House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Education, the Honourable Dan Tehan MP)

Schedule 1 - Amendment of the Tertiary Education and Quality Standards Agency Act 2011

Summary

Schedule 1 to the Bill implements the extension of tuition protection arrangements to apply to domestic students that pay for their tuition fees up-front at a private registered higher education provider under the TEQSA Act. This is intended to ensure these students receive the same high quality tuition protection as students who access FEE-HELP or HECS-HELP assistance at a private higher education provider. Those arrangements offer support through either a suitable replacement unit or suitable replacement course to continue their studies; or a refund of their up-front payment for incomplete units of study that the provider failed to deliver.

Schedule 1 to the Bill also amends the TEQSA Act to provide for the requirement that a defaulting provider has initial responsibility to take action to provide a remedy to their affected students. If the defaulting provider is unable to provide a remedy to their affected students, then the TP Director becomes involved to assist in providing the tuition protection to the affected students in order to enable them to continue their studies and obtain a qualification. These amendments ensure the tuition protection process is consistent for both affected HELP students, and up-front fee paying students in the higher education sector, and aligns with the successful tuition protection model for international students that already utilises this approach.

Detailed explanation

Tertiary Education Quality and Standards Agency Act 2011

Items 1-5 - Section 5 (Definitions)

Items 1, 3 and 5 insert definitions into section 5 of the TEQSA Act relating to tuition protection, including the following key definitions:

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affected unit which, in respect of an original course, means a unit of study that a domestic student was enrolled in at a time when the student's registered higher education provider defaulted in relation to the student.

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default refers to when a provider defaults in relation to a student under new section 62C.

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domestic student means a student who is not an overseas student (including an overseas student within the meaning of the ESOS Act) and is enrolled, or proposes to become enrolled in an Australian course of study at a registered higher education provider. For example, a domestic student may include:

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an Australian citizen;

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a person entitled to stay in Australia, or to enter and stay in Australia, without any limitation as to time (for example, a permanent resident);

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a New Zealand citizen;

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a diplomatic or consular representative of New Zealand, a member of the staff of such a representative or the spouse, de facto partner (within the meaning of the Acts Interpretation Act 1901) or dependent relative of such a representative.

This definition is based on the definition of 'domestic student' in subclause 1(1) of Schedule 1 to HESA, to ensure that the same students are covered by the tuition protection arrangements under HESA and the TEQSA Act. Also, the definition clarifies that overseas students (within the meaning of the ESOS Act) do not come within the scope of the new tuition protection arrangements. Overseas students are already provided tuition protection under the ESOS Act.

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Higher Education Tuition Protection Director means the person referred to in section 167-15 of HESA. The office of the TP Director is held by the same person who holds the office of TPS Director under section 54A of the ESOS Act. The TP Director is responsible for performing functions and exercising powers in relation to tuition protection for domestic students under HESA and the TEQSA Act.

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Higher Education Tuition Protection Fund means the Fund established by section 167-1 of HESA. The Fund is a special account established for the purposes of tuition protection under HESA and the TEQSA Act. New section 62K sets out when the TP Director must make payments from the Fund.

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original course means an Australian course of study in relation to which a registered higher education provider has defaulted.

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overseas student means a person who is not an Australian citizen and is enrolled, or proposes to become enrolled in an Australian course of study with a registered higher education provider or a unit of study access to which was provided by Open Universities Australia - but does not include the persons described at paragraphs (c) to (e) of that definition. This definition is relevant to determining who is a 'domestic student' for the purposes of tuition protection. This definition is based on the definition of 'overseas student' in subclause 1(1) of Schedule 1 to HESA.

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replacement course means an Australian course of study that enables a student to finish their original course or a course that is equivalent to an original course following a provider's default in relation to that student.

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replacement unit means a unit of study that replaces an affected unit of an original course.

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tuition fees means the following:

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in relation to a unit of study for which a domestic student is liable to pay a student contribution amount within the meaning of section 93-5 of HESA, that amount; or

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in relation to a unit of study for which a domestic student is liable to pay tuition fees as defined in Schedule 1 to HESA, that amount; or

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in any other case, tuition fees has the meaning prescribed in the Guidelines. For example, the Guidelines may prescribe the kind of fees that would be considered tuition fees for the purposes of tuition protection, such as tuition fees payable by a student to a provider in order for the student to undertake the unit of study. However, tuition fees would not include incidental fees or fees in respect to the provision of amenities or services that are not of an academic nature.

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tuition protection requirements has the meaning given by new subsection 26A(3).

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unit of study means the following:

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the same meaning as 'unit of study' in subclause 1(1) of Schedule 1 to HESA in relation to an Australian course of study and a registered higher education provider that is also a higher education provider under HESA; or

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in any other case, in relation to an Australian course of study and registered higher education provider means a subject or unit (however described) that a person may undertake as part of the course. If the course is not comprised of subjects or units, unit of study means the course.

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up-front payment for a domestic student for a unit of study includes:

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for a unit of study for which a student is liable to pay a student contribution amount within the meaning of HESA, the up-front payment means the up-front payments referred to under section 93-15 of HESA; or

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for a unit of study for which a student is liable to pay a tuition fee within the meaning of HESA, the up-front payment means the up-front payments referred to under section 107-5 of HESA; or

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in any other case, a payment of all or a part of the student's tuition fees for the unit.

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Up-front Payments Guidelines means the legislative instrument made by the Minister under new section 26B in relation to tuition protection.

Items 1, 3 and 5 also insert definitions into section 5 of the TEQSA Act which have the same meaning as in HESA. For example, FEE-HELP assistance, HECS-HELP assistance and Table A provider.

Items 2 and 4 repeal and substitute the following definitions in section 5 of the TEQSA Act:

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civil penalty provision is defined to refer to provisions that carry a civil penalty. For the purposes of the TEQSA Act (other than in new Part 5A), means a subsection, or a section that is not divided into subsections in the Act that has set out at its foot the words "civil penalty" and one or more amounts in penalty units. For the purposes of Part 5A of the TEQSA Act, civil penalty provision has the same meaning as in the Regulatory Powers Act.

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reviewable decision for a decision by TEQSA means a decision covered by section 183, and a decision relating to tuition protection means a decision covered by new section 187A.

Item 6 - At the end of subsection 21(1)

Item 6 adds new paragraph (c) to subsection 21(1) to include the requirement that TEQSA may grant an application for registration if TEQSA is satisfied that an applicant (to which Part 5A will apply) will comply with the tuition protection requirements introduced in this Bill.

Item 7 - After section 26

Item 7 inserts new section 26A, Condition of registration - compliance with the tuition protection requirements, after section 26. This new condition will only apply to registered higher education providers that Part 5A applies to. Certain providers are exempt from the tuition protection requirements, such as Table A providers (e.g. public universities) and government owned providers (refer to new section 62B). New subsection 26A(3) provides that the tuition protection requirements are the requirements set out in this section, Part 5A and the Guidelines.

The Levy Bill imposes a new up-front payments tuition protection levy ( levy ) for the purposes of the expanded tuition protection scheme under the TEQSA Act. New subsection 26A(4) provides that a provider must pay the levy and any penalties for late payment when it is due and payable. The Notes under subsection 26A(4) clarify that the levy received from a provider is credited to the Fund (see new paragraph 167-5(aa) of HESA) and the Advisory Board advises the TP Director in relation to determining certain components of the levy.

New subsection 26A(5) provides that the Guidelines may make provision in relation to all or any of the matters listed at paragraphs 26A(5)(a) to (h) relating to the collection or recovery of the levy. New subsection 26(6) provides that the Guidelines may also for the purposes of paragraph 167-10(1)(b) of HESA make provision in relation to payments made in connection with the tuition protection requirements. The purposes of the Fund are set out in section 167-10 of HESA (as amended through Item 25 of Schedule 2 to the Bill). Paragraph 167-10(1)(b) of HESA provides that the purposes of the Fund include making payments in connection with tuition protection under the TEQSA Act and the Guidelines.

It is appropriate for the Minister to prescribe administrative details related to tuition protection through the Guidelines in respect to the collection or recovery of the levy and payments made in connection with tuition protection, because it will allow administrative and technical details of the scheme to be adjusted relatively quickly as required (compared to the provisions of primary legislation). For example, it is desirable for the Guidelines to set out details relating to the refund, remission or waiver of the levy, to provide flexibility to respond to unforeseen circumstances such as the economic impact of the COVID-19 pandemic on providers. The Guidelines are a legislative instrument for the purposes of the Legislation Act 2003 and therefore subject to appropriate parliamentary scrutiny and disallowance processes.

Information and documents related to tuition protection

New subsections 26A(7) to (9) include conditions of registration that require registered higher education providers to keep certain records and provide certain information and documents to the Secretary for the purposes of administering tuition protection. The Guidelines may specify information or documents that a provider must keep records in relation to and give to the Secretary in the period, manner and form approved by the Secretary (subsections 26A(7) and (8)). Subsection 26A(9) sets out the kind of information and documents that may be required, including information about a provider's domestic students, tuition fees (including about up-front payments) and student contact information.

The Secretary will collect and provide the information to the TP Director for the purposes of assisting students when a provider defaults (refer to paragraph 179-20(a) of HESA which authorises the disclosure of personal information between the Secretary and TP Director).The Secretary's collection, use and disclosure of personal information from providers about domestic students under this new requirement is reasonable, proportionate and necessary to support the administration of tuition protection to quickly and effectively assist students when a provider defaults. The Secretary and TP Director are also required to comply with the relevant Australian Privacy Principles ( APPs ) contained in the Privacy Act 1988 regarding the collection, use and disclosure of personal information.

It is appropriate for the Minister to provide the administrative and technical details of the information requirements in the Guidelines in order for changes to be made relatively quickly (compared to the provisions of primary legislation), in the event that changes in policy or provider circumstances give rise to the need for changes in the administration of the scheme. The use of delegated legislation allows the Minister, with appropriate parliamentary scrutiny, to work out the application of the law as it applies to the administrative details of the scheme. For instance, it is desirable for the Guidelines to set out the administrative requirements around what information providers should provide to the Secretary in order for the TP Director to have readily available information to contact and place students in replacement courses or provide refunds as applicable.

New section 26B provides that the Minister may, by legislative instrument, make the Guidelines providing for matters required or permitted by the TEQSA Act or HESA, or that are necessary or convenient to be provided in order to carry out or give effect to Part 5A of the TEQSA Act or Parts 5-1A or 5-1B of HESA. The same TP Director, Fund and Advisory Board will be responsible for tuition protection for domestic students that are entitled to HECS-HELP or FEE-HELP assistance under HESA and also students that make up-front payments for their units of study at a provider under the TEQSA Act.

Item 8 - After Part 5

Part 5A- Tuition protection

Item 8 inserts new Part 5A in the TEQSA Act. Section 62A provides an outline about what Part 5A is about.

Division 1 - Preliminary

Section 62B Application of this Part

New section 62B provides that Part 5A applies to certain registered higher education providers.

Paragraphs 62B(1)(a) to (c) exclude Table A providers (e.g. public universities), providers owned by the Commonwealth, a State or a Territory or providers established under legislation, such as TAFEs. The Minister may also prescribe providers of a kind that are exempt from the tuition protection requirements through the Guidelines (paragraph 62B(1)(d)).

The purpose of the Bill is to provide a sustainable framework for the provision of tuition protection for domestic students that make up-front payments at a private higher education provider. In part, this will be achieved by ensuring that there are adequate credits to the Fund from levies received from providers. Generally it is those providers that are of minimal risk of default and/or have the capability to protect students in the event of a default, who are likely to be exempt from tuition protection requirements. For example, Table A providers and TAFEs have been expressly excluded from this scheme given they are considered very low risk, and in the unlikely event of a default, should have the capacity and capability to place students without the assistance of the TP Director.

It is desirable to allow the Minister, through delegated legislation (Guidelines), maximum flexibility to exempt classes of providers. This is because the circumstances and classes of providers for which it may be appropriate to exempt are not certain and cannot necessarily be foreseen. Specifying this detail in delegated legislation may avoid the need to amend the primary legislation in order to exempt a class of provider not currently contemplated for an exemption, and will allow the Minister to act relatively quickly in the event that changes to policy give rise to the need for changes.

In addition, the Minister may, by written notice, determine that Part 5A applies or does not apply to a specified registered higher education provider if the Minister considers it appropriate (subsection 62B(2)). In deciding whether it is appropriate to make a determination, the Minister must have regard to the criteria at subsection 62B(3). The criteria include matters relevant to a provider's risk of defaulting, financial status, risk of non-compliance, advice from TEQSA or the TP Director, and any other matter the Minister considers appropriate. The Minister's power to determine, by non-legislative instrument, individual providers to which the tuition protection requirements apply enables the Minister to react to changes in a dynamic sector, while considering the risk the provider poses to the sector and protection to students in respect to their up-front payments. In addition, the intention of this objective criteria is to ensure that the tax consequently imposed through the up-front payments tuition protection levy on leviable providers through the Levy Bill is also based on objective criteria.

As a non-legislative instrument, a determination under subsection 62B(2) enables rapid response to provider and sector changes. This is critical as conditions or time limitations specific to individual providers made under subsection 62B(4) can be introduced, amended or revoked without delay. Non-legislative instruments give certainty to providers that the Minister's decision is final and not capable of disallowance. This ensures that providers, and students, have certainty about whether the tuition protection requirements apply to them, which assists with financial and compliance planning. This level of certainty is particularly important for providers given that the Minister's determination has the additional consequence that providers are not a 'leviable provider' for the purposes of the Levy Bill.

The overarching purpose of the Bill is to ensure that students are adequately protected in the event of provider default. It is essential that changes in provider circumstances can be responded to rapidly and with certainty for students, as well as for the TP Director. This is achieved by the Minister's power to make a determination having regard to the matters listed in subsection 62B(3) which is relevant to assessing the provider's risk of default.

Subsection 62B(5) clarifies that a determination made under subsection 62B(2) is not a legislative instrument. This subsection is included in the Bill to assist readers, as the determination is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003.

Subsection 62B(6) provides that despite any exemptions, certain provisions in the Bill continue to apply to all providers relating to provider obligations in providing a replacement course to an affected student. This reflects that, in some cases, Table A providers and other exempt providers may agree to act as a replacement provider for students whose providers have defaulted. In these circumstances, it is appropriate that the TP Director can require a potential replacement provider to provide information about suitable replacement courses for a student. It is also appropriate to ensure that the same protections apply to these students, namely that the replacement providers are required to grant them course credits as appropriate, not charge them tuition fees for the replacement unit and enrol them as soon as practicable.

Section 62C When a provider defaults in relation to a student

New section 62C sets out the circumstances when a registered higher education provider defaults in relation to a domestic student. These circumstances include where the provider:

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fails to start to provide a unit of study to the student on the day on which the unit was scheduled to start; or

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ceases to provide a unit of study on a day that is after the unit starts but before it is completed; and

the student has not withdrawn before that day, and either the student has made an up-front payment for the unit on or before that day, or an up-front payment was not made for the unit on or before that day and the student was not entitled, and would not have been entitled, to FEE-HELP or HECS-HELP assistance for the unit.

For example, new subparagraphs 62C(1)(c)(i) and 62C(2)(c)(i) include the circumstances where a student has paid their tuition fees for a unit of study entirely through up-front payments and the provider defaults before commencing the unit or defaults after commencing the unit but before it is completed.

The purpose of subparagraphs 62C(1)(c)(ii) and 62C(2)(c)(ii) is to provide for the circumstances where a student has not made an up-front payment for the unit of study and the student was not entitled and would not be entitled to FEE-HELP or HECS-HELP assistance under HESA for that unit. For example, new subparagraph 62C(2)(c)(ii) includes the circumstances where a student is at a higher education provider (within the meaning of HESA) and is not entitled to any FEE-HELP or HECS-HELP assistance for the unit because they have exceeded their HELP balance and therefore the student has no other option but to pay for the unit entirely up-front. The student has not yet made an up-front payment and the provider has started providing the unit but ceases to provide the unit before completion.

It is a matter of fact based on the circumstances whether or not a provider defaults. Similarly, the cause of the default does not matter for the purposes of section 62C, whether it occurs because the provider of their own accord ceases to provide a unit of study or whether it is the result of compliance action taken against the provider.

New subsection 62C(3) enables the Guidelines to prescribe circumstances which, if they occur, will mean that a provider has defaulted in relation to a domestic student. This provision is not intended to extend the broad circumstances described in subsections 62C(1) and (2) but rather allow for greater precision and clarity in respect of what situations will, in practice, give rise to a default. For example, the Guidelines may set out situations such as if the student is not enrolled in a unit at a particular time but the provider defaults in relation to the course which prevents the student from completing their course, or if a provider ceases to be a registered higher education provider or enters into liquidation, both of which inevitably mean the provider can no longer be delivering the course to a student.

The Note at the end of the section reminds the reader about higher education provider defaults in HESA. If the student was entitled or would have been entitled to FEE-HELP or HECS-HELP assistance in relation to the unit of study or any other affected units of the original course the provider may also have defaulted in relation to the student under section 166-10 of HESA. A provider may default in relation to the same student under new section 62C of the TEQSA Act and section 166-10 of HESA, depending on the student's payment of tuition fees and entitlement to FEE-HELP or HECS-HELP assistance. The same provider obligations follow under both Acts and the same TP Director will assist the student if the provider fails to do so.

Division 2 - Tuition Protection

Subdivision A - Obligations of defaulting providers

Section 62D Providers must give notice of default to Higher Education Tuition Protection Director

New section 62D applies if a registered higher education provider defaults in relation to a domestic student. A provider must give written notice to the TP Director of the circumstances of a default within 24 hours of the default occurring. Being aware of the default as soon as possible will allow the TP Director to promptly begin assisting students as required.

Under subsection 62D(3), a provider must give written notice to the TP Director of certain matters within 3 business days of defaulting. The notice must detail the following information:

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student's full name and contact details;

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units of study and Australian course of study that the student was enrolled in at the time of default;

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amount of tuition fees for each affected unit that the student was enrolled in at the time of default;

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details about the payment of those tuition fees, including the sum of any up-front payments or amount of FEE-HELP or HECS-HELP assistance obtained for any affected units;

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advice as to whether the provider intends to discharge its obligations to the student and how (if appropriate); and

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any other matter prescribed by the Guidelines.

The TP Director may also request in writing that the provider give the TP Director a copy of a student's record of results for any units of study that the student has completed. Providers are already required, under their obligations as registered higher education providers, to give a record of results to students. This information will aid the TP Director with assisting a student to find a suitable replacement course if the provider fails to discharge its obligations.

A notice given under subsections 62D(2) or (3) must comply with any requirements prescribed by the Guidelines. For example, the Guidelines may prescribe the manner by which the information is to be provided to the TP Director, such as by a secure USB, or for it to be reasonably compatible with existing systems.

The above information is necessary for the TP Director to be able to liaise with students and possible replacement providers as soon as possible and identify whether there are any suitable replacement courses for students if the provider fails to discharge its obligations. Providers are already required to keep and maintain this information and so they should be able to collate the material for each student without undue burden and within the 3 business day timeframe. Therefore, the disclosure of personal information to the TP Director is reasonable, necessary and proportionate to achieving the legitimate aim of assisting affected students in the event of a provider default.

Failure to comply with section 62D gives rise to a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the TP Director's ability to assist affected students. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

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the offence is not punishable by imprisonment;

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the offence is punishable by a fine of up to 60 penalty units;

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the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

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the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

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there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

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the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62E Providers must give notice of default to affected students

New section 62E applies if a registered higher education provider defaults in relation to a domestic student (see section 62C).

The provider must give written notice of the default to students in relation to whom the provider has defaulted within 24 hours. It is important that students are notified as soon as possible of the default. The notice must comply with any requirements prescribed by the Guidelines. It is appropriate that these matters are prescribed in the Guidelines since they are likely to be of an administrative nature.

Contravention of this requirement gives rise to a civil penalty and an offence of strict liability. In both instances the penalty is 60 penalty units. Making contravention of this provision subject to civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the TP Director's ability to assist affected students. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

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the offence is not punishable by imprisonment;

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the offence is punishable by a fine of up to 60 penalty units;

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the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

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the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

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there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

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the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62F Obligations on providers in case of default

New section 62F applies if a registered higher education provider defaults in relation to a domestic student.

Provider obligations

The provider must discharge certain obligations to the student within 14 days after the day the provider defaulted ( provider obligation period ). The provider discharges its obligations if:

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the provider arranges for the student to be offered a place in a suitable replacement unit or suitable replacement course and the student accepts the offer in writing; or

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the provider provides a refund of the amount equal to the sum of any up-front payments to the student in accordance with subsection 62F(8).

Once the provider discharges its obligations, the student is effectively assisted in either finding a suitable replacement unit or suitable replacement course to continue their studies or provided a refund of their up-front payments for the affected unit.

Suitable replacement units or suitable replacement courses

Under subsection 62F(4), the provider must identify whether:

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there is one or more suitable replacement units or suitable replacement courses for the student; or

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there is no suitable replacement unit or suitable replacement course for the student.

The provider must have regard to the matters listed in subsection 62F(5) in identifying whether a course is a suitable replacement course, including:

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whether the replacement course leads to the same or a comparable qualification as the original course;

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any credits the student may receive for the units of study of the original course successfully completed by the student;

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mode of delivery and location;

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whether the student will incur unreasonable additional fees and be able to attend the course without unreasonable impacts on the student's prior commitments;

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and other matters prescribed by the Guidelines.

Similarly, the provider must have regard to the matters listed in subsection 62F(6) in identifying whether a unit is a suitable replacement unit, including:

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whether the student will receive credit under the student's original course for the replacement unit. For example, if the student will be able to obtain course credit towards their original course with the replacement unit so that the student does not need to undertake an additional unit;

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mode of delivery and location;

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whether the student will incur unreasonable additional fees and be able to attend the replacement unit without unreasonable impacts on the student's prior commitments;

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any other matters prescribed by the Guidelines.

A suitable replacement unit may be available to the student in the circumstances where the student is still able to continue their original course, and only requires a replacement unit for the affected unit to continue their original course.

Suitable replacement unit or suitable replacement course available

If the provider identifies that there are one or more suitable replacement units or suitable replacement courses for the student, then the provider must give a written notice to the student in accordance with new subsection 62F(7). This includes that the notice must provide the student a choice to do one of the following:

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enrol in a suitable replacement unit or suitable replacement course (as identified by the provider);

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enrol in another unit of study or course; or

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elect to receive a refund for the up-front payments made by the student in relation to the affected unit.

Paragraphs 62F(7)(b) to (f) specify important information that a provider must include in the notice so that the student can make an informed choice about their options above. The Minister may also prescribe other matters in the Guidelines which the notice must include.

No suitable replacement unit or suitable replacement course or student elects refund

Subsection 62F(8) provides that if the provider identifies no suitable replacement course or suitable replacement unit, or the student elects to receive a refund, then the provider must pay the student a refund of the amount equal to the sum of any up-front payments made for the student's affected units (refer to the new definition of 'up-front payment' inserted by Item 5 of the Bill). This obligation ensures that a student is afforded a refund for any up-front payments for tuition fees paid to the provider for the affected unit.

Under subsection 62F(9), the provider must provide the refund in accordance with any requirements prescribed by the Guidelines. For example, the Guidelines may prescribe that the provider must provide a refund to the student via electronic transfer to the student's nominated bank account.

Elections for FEE-HELP or HECS-HELP must be consistent

Subsection 62F(10) provides that despite paragraph 62F(7)(a) (student choice), if the student was entitled to FEE-HELP or HECS-HELP assistance for any affected units of the original course, any elections made under that paragraph in relation to those units must be consistent with any elections made under paragraph 166-25(7)(a) of HESA. Section 166-25 of HESA (as amended by Item 90 of Schedule 2 to the Bill) imposes obligations on higher education providers in case of default in relation to students under section 166-10 of HESA. Generally, HESA provides tuition protection to students that are entitled or would have been entitled to FEE-HELP or HECS-HELP assistance for the unit of study.

If a provider defaults under both section 166-10 of HESA and section 62C of the TEQSA Act in relation to the same student, then the student must make a consistent election under both schemes. An example is included under subsection 62F(10). The Minister may prescribe through the Guidelines the circumstances in which elections are considered to be consistent or inconsistent.

For example, if a student has obtained FEE-HELP assistance for part of the tuition fees for an affected unit, and also made an up-front payment for the tuition fees for the same affected unit, the student can only elect to receive a re-credit of the FEE-HELP assistance (under new subparagraph 166-25(7)(a)(iii) of HESA) and refund of the up-front payment (under new subparagraph 62F(7)(a)(iii) of the TEQSA Act) or elect to enrol in a suitable replacement unit or suitable replacement course (under new subparagraph 166-25(7)(a)(i) of HESA and new subparagraph 62F(7)(a)(i) of the TEQSA Act).

Section 62G Failure to discharge obligations

New section 62G provides that a registered higher education provider is liable to a civil penalty and commits an offence of strict liability if the provider defaults in relation to a domestic student and the provider fails to discharge its obligations to the student in accordance with section 62F. In both instances, the penalty is 60 penalty units.

Subsection 62G(3) provides that the maximum penalty for each day that an offence under subsection 62G(2) continues is 10 per cent of the maximum penalty that can be imposed in respect of that offence. The note under subsection 62G(3) clarifies that subsection 62G(2) is a continuing offence under section 4K of the Crimes Act 1914.

Making contravention of this provision subject to civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the TP Director's ability to assist affected students. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62H Providers to notify of outcome of discharge of obligations

Under new section 62H, if a registered higher education provider defaults in relation to a domestic student under new section 62C, the provider must give a notice to the TP Director within 7 days after the end of the provider obligation period about:

•

whether the provider discharged its obligations to the student in accordance with section 62F;

•

if the provider arranged a replacement unit or replacement course for the student, the details of the student, replacement unit or replacement course and evidence of the student's acceptance of the offer;

•

if the provider provided a refund to the student, the details of the student and details of the amount of the refund.

The purpose of this notification obligation is to ensure that the TP Director is aware of whether a provider has discharged its obligations to a student, and if not, the TP Director is able to take steps to assist the student under section 62J. The notice must comply with any requirements prescribed by the Guidelines.

Failure to comply with section 62H gives rise to a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the TP Director's ability to identify a suitable replacement course for a student affected by a provider default. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Subdivision B - Role of the Higher Education Tuition Protection Director

Section 62J Student placement service

New section 62J applies if the TP Director determines that a registered higher education provider has defaulted in relation to a domestic student and either the provider has failed to discharge its obligations under section 62F to the student by the end of the provider obligation period or the provider is unlikely to be able to discharge its obligations to the student by the end of the provider obligation period.

For example, the TP Director may consider it is unlikely that a provider will discharge its obligations to the student if the provider enters into liquidation, which would inevitably mean the provider is unlikely to offer a suitable replacement course or suitable replacement unit or provide a refund to the student.

The TP Director must decide whether the TP Director is satisfied that there are or are not any suitable replacement courses for the student (see subsection 62J(2)).

Matters relating to whether a course is a suitable replacement course

Under subsection 62J(3), the TP Director must have regard to the following matters in deciding whether there is a suitable replacement course:

•

whether the replacement course leads to the same or a comparable qualification as the original course;

•

what credits the student may receive for the units of study of the original course successfully completed by the student;

•

mode of delivery and location of the replacement course;

•

whether the student will incur unreasonable additional fees and be able to attend the course without unreasonable impacts on the student's prior commitments;

•

any other matters prescribed in the Guidelines.

A course that is a suitable replacement course for one student affected by a provider's default may not be a suitable replacement course for another student affected by the same default.

In some circumstances, a course may still be a suitable replacement course even where not all of the above matters are met; for example, a student may agree to online delivery of the replacement course at a replacement provider despite the original course being face-to-face. An example of when a replacement course may unreasonably impact on the student's prior commitments is if the teaching hours for the replacement course interfere with the student's prior work commitments.

Suitable replacement course available

If the TP Director is satisfied that there is one or more suitable replacement courses for the student, the TP Director must give a written notice to the student in accordance with subsection 62J(4). The notice must provide the student a choice to do one of the following:

•

enrol in a suitable replacement course;

•

enrol in another course; or

•

elect to receive a refund of the amount equal to the amount the provider was liable to pay the student under subsection 62F(8) (i.e. sum of up-front payments for the affected unit).

Paragraphs 62J(4)(b) to (f) specify important information that the TP Director must include in the notice so that the student can make an informed choice about their options above, including information about replacement course options and the contact details of the proposed replacement provider(s) so that the student can undertake their own enquiries. The Minister may also prescribe other matters in the Guidelines which the notice must include.

Accepting an offer of a suitable replacement course

New subsections 62J(5) to (7) set out the requirements for a student that chooses to accept an offer in a suitable replacement course. The student must accept the offer in writing within the period of 30 days after the TP Director gives notice under subsection 62J(4) or within a shorter or longer period (not exceeding 12 months) as otherwise determined by the TP Director. The acceptance must be given to the provider of the suitable replacement course.

No suitable replacement course available

If the TP Director is satisfied that there is no suitable replacement course for the student, the TP Director must provide a written notice to the student in accordance with new subsection 62J(8), which includes:

•

an explanation of the matters the TP Director must have regard to;

•

an explanation of the student's right to request reconsideration, under section 187D, of the TP Director's decision within 28 days after the day on which the student is given the notice;

•

a statement that, to facilitate early refunds, the student may, at any time during the 28 days, give the TP Director notice in writing that the student will not seek reconsideration of the decision;

•

a statement that, if the student does not apply for reconsideration, an amount equal to the amount the provider was liable to pay to the student under subsection 62F(8) will be paid to the student.

The student's right of internal review is for a reconsideration of the TP Director's decision under subsection 62J(2), which is not reviewable by the Administrative Appeals Tribunal. Item 20 inserts new section 187A into the TEQSA Act that deals with reviewable decisions relating to tuition protection. An explanation about the absence of external merits review for this decision is provided under Item 20.

If a student notifies the TP Director prior to the expiry of the 28 days that they will not seek reconsideration of the decision, this does not mean that the actual refund will occur within the 28 days, but rather that the process to facilitate the refund will occur sooner.

Elections for FEE-HELP or HECS-HELP must be consistent

Similar to above, subsection 62J(9) provides that the student must make a consistent choice under HESA and the TEQSA Act if the student was also entitled to FEE-HELP or HECS-HELP assistance for any affected units of the original course. For example, a student who is entitled to FEE-HELP assistance or HECS-HELP assistance for an affected unit of an original course also makes an up-front payment for the same affected unit. If the student elects, under subparagraph 166-25(4)(a)(iii) of HESA to have an amount re-credited to the student's HELP balance, then the student's election under subsection 62J(4) of the TEQSA Act must be to receive a refund under subparagraph 62J(4)(iii).

Section 62K When payments must be made from the Higher Education Tuition Protection Fund

New section 62K provides when the TP Director must make a payment from the Fund. One of the purposes of the Fund under section 167-10 of HESA (as amended by Item 25 of Schedule 2 to the Bill) is to make payments in connection with tuition protection under the TEQSA Act and the Guidelines (paragraph 167-10(1)(b)) of HESA).

If a domestic student accepts an offer of a replacement course in accordance with new subsections 62J(5), (6) and (7), the TP Director must pay an amount equal to the amount the defaulting provider was liable to pay the student under subsection 62F(8) to the provider of the replacement course ( replacement provider ) from the Fund. This means that the TP Director will pay the replacement provider the same amount of the student's up-front payments paid to the defaulting provider for the affected units. This ensures that the replacement provider has the funds to deliver the replacement units of a suitable replacement course to the student.

Under subsection 62K(2), the TP Director must pay the domestic student an amount equal to the amount a provider was liable to pay to the student under subsection 62F(8) if the provider has failed to discharge its obligations to the student by the end of the provider obligation period and either the TP Director decides that is no suitable replacement course for the student or the student elects a refund. This means that the TP Director must pay from the Fund an amount to the student equalling the sum of any up-front payments made by the student to the defaulting provider in relation to the affected units.

Subsection 62K(3) provides that the TP Director is not required to pay an amount to a student under subsection 62K(2) if:

•

the TP Director becomes aware of the circumstances referred to in paragraph 62K(2)(a) more than 12 months after the day the provider defaulted in relation to the student; or

•

the TP Director becomes aware of the circumstances referred to in subparagraph 62K(2)(b)(ii) more than 12 months after the day the TP Director gives notice to the student under subsection 62J(4). For example, the TP Director is not required to pay a refund to the student if the student elects a refund more than 12 months after the day the student received the TP Director's notice.

Subsection 62K(4) provides that the TP Director may pay a greater amount than the amount required to be paid under subsection 62K(1) to a replacement provider if the TP Director considers that to do so would best protect the interests of the student and would not jeopardise the sustainability of the Fund.

Subsection 62K(5) provides that if the TP Director is required to pay an amount to a replacement provider and the amount required to be paid is more than the cost of the replacement course, then the TP Director must pay the difference to the student. The purpose of this provision is to ensure that the student does not pay in excess of the replacement course costs if the up-front payments for the affected units of the original course were greater than the cost of the replacement course. This provision allows the student to receive a repayment of the cost difference between the original course and replacement course.

Under subsection 62K(6), a payment under section 62K must be made in accordance with any requirements prescribed by the Guidelines. For example, the Minister may prescribe in the Guidelines that the TP Director must make the payment via electronic transfer to the replacement provider or student's nominated bank account.

Section 62L Consequences of payments being made from the Higher Education Tuition Protection Fund

New subsection 62L(1) provides that if a registered higher education provider defaults in relation to a domestic student and the TP Director pays an amount in accordance with section 62K, then the student ceases to have any claim against the provider in respect of any up-front payments made for the affected units. For example, the student cannot pursue a claim for breach of contract against the defaulting provider for a refund of the up-front payments made for the affected unit.

Provider must pay back the TP Director

If the TP Director makes a payment under section 62K to a replacement provider or student, then the defaulting provider must pay an amount equal to the amount the TP Director paid in relation to the student back to the TP Director. This is because effectively, the TP Director was required to step in and discharge the defaulting provider's obligation on behalf of that provider to assist the student. The TP Director may, on behalf of the Commonwealth, recover that amount from the provider as a debt due to the Commonwealth by action in a court of competent jurisdiction under new subsection 62L(3). If the provider had granted the TP Director a charge or other security over any of its assets, the TP Director may enforce the charge or security in satisfaction, or partial satisfaction, of the debt (for example, if the provider enters into administration or liquidation) (subsection 62L(4)).

Section 62M Notification obligations for payments made from the Higher Education Tuition Protection Fund

If the TP Director makes a payment under section 62K to a replacement provider or student, then the TP Director must give a written notice to the defaulting provider stating the amounts of any such payments. The purpose of this notice is to advise the defaulting provider of the amount the TP Director paid to discharge the provider's obligations to the student in order for the provider to pay back the TP Director under subsection 62L(2).

Subdivision C - Obligations on replacement providers

Section 62N Obligations of providers to provide information about replacement courses

The TP Director may, by written notice, require a registered higher education provider to provide such information that the TP Director reasonably requires to enable the TP Director to make a decision under new subsection 62J(2) regarding suitable replacement courses for a domestic student in relation to whom a provider has defaulted. The information must be provided in a form (if any) approved by the TP Director and in accordance with such other requirements as the TP Director makes.

The disclosure of personal information about students between the TP Director and replacement provider under this section is reasonable, necessary and proportionate to achieving the legitimate aim of assisting affected students to be placed in a suitable replacement course in accordance with the overall objectives of the Bill to provide tuition protection. For example, the TP Director may request information from a possible replacement provider about course information, including about the offered modes of delivery (e.g. online or face-to-face) in order to assess whether that course is a suitable replacement course for a particular student in consideration of the student's circumstances.

Failure to comply with section 62N gives rise to a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the TP Director's ability to identify a suitable replacement course for a student affected by a provider default. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62P Obligations of replacement providers

New section 62P sets out the obligations that apply to a registered higher education provider when a student accepts an offer of a replacement unit or replacement course with that provider.

The replacement provider must give written notice to the TP Director within 14 days after the student has accepted the offer of a replacement unit or replacement course with the provider. This is important to ensure that the TP Director is made aware that the student has been successfully placed in a replacement unit or replacement course with that provider.

The replacement provider must also ensure that the student is:

•

for a replacement course, granted credits for units of study of the original course successfully completed by the student;

•

if the student has paid tuition fees for an affected unit of the original course, not charged tuition fees for a replacement unit or a replacement unit of the replacement course; and

•

enrolled in the replacement course or replacement unit as soon as practicable.

These requirements ensure that the student is afforded appropriate protections when enrolling in a replacement unit or replacement course.

Contravention of this provision is a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will impact on the ability of students, whose provider has defaulted, to continue their studies in a suitable replacement unit or course. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62Q Obligations of replacement providers regarding enrolment information

New section 62Q requires a replacement provider to keep up to date records of the following in relation to affected students:

•

the student's full name and contact details;

•

the name of the replacement unit or the replacement course (and units of study in that course) that the student is currently enrolled in;

•

any tuition fees paid (or incurred) by the student for the replacement unit or for any units of study of the replacement course;

•

payments made by the TP Director under section 62K to the provider in relation to the replacement course;

•

details of the replacement unit or units of study successfully completed by the student;

•

details of the credits granted to the student for the replacement unit or for the units of study of the original course successfully completed by the student.

Contravention of section 62Q is a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Subdivision D - Miscellaneous

Section 62R Arrangements for payment between providers

If a registered higher education provider (original provider) for a unit of study or an Australian course of study enters into an arrangement with one or more other registered higher education providers to provide the unit or course jointly for one or more domestic students:

•

the arrangement must be such that the students pay their tuition fees directly to the original provider; or

•

the arrangement must be in writing and provide for the receipt and disbursement of any tuition fees paid by students directly to any of the other providers.

These arrangements will ensure that the TP Director can identify which provider has obtained up-front payments from a student for their tuition fees in order to assist the student if the original provider defaults in relation to the student and fails to discharge its obligations to the student.

However, for the purposes of determining the original provider's obligations under the tuition protection requirements, any tuition fees paid by students directly to any of the other third party providers are taken to have been paid directly to the original provider. This requirement is important to ensure that if the original provider defaults in relation to a student under section 62C, that original provider must still meet their obligations under subdivision A to either place the student in a suitable replacement unit or suitable replacement course or provide a refund of any up-front payments to the student.

Contravention of section 62R is a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62S Other tuition protection information must be provided

New section 62S applies to a registered higher education provider if the TP Director believes on reasonable grounds that the provider has information relevant to the TP Director's functions under the TEQSA Act. The TP Director may by, written notice, request a provider to give information within the period (not shorter than 14 days after the notice is given) and manner specified in the notice.

The disclosure of personal information about students between the TP Director and a provider under this section is reasonable, necessary and proportionate to achieving the legitimate aim of the TP Director's role to assist affected students if the defaulting provider fails to discharge its obligations. For example, in order to provide a refund to the student, the TP Director may need to seek further information from the defaulting provider about the details of the student's up-front payments (such as invoices, receipts of payments) for the affected units in order for the TP Director to correctly refund the student under subsection 62K(2).

A provider must comply with the notice, and a contravention of section 62S is a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under the TEQSA Act in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see new section 131D, which triggers Part 5 of the Regulatory Powers Act in relation to Part 5A of the TEQSA Act), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 62T Right to refund may be cancelled etc. without compensation

Under new section 62T, a right to be paid an amount under section 62K is granted on the basis that the right may be cancelled, revoked, terminated or varied by or under later legislation and no compensation is payable if the right is so cancelled, revoked, terminated or varied.

Section 62U Continuing application of Part to certain persons

New section 62U provides that Part 5A continues to apply in relation to a person that was a registered higher education provider as if the person were still a registered higher education provider for the purposes of dealing with or resolving any matter that arose during, or that relates to, the period when the person was a registered higher education provider.

For example, if a registered higher education provider defaults in relation to a student under section 62C, and TEQSA cancels the provider's registration under section 101 of the TEQSA Act following the default, the provider is still required to meet their obligations in relation to tuition protection under Part 5A despite its registration status. The provider must discharge its obligations under section 62F, notify the TP Director under section 62H, repay the TP Director under subsection 62L(2) (if applicable) and provide tuition protection information as requested by the TP Director under section 62S.

Item 9 Subdivision A of Division 2 of Part 7 (after the heading)

Item 9 inserts a Note that there are offence and civil penalty provisions in Part 5A of the TEQSA Act also. The Note clarifies that the Bill introduces new offence and civil penalty provisions in Part 5A relating to tuition protection outside of Subdivision A of Division 2 of Part 7 of the TEQSA Act.

Item 10 Section 104

Item 10 repeals the guide to the Subdivision A - Offences and civil penalty provisions. The repeal of this guide is appropriate because not all offence and civil penalties are now contained within Division 2 of Part 7 because of the new offences and civil penalties included in Part 5A through this Bill. The guidance material with reference to the Criminal Code and Crimes Act 1914 is not necessary guidance that needs to be included in the TEQSA Act and can be readily available through other Commonwealth guidance material and applicable laws.

Item 11 At the end of subsection 115(1)

Item 11 adds a Note at the end of subsection 115(1) to clarify that civil penalty provisions under Part 5A relating to tuition protection are enforceable under the Regulatory Powers Act (see new section 131C).

Item 12 After subsection 125(1)

Item 12 inserts new subsection 125(1A) after subsection 125(1), to provide that subsection 125(1) does not apply in relation to a provision of Part 5A or to the associated provisions of Part 5A. The Note clarifies that enforceable undertakings in relation to Part 5A relating to tuition protection are obtained under the Regulatory Powers Act (see new section 131E).

Item 13 Paragraphs 127(1)(a) and (b)

Item 13 repeals and substitutes paragraphs 127(1)(a) and (b) to clarify that injunctions under section 127 relate to the contravention of the TEQSA Act, other than Part 5A.

Item 14 At the end of subsection 127(1)

Item 14 adds a Note at the end of subsection 127(1) to clarify that injunctions in relation to Part 5A relating to tuition protection are obtained under the Regulatory Powers Act (see new section 131F).

Item 15 At the end of Part 7

Item 15 adds new Division 5 - Enforcement in relation to tuition protection, at the end of Part 7 to provide for the application of the Regulatory Powers Act in relation to Part 5A.

The Regulatory Powers Act provides for a standard suite of provisions in relation to monitoring and investigation powers, as well as enforcement through the use of civil penalties, infringement notices, enforceable undertakings and injunctions. Implementing the Regulatory Powers Act in respect to Part 5A supports the Government's regulatory reform agenda, as it simplifies and streamlines Commonwealth regulatory powers across the statute book. In particular, implementing the Regulatory Powers Act in respect to Part 5A streamlines the Commonwealth's regulatory powers across the higher education sector as it relates to tuition protection for domestic students as the amendments made under item 16 reflect the existing regulatory powers in Part 5-8 of HESA (which applies to tuition protection). Many registered higher education providers whom Part 5A applies to are also higher education providers within the meaning of HESA, and will have mirroring obligations across both the TEQSA Act and HESA as it relates to tuition protection and domestic students.

Item 15 triggers Parts 2 to 7 of the Regulatory Powers Act in respect to Part 5A of the TEQSA Act.

Division 5 - Enforcement in relation to tuition protection

Section 131A Monitoring powers

New section 131A triggers Part 2 of the Regulatory Powers Act in relation to the provisions of Part 5A relating to tuition protection that are subject to monitoring. The Note under subsection 131A(1) explains that Part 2 of the Regulatory Powers Act creates a framework for monitoring whether the TEQSA Act has been complied with, including powers of entry and inspection.

Information given in compliance or purported compliance with a provision under Part 5A is subject to monitoring under Part 2 of the Regulatory Powers Act. Part 2 of the Regulatory Powers Act creates a framework for monitoring whether the information is correct, which includes powers of entry and inspection.

Subsection 131A(3) provides that for the purposes of Part 2 of the Regulatory Powers Act:

•

each HESA investigator (as defined in HESA) and authorised officer (as appointed under section 94 of the TEQSA Act) is an 'authorised applicant';

•

each HESA investigator and authorised officer is an 'authorised person';

•

a judicial officer (as defined in HESA) is an 'issuing officer';

•

for an authorised person who is a HESA investigator, the Secretary is the relevant chief executive;

•

for an authorised person who is an authorised officer, the Chief Executive Officer of TEQSA is the relevant chief executive; and

•

each applicable court (as defined in HESA) is a relevant court.

An authorised person may be assisted by other persons in exercising powers or performing functions or duties under Part 2 of the Regulatory Powers Act in relation to the provisions of Part 5A.

Section 131B Investigation powers

New section 131B provides that Part 5A is subject to investigation under Part 3 of the Regulatory Powers Act if it is a civil penalty provision or an offence against the Crimes Act 1914 or the Criminal Code that relates to this Act. The Note under subsection 131B(1) explains that Part 3 of the Regulatory Powers Act creates a framework for investigating whether a provision has been contravened, including the powers of entry, search and seizure. The same persons as described above for new subsection 131A(3) are also applicable for the purposes of Part 3 of the Regulatory Powers Act.

An authorised person may be assisted by other persons in exercising powers or performing functions or duties under Part 3 of the Regulatory Powers Act in relation to the provisions of Part 5A.

Section 131C Civil penalty provisions

New section 131C provides that each civil penalty provision in Part 5A is enforceable under Part 4 of the Regulatory Powers Act. The Note under subsection 131C(1) explains that Part 4 of the Regulatory Powers Act allows a civil penalty provision to be enforced by obtaining an order for a person to pay a pecuniary penalty for the contravention of the provision.

New subsection 131C(2) provides that for the purposes of Part 4 of the Regulatory Powers Act as it applies in relation to Part 5A:

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the TP Director is an authorised applicant; and

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each applicable court is a relevant court.

Section 131D Infringement notices

New section 131D provides that a civil penalty provision under Part 5A is subject to an infringement notice under Part 5 of the Regulatory Powers Act. The Note under subsection 131D(1) explains that Part 5 of the Regulatory Powers Act creates a framework for using infringement notices in relation to provisions.

Subsection 131D(2) provides that for the purposes of Part 5 of the Regulatory Powers Act as it applies in relation to Part 5A, the TP Director is an infringement officer and is the relevant chief executive. This approach reflects the existing role of the TP Director under subsection 215-20(3) of HESA.

Section 131E Enforceable undertakings

New section 131E provides that undertakings made in relation to Part 5A are enforceable under Part 6 of the Regulatory Powers Act. The Note under subsection 131E(1) explains that Part 6 of the Regulatory Powers Act creates a framework for accepting and enforcing undertakings relating to compliance with provisions.

New subsection 131E(2) provides that for the purposes of Part 6 of the Regulatory Powers Act as it applies in relation to Part 5A:

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the Secretary is an authorised person; and

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each applicable court is a relevant court.

Section 131F Injunctions

New section 131F provides that Part 5A is enforceable under Part 7 of the Regulatory Powers Act. The Note under subsection 131F(1) explains that Part 7 of the Regulatory Powers Act creates a framework for using injunctions to enforce provisions.

Subsection 131F(2) provides that for the purposes of Part 7 of the Regulatory Powers Act as it applies in relation to Part 5A:

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the Secretary is an authorised person; and

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each applicable court is a relevant court.

Items 16-17 - Subsection 154L

Items 16-17 amend section 154L in relation to delegations by the Chief Executive Officer of TEQSA. Item 17 repeals and substitutes subsection 154L(2).

New subsection 154(L)(2) provides that the Chief Executive Officer may, in writing, delegate his or her powers and functions under the Regulatory Powers Act as it applies in relation to Part 5A of the TEQSA Act to a member of the staff of TEQSA who is an SES employee (or an acting SES employee) or an APS employee who holds or performs the duties of an Executive Level 2 position or an equivalent position. Before delegating any functions or powers under subsections 154L(1) and (2), the Chief Executive Officer must consider the matters at subsection 154L(3) to determine whether the delegate has the appropriate skills and qualifications to perform the function or power.

The Chief Executive Officer has new powers and functions under sections 131A and 131B as it relates to monitoring and investigation powers for the purposes of Part 5A. It is appropriate for the Chief Executive Officer to delegate his or her powers and functions to the level of SES employee (including acting SES employee) or an APS employee who holds or performs the duties of an Executive Level 2 position (or equivalent position). TEQSA is a small agency with limited SES employees which may require the Chief Executive Officer to also delegate these functions and powers to the level of APS employee at the Executive Level 2 position. In delegating any powers, the Chief Executive Officer must consider whether the delegate is sufficiently senior for the staff member to perform the function or exercise the power or whether the employee has appropriate qualifications or expertise to perform the function or duty or exercise the power.

The Chief Executive Officer's delegation power under subsection 154L(2) also mirrors subsection 215-40(2) of HESA, which also allows the Chief Executive Officer of TEQSA to delegate powers and functions under the Regulatory Powers Act as it applies in relation to HESA to the same level of officers. This means the same level of delegates under HESA and the TEQSA Act will be able to exercise powers in respect to monitoring and investigation powers relevant to tuition protection under both Acts.

Item 18 After the heading to Division 1 of Part 10

Item 18 inserts new heading, Subdivision A - Review of TEQSA decisions, after the heading to Division 1 of Part 10 as a result of Item 20.

Item 19 Section 183 (at the end of the heading)

Item 19 adds the words, 'of TEQSA' at the end of the heading at section 183 to clarify that section 183 only applies to reviewable decisions of TEQSA as a result of Item 20.

Item 20 At the end of Division 1 of Part 10

Item 20 adds at the end of Division 1 of Part 10, Subdivision B - Review of tuition protection decisions. Given reviewable decisions relating to tuition protection are not decisions made by TEQSA, it is appropriate to add a new subdivision to separately deal with the process of reviewable decisions relating to tuition protection under Part 5A. New sections 187B-187E reflect the approach in HESA in respect to similar reviewable decisions under that Act.

Section 187A Reviewable decisions relating to tuition protection

New section 187A sets out the reviewable decisions in relation to tuition protection and the decision maker for each of those decisions. The table under section 187A outline that the following are reviewable decisions:

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a decision by the Minister that Part 5A applies, or does not apply, to a registered higher education provider (under paragraphs 62B(2)(a) or (b));

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a decision that the TP Director is satisfied that there are one or more suitable replacement courses available for a student (paragraph 62J(2)(a)); and

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a decision that the TP Director is not satisfied that there is a suitable replacement course available for a student (paragraph 62J(2)(b)).

Section 187B Reviewer of decisions

New section 187B provides that the reviewer of a reviewable decision relating to tuition protection is the decision maker unless subsection 187B(2) applies. If the reviewable decision was made by a delegate of a decision maker and the decision is to be reconsidered by a delegate of the decision maker, then the delegate who reconsiders the decision must be a person who was not involved in making the decision and occupies a position that is senior to that occupied by a person involved in making the initial decision.

Section 187C Reviewer may reconsider reviewable decisions

New section 187C provides that the reviewer of a reviewable decision may reconsider the decision if the reviewer is satisfied that there is sufficient reason to do so at its own initiative. The reviewer may reconsider the decision even if an affected person has not made an application for reconsideration under section 187D or the decision has been confirmed, varied or set aside under section 187D and an application has been made to the Administrative Appeals Tribunal ( AAT ) under section 187E.

Following reconsideration, the decision maker must confirm, vary or set aside and substitute a new decision under subsection 187C(3). The decision on review takes effect on the day specified in the decision on review or if a day is not specified, on the day on which the decision on review was made. The reviewer must also give written notice of the decision on review to the person to whom the decision relates, within a reasonable period after the decision is made and must contain a statement of reasons.

The Note under subsection 187C(6) also explains that section 27A of the Administrative Appeals Tribunal Act 1975 requires the person to be notified of the person's review rights.

Section 187D Reconsideration of reviewable decisions on request

New section 187D allows a person whose interests are affected by a reviewable decision to request the reviewer to reconsider the decision. For example, a registered higher education provider affected by the Minister's decision that Part 5A does not apply to that provider under paragraph 62B(2)(b) may request that the Minister reconsider that decision.

The request must be made by written notice given to the reviewer within 28 days, or such longer period as the reviewer allows, after the day on which the person first received notice of the decision and set out the reasons for the request.

After receiving the request, the reviewer must reconsider the decision and confirm, vary or set aside and substitute a new decision under subsection 187D(4). However, the reviewer is not required to reconsider the decision if the decision was made under paragraph 62J(2)(b) and the student gave notice in writing, under paragraph 62J(8)(c) that the student would not seek reconsideration of the decision relating to the TP Director's decision that there is not a suitable replacement course for the student.

The decision on review takes effect on the day specified in the decision on review or if a day is not specified, on the day on which the decision on review was made. The reviewer must also give written notice of the decision on review to the person to whom the decision relates, within a reasonable period after the decision is made and must contain a statement of reasons.

The reviewer is taken to have confirmed the decision if the reviewer does not give notice of a decision to the person within 45 days after receiving the person's request. The Note under subsection 187D(9) also explains that section 27A of the Administrative Appeals Tribunal Act 1975 requires the person to be notified of the person's review rights.

Section 187E AAT review of reviewable decisions

New section 187E provides that a person whose interests are affected by a reviewable decision may make an application to the AAT for the review of a reviewable decision that has been confirmed, varied or set aside under sections 187C or 187D.

However, an application cannot be made to the AAT for the review of a decision made under paragraphs 62J(2)(a) or (b) about suitable replacement courses. In consideration of the Administrative Review Council's publication 'What decisions should be subject to merits review?', the TP Director's decision about whether there is a suitable replacement course for a student is not a decision that is suitable for external merits review. The decisions would have no appropriate or effective remedy through an external review process, because the decision would only operate for a limited period such that the effect of the decision is likely to be spent by the time of an external review. Due to the nature of provider defaults, it is important that the TP Director acts quickly and efficiently to either place the affected student in a suitable replacement course or provide a refund in order for the student to continue their studies with minimal disruption. If the TP Director decided that there was no suitable replacement course for the student, then the TP Director would provide a refund to the student. In practice, if the student became aware of a suitable replacement course that was not identified by the TP Director, then the TP Director would consider the option and place the student if suitable. The external merits review process would not provide any appropriate or effective remedy for the student, because the student is likely to have already received a refund or come to an agreed resolution with the TP Director.

Further, the reasons for the absence of external merits review for these decisions are because:

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clear parameters are set out at subsection 62J(3) about what the TP Director must have regard to in determining whether a course is a suitable replacement course for the student. This is intended to ensure that the first instance decision is reasonable and justifiable, in respect of which students may seek reconsideration of the decision through internal review processes under section 187D (as above);

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in practice, the TP Director will actively work with replacement providers and students to identify suitable replacement courses for a student. It is intended that, to the extent possible, a student would be provided with the option of several suitable replacement courses to choose between;

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when a provider defaults, it would be in the best interests for students to receive a resolution of the issue of whether or not there is a suitable replacement course as soon as practicable to allow them to continue their studies. Engaging in the potentially lengthy external merits review process may mean that students are unable to continue their studies until the matter is resolved;

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in respect of a decision that there is no suitable replacement course for a student - the student will receive a refund of their up-front payments for the affected units which means they should not be financially disadvantaged should there not be a suitable replacement course;

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further, legislation does not compel a replacement provider to enrol a student in a replacement course which means practically, if external merits review was available and considered there are potentially other suitable replacement courses, it cannot assist the students if no providers are prepared to deliver that course to the student.

Item 21 After paragraph 192(1)(c)

Item 21 inserts new paragraph (ca) after paragraph 192(1)(c) to allow TESQA to disclose higher education information (as defined in the TEQSA Act) to the TP Director for the purposes of administering laws relating to higher education. Given the TP Director will have a role in administering laws relating to higher education (under the TEQSA Act and HESA) in respect to tuition protection, it is appropriate that TEQSA is authorised under this new paragraph to disclose higher education information to the TP Director.

Item 22 After section 201

Section 201A Delegation by Secretary

Item 22 inserts new section 201A which provides the power for the Secretary to delegate (in writing) certain functions or powers under the TEQSA Act.

Subsection 201A(1) provides that the Secretary may delegate functions or powers under the TEQSA Act (other than paragraph 134(1)(i) or Division 5 of Part 7) to an APS employee who holds or performs the duties of an APS Level 6 position, or an equivalent or higher position in the Department. Relevantly, the Secretary will have new powers under section 26A (see Item 7 of Schedule 1 to the Bill) relating to the collection of information and documents related to tuition protection from registered higher education providers. Due to administrative and operational necessity, it is not practicable for the Secretary to personally collect information under section 26A, therefore it is intended that the Secretary would delegate these powers to appropriate APS employees in the Department having regard to the matters under subsection 201A(3).

Subsection 201A(2) provides that the Secretary may also delegate (in writing) powers and functions under the Regulatory Powers Act as it applies in relation to Part 5A, to an SES employee or an acting SES employee in the Department.

Before delegating a function or power, the Secretary must have regard to the matters at subsection 201A(3) to determine whether the delegation is appropriate, including having regard to whether the proposed delegate is sufficiently senior to perform the function or exercise the power or whether the person has appropriate qualifications or expertise to perform the function or duty or exercise the power. This criterion is a safeguard that ensures that any delegation is limited to categories of SES or APS employees that are appropriate to perform the function or exercise the power to be delegated.

In addition, the delegate must comply with any directions of the Secretary in exercising powers or performing functions under a delegation.

Section 201B Delegation by the Minister

Item 22 inserts new section 201B allows the Minister to delegate (in writing) all or any of the Minister's functions or powers under Part 5A to the Secretary of the Department. The Note under subsection 201B(1) explains that sections 34AA to 34A of the Acts Interpretation Act 1901 contain provisions relating to delegations. The Minister will have a new power under subsection 62B(2) to make a determination that Part 5A applies, or does not apply to a specified registered higher education provider.

The Secretary must comply with any directions of the Minister in exercising powers or performing functions under a delegation.

Item 23 After section 203

Item 23 inserts new section 203A which requires that before 1 July 2021, the Minister must commence a review of the operation of Part 5A (about tuition protection). This review is to be conducted at the same time as the review of the operation of Parts 5 and 5A of the ESOS Act, Parts 5-1A and 5-1B of HESA and Parts 5A and 5B of the VET Student Loans Act 2016 in respect to the operation of the tuition protection arrangements under those Acts. The Minister is required to cause a report to be prepared of the review and for the report to be tabled in each House of the Parliament within 15 sitting days after the completion of the preparation of the report.

Item 24 Application of amendments

Item 24 is an application provision which provides that the amendments made by Schedule 1 to the Bill apply in relation to provider defaults that occur on or after the commencement of the Bill (once enacted) (i.e. 1 January 2021).

Item 25 Saving provision

Item 25 is a saving provision which ensures that any instrument made under subsection 154L of the TEQSA Act that was in force immediately before the commencement of this Bill (once enacted) continues in force (and may be dealt with) as if it had been made under that section as amended by this Bill (once enacted).