Explanatory Memorandum(Circulated by the authority of the Minister for Education, the Honourable Dan Tehan MP)
Schedule 1 - Increased HELP loan limit for specified aviation courses
The amendments to HESA in Schedule 1 to the Bill will commence on 1 January 2020, immediately after the commencement of Schedule 3 to the Student Loan Sustainability Act.
Schedule 1 to the Bill will amend HESA to introduce a measure that allows students undertaking certain aviation courses of study to have access to the higher HELP loan limit of $152,700 from 1 January 2020.
This measure was announced as part of the 2019-20 Budget, which addresses aviation stakeholder and student concerns that the lower HELP loan limit of $106,319 for 2020 is too low. The lower HELP loan limit does not enable students to cover the full tuition fees for courses that enable them to obtain the licence and ratings required by Civil Aviation Safety Authority for a Commercial Pilot Licence for most practical commercial aviation employment.
The Minister will be able to determine, through the FEE-HELP Guidelines (a legislative instrument made under HESA), the aviation courses for which the higher HELP loan limit will apply. These will be courses that enable a person to qualify for a Commercial Pilot Licence, and will be based on the courses specified in Schedule 2 to the VET Student Loans (Courses and Loan Caps) Determination 2016 (which sets out high-cost VET courses for which a VET student loan cap of $75,000 ($77,571 in 2019) applies).
Part 1 - Amendments
Higher Education Support Act 2003
Items 1, 2 and 3 - Increased HELP loan limit for specified aviation courses
Section 128-20 is inserted into HESA by the Student Loan Sustainability Act, on 1 January 2020, as part of the measure to expand current limits on HELP loans under HESA to include HECS-HELP assistance. In doing so, the concepts of FEE-HELP limit and FEE-HELP balance are being replaced by the concepts of HELP loan limit and HELP balance, respectively. Section 128-20 will set out a person's HELP loan limit.
Currently, there are two HELP loan limits, a loan limit of $152,700 for persons enrolled in courses of study in medicine, dentistry or veterinary science; and a loan limit of $106,319 for persons enrolled in other courses of study. (These are the loan limits that apply in 2020; the amounts are indexed each year).
Item 1 will repeal and replace section 128-20 of HESA. The effect of the amendment will be to expand the courses of study for which the higher ($152,700) HELP loan limit will apply. From 1 January 2020, that higher loan limit will also apply to persons enrolled in courses of study in aviation.
The courses of study in aviation to which the higher loan limit applies will be specified in the FEE-HELP Guidelines (subsection (2)). These will be courses that enable a person to qualify for a Commercial Pilot Licence.
Item 2 will amend the item in the table in subsection 238-10(1) of HESA that refers to the FEE-HELP Guidelines to include reference to the new subsection 128-20(2).
Item 3 will insert a definition of course of study in aviation in Schedule 1 to HESA (Dictionary), by reference to the new subsection 128-20(2).
Part 2 - Application and transitional provisions
Item 4 - Application of amendments
Item 4 provides that the new section 128-20 (which provides for the higher HELP loan limit to apply to persons enrolled in courses of study in aviation) will apply to persons enrolled in those courses, whether or not the course commenced before or after the commencement of the section. That is, the higher HELP loan limit will not only apply to persons who enrol in courses of study in aviation on or after 1 January 2020; a person who is currently enrolled in a course of study in aviation, and who continues to be so enrolled on and after 1 January 2020, will obtain the benefit of the higher HELP loan limit.
Item 5 - Transitional-indexation
Under Part 5-6 of HESA, the HELP loan limit is indexed every year on 1 January. The HELP loan limits specified in the new section 128-20 inserted by item 1 are already the HELP loan limits that would apply in 2020 if the amounts for 2019 were indexed on 1 January 2020 in accordance with Part 5-6. Item 5 ensures that the amounts specified in the new section 128-20 are not indexed under Part 5-6 on 1 January 2020 (which would, in effect, result in the HELP loan limit amounts for 2020 being amounts as if the amounts for 2019 were indexed twice).