Explanatory Memorandum
(Circulated by authority of the Minister for Education and Youth, the Hon Alan Tudge MP)Notes on Clauses
Clause 1 - Short title
This clause provides for the Act to be the Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Act 2021.
Clause 2 - Commencement
The table in subclause 2(1) sets out when the Act will commence. The table provides that the whole of this Act will commence the day the Act receives the Royal Assent.
Subclause 2(2) provides that any information in column 3 of the table at subclause 2(1) is not part of the Act, and information may be inserted into column 3 or information in it may be edited in any published version of the Act.
Clause 3 - Schedules
This clause provides that any legislation that is specified in a schedule is amended or repealed as set out in the applicable items in the schedule and that any other item in a schedule has effect according to its terms.
LIST OF ABBREVIATIONS
Act Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Act 2021
Bill Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Bill 2021
HELP Higher Education Loan Program
HESA Higher Education Support Act 2003
Schedule 1 - Extending the student loan fee exemption
Summary
Schedule 1 of the Bill contains amendments to section 137-10 of HESA to extend for a further period ending on 31 December 2021 the exemption from the loan fee associated with FEE-HELP loans for units of study provided by non Table-B providers with census dates within the eligible period. As a result, the requirement to pay the loan fee will not apply for FEE-HELP loans relating to units of study with census dates between 1 April 2020 and 31 December 2021, inclusive.
Providing an exemption from loan fees is intended to provide an incentive for undergraduate students accessing FEE-HELP loans to continue or commence study in 2021. This will in turn support higher education providers who have been financially affected by COVID-19.
In line with previous policy reducing the loan fee, following the end of the exemption period, from 1 January 2022 the amount of the FEE-HELP loan fee will be 20 per cent.
Detailed explanation
Higher Education Support Act 2003
Item 1 - Subparagraph 137-10(2)(b)(i)
Paragraph 137-10(2)(b) sets out the amount of a person's FEE-HELP debt for loans relating to FEE-HELP assistance for units of study that are part of an undergraduate course of study provided by non Table-B higher education providers. Currently, the amount of a person's FEE-HELP debt is:
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- for units of study with a census date between 1 April 2020 and 30 June 2021 - the amount the loan (effectively, this represents an exemption from the requirement to pay a loan fee);
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- for units of study with a census date on or after 1 July 2021 - an amount equal to 120 per cent of the loan (that is, a 20 per cent loan fee);
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- otherwise, an amount equal to 125 per cent of the loan (a 25per cent loan fee).
Item 1 amends subparagraph 137-10(2)(b)(i) to replace the date of "30 June 2021" with the date of "31 December 2021".
This change has the effect of extending the exemption from the loan fee to units of study with census dates between 1 July 2021 and 31 December 2021.
Item 2 - Subparagraph 137-10(2)(b)(ia)
In light of the amendment to subparagraph 137-10(2)(b)(i), item 2 amends subparagraph 137-10(2)(b)(ia) to replace the date of "1 July 2021" with the date of "1 January 2022".
This means that, for units of study that are part of an undergraduate course of study provided by higher education providers (other than Table B providers) with a census date on or after 1 January 2022, the amount of a person's FEE-HELP debt will be 120 per cent of the loan (effectively a 20 per cent loan fee).