 1 January 2023;

the person has a student identifier immediately before the census date.

 

This means that a student that does not have a USI on or after 1 January 2021 for new students, or on or after 1 January 2023 for all students, will not be entitled to Commonwealth support under Division 36 of HESA or HECS-HELP assistance under section 90-1 of HESA (noting that, in order to be eligible for HECS-HELP assistance, a student must be a Commonwealth supported student).

 

A Commonwealth supported place is a place at a higher education provider where the government pays part of a student’s tuition fees - this is a subsidy, not a loan, and students do not have to pay this amount back to the Commonwealth. The subsidy does not cover the entire cost of a student’s tuition fees. Students must pay the rest, called the 'student contribution amount'. HECS-HELP loans can be used by eligible students to pay their student contribution amounts.

 

Item 2 - After paragraph 104-1(1)(g)

 

Item 2 adds a new paragraph (ga) in subsection 104-1(1) which provides that, subject to section 104-1 and sections 104-1A, 104-2, 104-3 and 104-4, a student is entitled to FEE-HELP assistance for a unit of study if:

·          if subparagraph 104-1(f)(i) applies, the census date for the unit is on or after 1 January 2021 and before 1 January 2023 and the student commenced the course of study on or after 1 January 2021; or

·          if subparagraph 104-1(f)(i), (ii) or (iii) applies and the census date for the unit is on or after 1 January 2023;

the student has a student identifier immediately before the census date.

 

This means that, if a student commences in a course of study on or after 1 January 2021, and before 1 January 2023, and does not have a USI on or after 1 January 2021, the student will not be entitled to FEE-HELP assistance.

 

Similarly, if a student commences a unit of study on or after 1 January 2023, and they were enrolled in the course of study prior to 1 January 2021, or if the unit is a unit access to which was provided by Open Universities Australia or is part of a bridging course for overseas-trained professionals, and the student does not have a USI on or after 1 January 2023, the student will not be entitled to FEE-HELP assistance.

 

FEE-HELP loans can be used by eligible students to pay part, or all, of their tuition fees when they apply to study at a higher education provider. A student is not eligible to apply for a FEE-HELP loan if the student is a Commonwealth supported student.

 

Item 3 - After paragraph 118-1(1)(ha)

 

Item 3 adds new paragraph (hb) in subsection 118-1(1) which provides that a student is entitled to OS-HELP assistance in relation to a period of 6 months if the student made the application for OS-HELP assistance on or after 1 January 2021 and the student has a student identifier immediately before the student made the application.

 

This means that a student that does not have a USI on or after 1 January 2021 will not be entitled to OS-HELP assistance.

 

OS-HELP is a loan for students enrolled in a Commonwealth supported place who want to study some of their course overseas. OS-HELP can be used to pay for airfares, accommodation or other travel costs. A student will not be eligible for

OS-HELP if the student is enrolled at, or their qualification will be awarded by, an overseas university or higher education provider. 

 

 

 

Item 4 - At the end of subsection 126-1(1)

 

Item 4 adds new paragraph (e) at the end of subsection 126-1(1) which provides that a student is entitled to SA-HELP assistance for a student services and amenities fee imposed on the student for a period by a higher education provider if the day on which the fee is payable is on or after 1 January 2023 and the student has a student identifier immediately before the day on which the fee is payable.

 

This means that a student that does not have a USI on or after 1 January 2023 will not be entitled to SA-HELP assistance.

 

SA-HELP is a loan that helps students pay for all or part of the student services and amenities fee charged by their higher education provider.

 

Item 5 - Subclause 1(1) of Schedule 1

 

Item 5 inserts a definition of ‘student identifier’ into Schedule 1 of HESA.

 

VET Student Loans Act 2016

 

Item 6 - Paragraph 17(1)(b)

 

Item 6 amends paragraph 17(1)(b) to delete the words ‘if any.’ Section 17 of the VSL Act sets out the requirement for applications for VSL. Currently, if a student has a USI, the USI must be included in an application for a VET student loan.

 

Item 7 - Application—requirement to provide student identifier

 

Item 7 provides that the amendment to paragraph 17(1)(b) of the VSL Act made by item 6 applies in relation to applications for VSL made on or after the commencement of item 7 (that is, 1 January 2021).

 

The combined effect of items 6 and 7 is that all applications for VSL made on or after 1 January 2021 must include the student’s USI.



 

Schedule 2   Validation of certain loans and payments

 

Summary

 

Schedule 2 gives the Secretary of the Department the power to determine certain students who, due to having more than one CHESSN, have exceeded the HELP loan limit, and allow these students to repay the resulting excess debt amounts through the taxation system.

 

Detailed explanation

 

Item 1 - Loans and payments relating to FEE-HELP assistance and VET FEE-HELP assistance

 

Sub-item 1(1) provides that item 1 of Schedule 2 applies if:

a)     a payment was made by the Commonwealth to a higher education provider or a VET provider; and

b)     the payment was purportedly on account of an amount (the ‘excess amount’) of FEE-HELP or VET FEE-HELP assistance for a unit of study or a VET unit of study; and

c)     the payment was purportedly paid under HESA to discharge the liability of a student (a ‘relevant student’) to pay the student’s tuition fee for the unit of study or the VET unit of study with the provider; and

d)     the relevant student was not entitled to the excess amount because the amount exceeded the relevant student’s HELP balance; and

e)     the census date for the unit occurred during the period:

                      i.         starting on 1 January 2005; and

                    ii.         ending on 31 December 2019.

 

Imperfect automated data matching has led to a small number of students with more than one CHESSN who have subsequently exceeded their HELP loan limit. When the CHESSNs of these students are merged, any HELP debt amounts over the student’s relevant HELP loan limit will be invalidated. Affected providers would need to repay the affected tuition fees to the Department, and providers could then pursue individual students for the relevant debt which, in some circumstances, will be thousands of dollars. The purpose of item 1 is to validate payments that were invalidly made to providers, as described in sub-item 1(1) and allow students to repay their resulting excess debt amounts through the taxation system. This will avoid an unfavourable financial outcome for both providers and students.

 

Sub-item 1(2) provides that, to the extent that it has not already been repaid to the Commonwealth before the commencement of this item, any payment made to a provider as described under sub-item 1(1) is a debt due to the Commonwealth and may be recovered by the Commonwealth in a court of competent jurisdiction.

 

The purpose of sub-item 1(2) is to confirm that providers that have been paid amounts as described in sub-item 1(1) (i.e. with respect to students who were not entitled to HELP assistance in relation to the payment amount) owe a debt to the Commonwealth in relation to this amount. This is a debt the provider currently owes to the Commonwealth because the payment made to the provider was invalid and never should have been made - it is not proposed that debts will be imposed on providers retrospectively.

 

Sub-item 1(3) provides that, if the Secretary determines that sub-item 1(3) applies to a relevant student in relation to an excess amount and a unit of study or VET unit of study:

a)     for the purposes of item 1, the relevant student’s HELP balance is taken, on the census date for the unit, to have been increased by:

                      i.         an amount equal to the excess amount; or

                    ii.         if the Secretary determines another amount—that amount; and

b)     the Commonwealth must lend to the student an amount of FEE-HELP or VET FEE-HELP assistance for the unit equal to the excess amount or the determined amount (as the case may be); and

c)     the Commonwealth must pay the amount lent to the provider in discharge of the student’s liability to pay the student’s tuition fee for the unit.

 

The purpose of sub-item 1(3) is to allow the Secretary to prospectively determine that a payment made to a provider on behalf of a student should be validated, with the result that the Commonwealth prospectively makes a loan to a student, and a payment to a provider, with respect to a unit of study.

 

Sub-item 1(4) allows the Secretary, on behalf of the Commonwealth, to set off the amount of a debt due to it by a provider under sub-item 1(2) against an amount that is payable to the provider under paragraph 1(3)(c). This means that, where a provider has been invalidly paid an amount as described in sub-item 1(1), any amount owed will be set off against any payment required to be made to the provider by the Commonwealth under sub-item 1(3).

 

Sub-item 1(5) provides that the Consolidated Revenue Fund is appropriated for the purposes of payments under sub-item 1(3).

 

Sub-item 1(6) provides that sub-item 1(7) applies if the Secretary makes a determination in relation to a relevant student under sub-item 1(3).

 

Sub-item 1(7) provides that HESA has effect, and is taken to always have had effect, as if, under sub-item 1(3), the Commonwealth had made the loan to the student, and made the payment to the provider:

a)     if the excess amount was a purported payment of FEE-HELP assistance for a unit of study—under section 110-1 of HESA for that unit of study; or

b)     if the excess amount was a purported payment of VET FEE-HELP assistance for a VET unit of study—under clause 55 of Schedule 1A of HESA for that unit of study;

and to have done so immediately after the census date for the unit of study or VET unit of study.

 

This sub-item deems that the relevant provisions of HESA apply to the prospective loans and payments made by the Commonwealth under sub-item 1(3) from the date immediately after the census date for the relevant unit of study. This will then allow students to repay the loan made by the Commonwealth under sub-item 1(3) through the taxation system.

 

Sub-item 1(8) provides that, despite subsection 128-25(2) of HESA, the Secretary must not re-credit the relevant student’s HELP balance with an amount equal to the amount lent to the student under item 1 if, and to the extent that, the re-crediting would have the effect that the student’s HELP balance would exceed the HELP loan limit for the student. This is to ensure a student’s HELP balance is not

re-credited with amounts lent in excess of the applicable HELP loan limit once the resulting excess debts are repaid through the taxation system.

 

Sub-item 1(9) provides that the Secretary may, in writi ng, delegate to an S ES employee, or an acting SES employee, in the Department all or any of the powers of the Secretary under sub-items 1(3) and (4). Sub-item 1(10) provides that, in exercising powers under the delegation at sub-item 1(9), the delegate must comply with any directions of the Secretary. In practice, the power of the Secretary in

sub-items 1(3) and (4) will only be delegated to those SES (or acting SES) employees in the Department that are responsible for the administration of HELP.

 

Sub-item 1(11) provides that a determination made under sub-item 1(3) is not a legislative instrument . Determinations made under sub-item 1(3) are not legislative in character as they simply trigger the application of the law (HESA) to a relevant student where sub-item 1(1) applies, and do not determine or alter the law. As such, these determinations do not meet the definition of a legislative instrument set out in subsection 8(4) of the Legislation Act 2003 .

 

Sub-item 1(12) provides that expressions used in item 1 that are also used in HESA have the same meaning in item 1 as they have in HESA.

 

Example of application of item 1

 

Student X studies at university upon finishing school, is allocated a CHESSN and completes a degree. After finishing the first degree, Student X enrols in another course at a different provider but supplies a different first name and address as they are now known by their middle name and have moved house. They had not  previously provided their full name, including middle name, in their request for HELP assistance. Student X is allocated a new CHESSN as the system is unable to match their previous CHESSN due to the change in name and personal details. Student X took loans of $80,000 in FEE-HELP assistance initially, and an additional $80,000 in FEE-HELP for their further study. The relevant HELP loan limit is $100,000. Student X is identified as having more than one CHESSN, and when their records are merged, is found to have exceeded the HELP loan limit by $60,000.

 

Item 1 will allow the Secretary to increase student X’s HELP balance to accommodate the loans in excess of the HELP loan limit (i.e. by $60,000), so that they are not invalidated, and student X can repay the loans through the taxation system. Any repayments of the excess amount of $60,000 that student X makes through the taxation system will not be re-credited to student X’s HELP balance (due to the operation of sub-item 1(8)). However, once student X has paid off the $60,000 excess debt amount, any other repayments below the HELP loan limit of $100,000 will be re-credited to student X’s HELP balance e.g. if student X pays off $5,000 below the $100,000 HELP loan limit, $5,000 will be credited to student X’s HELP balance.

 

 

Item 2 - Approvals and payments relating to VET student loans

 

Item 2 has the effect of validating certain approvals and payments relating to VSL and it operates in a similar way to item 1.

 

Sub-item 2(1) provides that item 2 of Schedule 2 applies if:

a)     a payment was made by the Commonwealth to an approved course provider; and

b)     the payment was purportedly on account of an amount (the ‘excess amount’) of VSL for a course; and

c)     the payment was purportedly paid under the VSL Act to pay tuition fees for a student (a ‘relevant student’) for the course; and

d)     the excess amount was greater than the amount of a loan that could be approved for the student because the excess amount would reduce the student’s HELP balance to less than zero; and

e)     the census day for the course or a part of the course occurred during the period:

                      i.         starting on 1 January 2017; and

                    ii.         ending on 31 December 2019.

 

As described above, imperfect automated data matching has led to a small number of students with more than one CHESSN who have subsequently exceeded their HELP loan limit. When the CHESSNs of these students are merged, any debt relating to amounts of VSL over the student’s relevant HELP loan limit will be invalidated. Affected providers would need to repay the affected tuition fees to the Department, and providers would not be able to pursue individual students for the excess debt amounts.

 

Sub-item 2(2) provides that, to the extent that it has not already been repaid to the Commonwealth before the commencement of item 2, any payment made to a provider as described under sub-item 2(1) is a debt due to the Commonwealth and may be recovered by the Commonwealth in a court of competent jurisdiction. This sub-item has the same purpose as sub-item 1(2) (described above), but in relation to VSL payments.

 

Sub-item 2(3) provides that, if the Secretary determines that sub-item 2(3) applies to a relevant student in relation to an excess amount and a course:

a)     for the purposes of item 2, the relevant student’s HELP balance is taken, on the census day for the course or a part of the course, to have been increased by:

                      i.         an amount equal to the excess amount; or

                    ii.         if the Secretary determines another amount—that amount; and

b)     the Secretary is taken to have approved a loan amount for the student for the course equal to the excess amount or the determined amount (as the case may be); and

c)     the Secretary must pay an amount equal to the approved loan amount to the provider to pay the student’s tuition fee for the course.

 

Sub-item 2(4) allows the Secretary, on behalf of the Commonwealth, to set off the amount of a debt due to it by a provider under sub-item 2(2) against an amount that is payable to the provider under paragraph 2(3)(c). 

 

Sub-item 2(5) provides that the Consolidated Revenue Fund is appropriated for the purposes of payments under sub-item 2(3).

 

If the Secretary makes a determination under sub-item 2(3), the VSL Act or HESA will apply depending on when the excess amount was paid to the provider:

 

  • if the excess amount was paid on or after 1 July 2019, the VSL Act has effect, and is taken to always have had effect, as if the Secretary had approved the loan and used the loan to make the payment to the provider in accordance with relevant provisions in the VSL Act, and to have done so immediately after the census day for the course or part of the course (sub-items 2(6)-(7));

 

  • if the excess amount was paid before 1 July 2019, HESA has effect, and is taken to always have had effect, as if the Secretary had approved the loan and used the loan to make the payment to the provider in accordance with relevant provisions in the VSL Act, and to have done so immediately after the census day for the course or part of the course (sub-items 2(9)-(10)).

 

This distinction reflects the fact that loan amounts paid before 1 July 2019 result in students incurring HELP debts under HESA, while loan amounts paid on or after 1 July 2019 result in VETSL debts under the VSL Act. Amongst other things, items 2(7) and (10) ensure those debts are managed and repaid in accordance with HESA or the VSL Act, as applicable.

 

Sub-item 2(8) provides that, despite subsection 73A(2) of the VSL Act, the Secretary must not re-credit the relevant student’s HELP balance with an amount equal to the amount lent to the student under item 2 if, and to the extent that, the

re-crediting would have the effect that the student’s HELP balance would exceed the HELP loan limit for the student. This is to ensure a student’s HELP balance is not re-credited with amounts lent in excess of the applicable HELP loan limit once the resulting excess debts are repaid through the taxation system.

 

Sub-item 2(11) operates in a similar way with respect to subsection 128-25(2) of HESA.

 

Sub-item 2(12) provides that the Secretary may, in writing, delegate to an S ES employee, or an acting SES employee, in the Department all or any of the powers of the Secretary under sub-items 2(3) and (4). Sub-item 2(13) provides that, in exercising powers under the delegation under sub-item 2(12), the delegate must comply with any directions of the Secretary.

 

Sub-item 2(14) provides that a determination made under sub-item 2(3) is not a legislative instrument. Determinations made under sub-item 2(3) are not legislative in character as they simply trigger the application of the law (HESA or the VSL Act) to a relevant student where sub-item 2(1) applies, and do not determine or alter the law. As such, these determinations do not meet the definition of a legislative instrument set out in subsection 8(4) of the Legislation Act 2003 .

 

Sub-item 2(15) provides that expressions used in item 2 that are also used in the VSL Act have the same meaning in item 2 as they have in the VSL Act.

 

Item 3 - Compensation for acquisition of property

 

Sub-item 3(1) provides that, if the operation of Schedule 2 would result in an acquisition of property (within the meaning of paragraph 51(xxxi) of the Constitution) from a person otherwise than on just terms (within the meaning of that paragraph), the Commonwealth is liable to pay a reasonable amount of compensation to the person.

 

Sub-item 3(2) provides that, if the Commonwealth and the person do not agree on the amount of the compensation under sub-item 3(1), the person may institute proceedings in the Federal Court of Australia or the Supreme Court of a State or Territory for the recovery from the Commonwealth of such reasonable amount of compensation as the court determines.

 

This item has been included in the Bill as a contingency - it is highly unlikely that this Schedule will result in an acquisition of property other than on just terms.

 



 

Schedule 3   HELP balances

 

Summary

 

Schedule 3 of the Bill amends section 128-15 of HESA to clarify that a student’s HELP balance is taken to be reduced immediately after the census date for

HECS-HELP assistance, FEE-HELP assistance and VET FEE-HELP assistance, and immediately after the census day for VSL.
The purpose of this amendment is to ensure consistency across HELP and VSL by deeming the point in time at which a student’s HELP balance is reduced to be the census date or day.

 

Detailed explanation

 

Higher Education Support Act 2003

 

Item 1 - Subparagraphs 128-15(1)(a)(i) to (iv)

 

Item 1 amends subparagraphs 128-15(1)(a)(i) to (iv) to replace the words ‘payable to’ with ‘payable for.’ This amendment clarifies that HECS-HELP assistance,

FEE-HELP assistance, VET FEE-HELP assistance and VSL are loans payable to providers for (or on behalf of) a person, rather than to a person.

 

Item 2 - After subsection 128-15(1)

 

Item 2 inserts new subsections (1A) and (1B) into section 128-15.

 

New subsection 128-15(1A) provides that, for the purposes of subparagraphs 128-15(1)(a)(i), (ii) and (iii), an amount of HECS-HELP assistance, FEE-HELP assistance or VET FEE-HELP assistance is taken to have been payable for a person immediately after the census date for the unit to which the assistance relates (whether or not the amount has been paid at that time).

 

New subsection 128-15(1B) provides that, for the purposes of subparagraph 128-15(1)(a)(iv), an amount of VSL is taken to have been payable for a person immediately after the census day for the course or a part of the course to which the loan amount relates (whether or not the amount of the loan has been paid at that time).

 

The Higher Education Support Legislation Amendment (Student Loan Sustainability) Act 2018 and the Education and Other Legislation Amendment (VET Student Loan Debt Separation) Act 2018 introduced the combined HELP loan limit and renewable HELP balance for all students who have or will incur a HELP debt or VETSL debt. However, the date on which a HELP loan or VSL is debited from a student’s HELP balance may vary depending on the loan program. These amendments ensure there is consistency across the different student loan programs by deeming the point in time at which a student’s HELP balance is reduced across HELP and VSL to be the census date or day .

 

 

Item 3 - Subclause 1(1) of Schedule 1

 

Item 3 inserts a new definition of ‘census day’ in Schedule 1 of HESA. The term ‘census day’, for a course or part of a course, is defined to have the same meaning as in the VSL Act.



 

Schedule 4   Student loan fee exemption

 

Summary

 

Schedule 4 amends section 137-10 of HESA to implement the loan fee exemption measure from the Government’s Higher Education Relief Package in response to the COVID-19 pandemic. This measure provides undergraduate students seeking FEE-HELP loans with an exemption from the requirement to pay the 25% loan fee for units of study with census dates from 1 April to 30 September 2020, thereby reducing the financial burden on these students during that period.

 

Many students seeking to undertake study in the current climate may defer any decision to enter into a loan, thus reducing enrolment numbers and potentially having a negative financial impact on higher education providers. Providing an exemption from loan fees may provide an incentive for these students to continue or commence semester two study, despite the financial effects of COVID-19.

 

Detailed explanation

 

Higher Education Support Act 2003

 

Item 1 - Paragraph 137-10(2)(b)

 

Item 1 repeals paragraph 137-10(2)(b) and replaces it with a new paragraph which specifies that, for a loan to which paragraph 137-10(2)(a) does not apply (i.e. the unit is not provided by a Table B provider), and, if the loan relates to FEE-HELP assistance for a unit of study that forms part of an undergraduate course of study, the amount of the FEE-HELP debt is:

  • for a unit of study with a census date between 1 April 2020 and 30 September 2020—the amount of the loan, or
  • otherwise—an amount equal to 125% of the loan.

 

This means that, for undergraduate students who apply for FEE-HELP assistance for a unit of study and the unit of study is not being provided by a Table B provider, the loan fee (currently 25% of the loan) will not be applied to their FEE-HELP loan if the census date for the unit falls between 1 April 2020 and 30 September 2020 (inclusive). From 1 October 2020, the 25% loan fee will again be applied to the FEE-HELP loans of undergraduate students if the census date for the unit falls on or after that date.

 

 



 

Schedule 5   Other amendments  

 

Summary

 

Schedule 5 of the Bill includes the following minor and technical amendments to HESA:

 

·          Part 1 amends section 128-20 to include an ‘approved course’ (as defined in the VSL Act) in the definition of ‘course of study in aviation’ to make a technical correction and ensure that the higher HELP loan limit is available to students enrolled in VET, as well as higher education, aviation courses that enable graduates to obtain commercial flying qualifications; and

·          Part 2:

o    amends the table in subsection 16-15(1) to change the name of a university to ensure consistency with state legislation and university branding, and

o    makes a minor technical amendment to subsection 166-20(5) to replace the words ‘an approved course provider’ (not defined in HESA) with ‘a higher education provider’ (defined in HESA).

 

Detailed explanation

 

Higher Education Support Act 2003

 

Part 1—Amendments commencing 1 January 2020

 

Division 1—Amendments

 

Item 1 - Subsection 128-20(2)

 

Item 1 amends section 128-20 to include an ‘approved course’ (as defined in the VSL Act) in the definition of ‘course of study in aviation.’ This change makes a technical correction and ensures that the higher HELP loan limit is available to students enrolled in VET, as well as higher education, aviation courses that enable graduates to obtain commercial flying qualifications.

 

Division 2 Application and transitional provisions

 

Item 2 - Application of amendments

 

Item 2 provides that the amendment of section 128-20 set out in item 1 applies in relation to a student who is enrolled in a course of study in aviation on or after the commencement of item 2, whether the student enrolled in that course before or after that commencement.

 

 

 

 

 

Part 2— Amendments commencing on Royal Assent

 

Items 3 and 4 - Subsection 16-15(1) (table)

 

Items 3 and 4 amend the table in subsection 16-15(1) to change the name of a Table A provider from ‘University of Western Sydney’ to ‘Western Sydney University.’ This change ensures consistency between HESA and current state legislation and university branding.

 

Item 5 - Subsection 166-20(5)

 

Item 5 amends subsection 166-20(5) to replace the reference to ‘an approved course provider’ (which is not a defined term is HESA) with a reference to ‘a higher education provider’ (which is a defined term in HESA). This is a minor technical amendment to ensure that correct terminology is used throughout HESA.