House of Representatives

Higher Education Legislation Amendment (2006 Budget and Other Measures) Bill 2006

Explanatory Memorandum

(Circulated by authority of the Minister for Education, Science and Training, the Honourable Julie Bishop MP)

Schedule 2-FEE-HELP limit

Higher Education Support Act 2003

Item 1 Subsection 104-15(1)

Repeals subsection 104-15(1) and substitutes a new subsection dealing with how a person's FEE-HELP balance is calculated at a particular time. If a person's FEE-HELP limit exceeds the sum of all of the amounts of FEE-HELP assistance they have previously been paid (reduced by any amounts previously re-credited under Subdivision 104-B) that excess represents the person's FEE-HELP balance. In all other cases the person's FEE-HELP balance is zero.

The amendment clarifies how a person's FEE-HELP balance is calculated where re-crediting occurs and the person's FEE-HELP limit has been reduced. If an amount is to be re-credited to a FEE-HELP balance, the balance that is to be re-credited is worked out immediately before that re-crediting. The balance is worked out after the re-crediting by taking account of the amount re-credited. If a person's FEE-HELP limit has been reduced, the balance might not increase, or might not increase by the same amount as the amount re-credited.

Item 2 Section 104-20

Repeals section 104-20 and substitutes a new section which has the effect of increasing the general FEE-HELP limit to $80,000 and the FEE-HELP limit for students enrolled in a medicine, dentistry or veterinary science course to $100,000. The FEE-HELP limit is indexed under Part 5-6 of the Act.

Item 3 Application of amendment of FEE-HELP limit

An application provision which provides that paragraph 104-20(b) of the Act (as amended by item 2) only applies in relation to a person who is enrolled in a course of study mentioned in that paragraph on or after 1 January 2007. Paragraph 104-20(b) of the Act sets a new FEE-HELP limit of $100,000 for medicine, dentistry and veterinary science students.

Item 4 Transitional provision

A transitional provision which has the effect of providing that the new FEE-HELP limits in section 104-20 inserted by item 2 are not to be indexed on 1 January 2007. Indexation is to commence from the 2008 funding year.

Item 5 At the end of subsection 110-5(1)

Inserts a note at the end of subsection 110-5(1) (which deals with payments of FEE-HELP assistance to providers on behalf of students) to reflect the amendment made by item 2. The note informs the reader that the provider must repay the amount paid under subsection 110-5(1) even if the person's FEE-HELP balance is not increased by an amount equal to the amount re-credited.

Item 6 At the end of subsection 137-10(4)

Inserts a note at the end of subsection 137-10(4) (which deals with the remission of a person's FEE-HELP debt) to reflect the amendment made by item 2. The note provides that the FEE-HELP debt is taken to be remitted even if the person's FEE-HELP balance is not increased by an amount equal to the amount re-credited.

Items 7 and 8 Clause 1 of Schedule 1

Insert new definitions of course of study in dentistry and course of study in veterinary science in the Dictionary at clause 1 of Schedule 1 to facilitate the amendment made by item 2, which implements the 2006-07 Budget initiative to increase the general FEE-HELP limit to $80,000 and to $100,000 for medicine, dentistry and veterinary science students.


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