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House of Representatives

Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011

Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Act 2011

Explanatory Memorandum

Circulated By Authority of the Minister for Tertiary Education, Skills, Jobs and Workplace Relations

GENERAL OUTLINE

The main purpose of this Bill is to implement a demand driven system for funding undergraduate places at higher education providers listed in Table A of the Higher Education Support Act 2003 (HESA). The higher education providers are mainly public universities.

From 2012, universities will be able to determine the number of students that they choose to admit to undergraduate courses, with the exception of medical courses.

Except in specific circumstances, the Government will no longer regulate this aspect of a university's operations and the Commonwealth Grant Scheme funding for these places will not be limited.

In this Bill:

Schedule 1 amends the Commonwealth Grant Scheme provisions in Part 2-2 of HESA and makes amendments to other provisions of HESA to remove the annual caps on Commonwealth Grant Scheme funding and to change the way in which higher education providers will be eligible for funding under Part 2-2 of HESA.

Schedule 2 amends HESA to abolish the student learning entitlement (SLE) which currently limits a student to the equivalent of approximately seven years full-time study as a Commonwealth supported student. With the removal of the SLE, amendments to HESA are required to ensure that people are able to request a refund of their student contribution amount and reduction in HECS-HELP debts under special circumstances.

Schedule 3 makes other amendments to introduce requirements for Table A and Table B providers to have institutional policies in place to promote and protect free intellectual inquiry in learning, teaching and research. As part of removing the restrictions on funding for undergraduate places, HESA is being amended to require Table A and Table B providers to enter into a mission based compact with the Government. The compacts provide for Commonwealth oversight of the teaching and research missions of Table A and Table B providers. It is intended that compacts will set out how the missions of these providers align with the Commonwealth's goals for higher education, research, research training and innovation.

Application, savings and transitional provisions will:

•: provide 1 January 2012 as the principal date from which providers and the Commonwealth will be subject to the new provisions (although some provisions will commence on Royal Assent so that implementation steps can be carried out in advance)
•: provide, in relation to the abolition of SLE, that the fact that a person has used up some or all of his or her SLE before the amendments commence will have no bearing whatsoever on whether he or she is able to be a Commonwealth supported student under the new (ie as amended) provisions
•: maintain rights and obligations accrued and incurred under the old provisions, including with respect to reviewable decisions under HESA.

FINANCIAL IMPACT STATEMENT

The cost of the demand driven funding system for undergraduate student places from 2010 to 2015 is estimated to be $3.97 billion.

NOTES ON CLAUSES

Clause 1 - Short title

This clause provides for the Bill, when it is enacted, to be cited as the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Act 2011.

Clause 2 - Commencement

Subclause 2(1) inserts a three column table setting out commencement information for various provisions of the Bill. Each provision of the Bill specified in column 1 of the table commences (or is taken to have commenced) in accordance with column 2 of the table and any other statement in column 2 has effect according to its terms.

The table has the effect of providing for:

-: sections 1 to 3, Schedule 1, Schedule 3 and any provisions in the Bill not otherwise covered by the table to commence on Royal Assent; and
-: Schedule 2 to commence on 1 January 2012.

A Note makes it clear that these commencement times will not be amended by any later amendments of the Bill (once enacted).

Subclause 2(2) provides that information in column 3 of the table does not form part of the Bill. Information in column 3 may be inserted or varied in any published version of the Bill (once enacted).

Clause 3 - Schedule(s)

Provides that each Act 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.

For ease of description, this explanatory memorandum uses the following abbreviations:

•: ' HESA ' means the Higher Education Support Act 2003.
•: ' SLE ' means Student Learning Entitlement as defined in Schedule 1 and section 73-1 of HESA.
•: ' Table A providers' means those higher education providers listed at section 16-15 of HESA.
•: ' Table B providers' means those higher education providers listed at section 16-20 of HESA.

Schedule 1 - Amendments relating to demand driven funding system

Summary

Schedule 1 of the Bill gives effect to the Australian Government's announcement that it would implement a demand driven funding system for undergraduate student places at providers listed in Table A of HESA. The majority of these providers are public universities.

For Table A providers there will be a distinction between designated courses of study and non-designated courses of study. The Minister will not allocate places for non-designated courses of study, but may do so for designated courses of study. This will affect the amount of Commonwealth Grant Scheme funding that Table A providers will be eligible to receive. Designated courses of study will be non-research postgraduate courses of study, courses of study in medicine and courses of study that the Minister specifies in a legislative instrument.

The Minister's ability to specify a course of study as a designated course of study allows the Minister to allocate student places for these courses if required. For example, it may become apparent that there is insufficient availability of the clinical placements necessary to ensure an appropriate level of skill among people graduating in a particular profession. Any specification of such courses by the Minister would be subject to Parliamentary scrutiny.

The requirement under section 30-1 of HESA for providers to enter into a funding agreement with the Commonwealth under section 30-25 of HESA in order to be eligible to receive Commonwealth Grant Scheme funding will not change, but some of the provisions of HESA relating to agreements are being amended.

There will now be the option for funding agreements to specify a maximum basic grant amount payable to a provider for a grant year for both designated and non-designated courses of study. The maximum basic grant amount for designated courses of study for a Table A provider must not be less than the basic grant amount worked out based on the provider's allocated places in those designated courses of study. The maximum basic grant amount for non-designated courses of study must not be less than the maximum basic grant amount specified in the provider's funding agreement for the previous year or, if there was no amount specified, must not be less than the amount worked out under new paragraph 33-5(5)(a) for such courses for the previous year.

Funding agreements for non-Table A providers may specify a maximum basic grant amount for a grant year, which must not be less than the amount worked under new subsection 33-5(7).

Higher education providers eligible for a Commonwealth Grant Scheme grant will no longer be paid on the basis of their allocated Commonwealth supported student places which they provide, subject to any specified funding limits.

Background

Currently, HESA distinguishes between 'Commonwealth supported students' and other types of students who are mainly full fee-paying students with private higher education providers or postgraduate students at public universities. The Commonwealth pays its contribution to a higher education provider for a Commonwealth supported student through the Commonwealth Grant Scheme under Part 2-2 of HESA. Commonwealth supported students also make a contribution and may be eligible for a loan through HECS-HELP to assist them to pay their student contribution amount.

Currently, the majority of Commonwealth supported student places are allocated to Table A providers, most of which are public universities (see section 16-15 of HESA). Commonwealth supported places may only be allocated to non-Table A providers where those providers are specified in the Commonwealth Grant Scheme Guidelines made under section 238-10 of HESA as being eligible to receive such grants and the allocation is in respect of national priorities (see sections 30-10 and 30-20). There are limited numbers of such Commonwealth supported places allocated to non-Table A providers.

There is currently a maximum amount of Commonwealth Grant Scheme expenditure for each calendar year (see section 30-5 of HESA). Under section 30-10 of HESA, the Minister allocates Commonwealth supported places for funding clusters (see section 30-15) to eligible providers. These allocations are specified in funding agreements between the Commonwealth and relevant higher education providers.

Section 33-5 of HESA sets out how the basic grant amount is calculated for each provider. This is based, in part, on the allocated number of Commonwealth supported places in each funding cluster multiplied by the Commonwealth contribution rate for a place in that funding cluster. Section 33-25 provides for adjustments to the basic grant amount, based on a comparison of allocated places for the previous year and the value of actual places provided in the previous year.

In practice, higher education providers may provide more places than they have been allocated (or what is referred to as 'target student load'). In these cases, the amount paid to a provider for a year is the total amount for its target number of student places, plus an amount for the over enrolments for the previous year.

The Higher Education Support Amendment (2010 Budget Measures) Act 2010 amended section 30-5 of HESA to provide for changes to the maximum grant amounts for the Commonwealth Grant Scheme for 2010 and 2011 to take account of movements in indexation and transitional arrangements for over enrolments for 2010 and 2011. These transitional arrangements for 2010 and 2011 lifted the cap on over enrolments from 5 per cent to 10 per cent more than the amount for its target load.

Detailed explanation

Part 1 - Amendments

Higher Education Support Act 2003

Item 1 - Section 8-1

Section 8-1 of HESA provides an overview of the content of Chapter 2 of HESA (Grants for higher education assistance etc.).

Among other things, section 8-1 provides that one of the three kinds of Commonwealth grants to higher education providers under Chapter 2 of HESA is grants under Part 2-2 of HESA (the Commonwealth Grant Scheme) and that "Amounts of grants are based largely on the number of Commonwealth supported places that the Minister allocates to each provider."

The move to a demand driven system means that Commonwealth Grant Scheme grants under Part 2-2 would no longer need to be tied to the allocation of Commonwealth supported places to higher education providers . Item 1 therefore amends section 8-1 to remove this reference to grants being based largely upon Ministerial allocations and inserts the following words in their place: "These grants are paid in relation to Commonwealth supported places".

Item 2 - Section 27-1

Section 27-1 of HESA provides an overview of the content of Part 2-2 of HESA (Commonwealth Grant Scheme).

Among other things, section 27-1 provides that "Amounts of grants are based largely on the number of Commonwealth supported places that the Minister allocates to each provider."

The move to a demand driven system means that Commonwealth Grant Scheme grants under Part 2-2 would no longer need to be tied to the allocation of Commonwealth supported places to higher education providers . Item 2 therefore amends section 27-1 to remove this reference to grants being based largely upon Ministerial allocations and inserts the following words in their place: "These grants are paid in relation to Commonwealth supported places."

Item 3 - Paragraphs 30-1(1)(a), (b) and (c)

Paragraphs (a), (b) and (c) of subsection 30-1(1) of HESA set out eligibility criteria for Commonwealth Grant Scheme funding to be payable for a year to higher education providers under Part 2-2. Currently, these criteria are as follows:

-: Table A providers: the Minister has allocated a number of Commonwealth supported places to the provider for the year under section 30-10 and the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year.
-: Non-Table A providers: the provider is one that the Commonwealth Grant Scheme Guidelines specify can be paid grants under Part 2-2, the Minister has allocated a number of Commonwealth supported places to the provider for the year under section 30-10, the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year and the grant relates to national priorities (see subsection 30-1(2) and section 30-20).

Item 3 repeals these paragraphs and substitutes in their place paragraphs (a) and (b).

The effect of new paragraphs 30-1(1)(a) and (b) is that a higher education provider will be eligible for Commonwealth Grant Scheme funding as follows:

-: Table A providers: the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year (new paragraph 30-1(1)(a)).
-: Non-Table A providers: the provider is one that the Commonwealth Grant Scheme Guidelines specify can be paid grants under Part 2-2, the Minister has allocated a number of Commonwealth supported places to the provider for the year under section 30-10 and the provider has entered into a section 30-25 funding agreement with the Commonwealth in respect of the year (new paragraph 30-1(1)(b)).

Item 4 - Section 30-5

Section 30-5 of HESA requires the Minister to ensure that the total amount of Commonwealth Grant Scheme payments that are payable to higher education providers under Part 2-2 in particular years does not exceed the maximum specified in section 30-5 for the year in question (maximum amounts are specified for the years 2005 to 2011).

Item 4 repeals section 30-5, which will be redundant with the commencement of the demand driven funding system for undergraduate student places.

Item 5 - Subsection 30-10(1)

Under subsection 30-10(1) of HESA, the Minister may allocate a specified number of Commonwealth supported places to higher education providers before the commencement of a year.

Item 5 repeals and substitutes subsection 30-10(1). The new subsection 30-10(1) allows the Minister to allocate Commonwealth supported places before the commencement of a (calendar) year to the following:

-: Table A providers in respect of designated courses of study (see Item 8 of Schedule 1 for the meaning of designated courses of study)
-: those higher education providers referred to in subparagraph 30-10(1)(b)(i) (see Item 3 of Schedule 1- the provider is one that the Commonwealth Grant Scheme Guidelines says can be paid grants under Part 2-2)).

A note explains that the Minister does not allocate places to Table A providers in respect of non-designated courses of study (this will be the case on the commencement of the demand driven system). This provision will operate as the current section 30-10 does but only in relation to designated courses of study. These courses of study are non-research postgraduate courses of study, courses of study in medicine and courses of study that the Minister will have the ability to specify in legislative instruments. Any specification of the latter courses is subject to Parliamentary scrutiny and is therefore not a reviewable decision.

Items 6 and 7 - Subsection 30-10(3) and At the end of section 30-10

Section 30-10 of HESA concerns the allocation of Commonwealth supported places by the Minister. Subsection 30-10(3) currently provides that the allocation may, in addition to the matters specified in subsections 30-10(1), (2) and (2A), specify the number of places with a regional loading, a medical student loading, an enabling loading and a transitional loading.

Item 6 repeals subsection 30-10(3). Other amendments made by Schedule 1 of this Bill provide for calculations in relation to loadings to be worked out under the Commonwealth Grant Scheme Guidelines for a provider for a year (see the amendments to section 33-1 made by Item 11).

Item 7 inserts new subsection 30-10(5) which clarifies that if the allocation made under subsection 30-10(1) (to allocate a specified number of Commonwealth supported places to a Table A provider in relation to designated course of study or to a non-Table A higher education provider) is made in writing, the allocation is not a legislative instrument.

Subsection 30-10(5) is included to assist readers, as the allocation is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. This subsection is merely declaratory of the law.

Item 8 - After section 30-10

Item 8 inserts a new section 30-12 into HESA which provides for the meaning of designated courses of study. This term means, for Table A providers:

-: non-research postgraduate courses of study
-: courses of study in medicine
-: courses of study that are specified in a legislative instrument made by the Minister.

Under the amendments made by Item 5, the Minister will be allocating places for designated courses of study ( including non-research postgraduate courses of study and courses of study in medicine) and Table A providers will be eligible to receive Commonwealth Grant Scheme funding with respect to such allocations of places. In principle, this will be a continuation of the current approach to dealing with these types of courses of study, although the methodology for calculating the basic grant amount for a provider is changed by other amendments - see Item 14.

In addition, the Minister will have the ability to specify, by legislative instrument, courses of study as designated courses of study (ie courses of study for which the Minister would be able to allocate places). This will provide the Minister with the ability to place restraints on the kinds of courses for which providers can receive funding under Part 2-2 of HESA.

This could, for example, be useful in the event that there is an excessive supply of a particular type of graduate, or if there is insufficient availability of the clinical placements necessary to ensure an appropriate level of skill among people graduating in a particular profession.

Item 9 - Before paragraph 30-25(3)(a)

Section 30-25 of HESA provides that the Minister may, on behalf of the Commonwealth, enter into funding agreements with higher education providers relating to Commonwealth Grant Scheme grants under Part 2-2 of HESA.

It is these funding agreements that specify the number of Commonwealth supported places allocated by the Minister. Currently, subsection 30-25(3) provides that the agreements may specify the minimum number of Commonwealth supported places that a provider must provide in the relevant grant year, or the maximum number of Commonwealth supported places the provider may provide in the year, or both - with respect to places in the following:

-: undergraduate courses of study
-: non-research postgraduate courses of study
-: courses of study in medical programs
-: courses of study in enabling programs.

Item 9 inserts a new paragraph 30-25(3)(aa) before paragraph 30-25(3)(a), which provides that the funding agreement may specify the number of Commonwealth supported places allocated to the provider under section 30-10 for the relevant grant year (see Item 5).

Maximum basic grant amounts

Items 10 - At the end of Subdivision 30-C and 31 - Subclause 1(1) of Schedule 1

Subdivision 30-C of HESA concerns funding agreements for Commonwealth Grant Scheme grants under Part 2-2 of HESA.

Item 31 inserts the definition of maximum basic grant amount into the dictionary at subclause 1(1) of Schedule 1 of HESA . Maximum basic grant amount has the meaning given in new subsection 30-27(1) of HESA. That is, the amount, if any, specified in the funding agreement with a provider for a year as the maximum basic grant amount for that provider for that year. This capacity to specify maximum basic grant amounts for each provider for each year will allow the Commonwealth the flexibility to operate on an institutional basis.

Item 10 inserts new section 30-27 at the end of Subdivision 30-C of HESA.

New section 30-27 allows the funding agreement to specify maximum basic grant amounts payable to higher education providers.

New subsection 30-27(1) provides that funding agreements may specify maximum basic grant amounts payable for a grant year for Table A providers (for designated courses of study (see Item 8) and for non-designated courses of study) and for non-Table A providers (see Item 14).

New subsection 30-27(2) provides that the maximum basic grant amount for Table A providers for designated courses of study must not be less than the amount calculated under subsection 33-5(4).

New subsection 30-27(3) provides that the maximum basic grant amount for Table A providers for non-designated courses of study for a grant year must not be less than the following:

-: if there was a maximum basic grant amount specified in the provider's funding agreement for the previous year, then this amount; or
-: if there was no maximum basic grant amount specified in the provider's funding agreement for the previous year, then as calculated under paragraph 33-5(5)(a) for the preceding year (see Item 14).

New subsection 30-27(4) provides that the maximum basic grant amount for non-Table A providers must not be less than the amount calculated under subsection

33-5(8) (see Item 14).

Items 11 and 12- Paragraphs 33-1(1)(b) and (c)

Section 33-1 of HESA sets out how the amount of Commonwealth Grant Scheme funding payable to a higher education provider under Part 2-2 is calculated which, currently, is as follows:

-: the basic grant amount is calculated under Subdivision 33-B (Basic grant amounts) (per paragraph 33-1(1)(a))
-: if applicable, the basic grant amount is adjusted under Subdivision 33-C (Adjustments) (per paragraph 33-1(1)(b))
-: if applicable for the 2011 year and beyond, the performance funding grant amount is added ((per paragraph 33-1(1)(c)).

Item 11 repeals paragraph 33-1(1)(b) and Item 12 repeals paragraph 33-1(1)(c) and substitutes a new paragraph 33-1(1)(b). The effect of this is that the following amounts to be calculated under the Commonwealth Grant Scheme Guidelines will be added to the basic grant amount calculated under Subdivision 33-B for the relevant year (if applicable to the provider):

-: regional loading
-: medical student loading
-: enabling loading
-: transitional loading
-: performance funding grant amount.

Item 13 - Subsection 33-1(1A)

Subsection 33-1(1A) provides that the performance funding grant amount for a higher education provider for a year, if any is payable, is worked out under the Commonwealth Grant Scheme Guidelines.

Item 13 repeals subsection 33-1(1A) of HESA. This is a consequential amendment to Items 11 and 12 which includes the performance funding grant amount in paragraph 33-1(1)(a) as one of the things that is to be added to a provider's basic grant amount in working out the grant payable to the provider under Part 2-2 of HESA.

Item 14 - Section 33-5

Section 33-1 of HESA provides that the amount payable to a provider under Part 2-2 is to be worked out by reference to the basic grant amount for the provider and other matters.

Currently, section 33-5 of HESA sets out how the basic grant amount is calculated for a provider for a year. This is done by looking at the Ministerial allocation of places to a higher education provider for each funding cluster (under section 30-10) and multiplying the number of Commonwealth supported places allocated by the Commonwealth contribution amount for a place in each relevant funding cluster. If the Ministerial allocation of places has particular loadings attached to any of those places, then amounts of regional loading, medical student loading, enabling loading and transitional loading as calculated under the Commonwealth Grant Scheme Guidelines are added to the basic grant amount.

References to loadings to are to be moved to paragraph 33-1(1)(b) - see Items 11 and 12 .

Item 14 repeals section 33-5 and substitutes a new section 33-5.

New subsection 33-5(1) provides that section 33-5 will set out how to calculate the basic grant amount for a provider for a year.

Basic grant amount for Table A providers

New subsection 33-5(2) provides that the basic grant amount for a Table A provider is the sum of the amounts for designated courses of study (as calculated under new subsection 33-5(3)) and the amounts for non-designated courses of study (as calculated under new subsections 33-5(5) and (6)).

Table A providers - amounts for designated courses of study

New subsection 33-5(3) provides that the basic grant amount for designated courses of study will be the lower of the following amounts:

-

the sum total of the amounts calculated for each funding cluster in which the provider provided places in designated courses of study - which is to be done by multiplying the number of Commonwealth supported places provided in the designated courses of study in the funding cluster by the Commonwealth contribution amount for a place in the funding cluster (see section 33-10) (new paragraph 33-5(3)(a)); and

-

either:

•: the maximum basic grant amount specified in the provider's funding agreement for designated courses of study (if one is specified in the funding agreement) (see section 30-25) (new subparagraph 33-5(3)(b)(i)); or
•: if the provider's funding agreement does not specify the maximum basic grant amount for designated courses of study - the amount calculated under new subsection 33-5(4) (new paragraph 33-5(3)(b)(ii)).

New subsection 33-5(4) sets out how to calculate the amount in new paragraph 33-5(3)(b)(ii) - in other words, if the Table A provider's funding agreement does not specify the maximum basic grant amount for designated courses of study. If the funding agreement does not do so, then the amount is the total sum calculated by looking at the Ministerial allocation of places to the provider for each funding cluster (under section 30-10) and multiplying the number of Commonwealth supported places allocated by the Commonwealth contribution amount for a place in the relevant funding cluster.

Table A providers - amounts for non-designated courses of study

New subsection 33-5(5) provides that, subject to new subsection 33-5(6), the amounts for non-designated courses of study will be the lower of the following two amounts:

-: the sum total of the amounts calculated for each funding cluster in which the provider provided places in non-designated courses of study - which is to be done by multiplying the number of Commonwealth supported places provided in the non-designated courses of study in the funding cluster by the Commonwealth contribution amount for a place in the relevant funding cluster (see section 33-10) (new paragraph 33-5(5)(a)); and
-: the maximum basic grant amount specified in the provider's funding agreement for non-designated courses of study (see section 30-25) (new subparagraph 33-5(5)(b)).

New subsection 33-5(6) provides that, if the funding agreement does not specify the maximum basic grant amount for non-designated courses of study, then the amount is the amount calculated under new paragraph 33-5(5)(a).

Basic grant amounts for non-Table A providers

The basic grant amount for non-Table A providers is to be calculated as set out in new subsection 33-5(7). For non-Table A providers, the basic grant amount for a year will be the lesser of the following:

-

the sum total of the amounts calculated for each funding cluster in which the provider provided places - which is to be done by multiplying the number of Commonwealth supported places provided in that funding cluster by the Commonwealth contribution amount for a place in the funding cluster (see section 33-10) (new paragraph 33-5(7)(a)); and

-

either:

•: the maximum basic grant amount specified in the provider's funding agreement (if one is specified in the funding agreement) (see section 30-25) (new subparagraph 33-5(7)(b)(i)); or
•: if the provider's funding agreement does not specify the maximum basic grant amount - the amount calculated under new subsection 33-5(8) (new paragraph 33-5(7)(b)(ii)).

New subsection 33-5(8) sets out how to calculate the amount in new paragraph

33-5(7)(b)(ii) - in other words, if the non-Table A provider's funding agreement does not specify the maximum basic grant amount. If the funding agreement does not do so, then the amount is the total sum calculated by looking at the Ministerial allocation of places to the provider for each funding cluster (under section 30-10) and multiplying the number of Commonwealth supported places allocated by the Commonwealth contribution amount for a place in the funding cluster.

Items 15 and 18 - Subdivision 33-C (heading) and Before section 33-37

Item 15 repeals the heading to Subdivision 33-C (" Adjustments "). This is a consequential amendment to Item 16 ( which repeals section 33-25) and Item 18, which inserts the heading "Adjustments" before section 33-37. Sections 33-30 and 33-35 become part of subdivision 33B as they are necessary for the calculation of basic grant amounts. The heading is being moved to above the only remaining section in Subdivision 33-C of Part 2-2 that deals with adjustments (section 33-37).

Item 16 - Section 33-25

Section 33-25 of HESA provides for adjustments to basic grant amounts . Item 16 repeals section 33-25.

A transitional amendment deals with the effect of the amendments to Division 33 of HESA made by this Schedule (see Item 36).

Currently, section 33-30 relates to calculating the total number of Commonwealth supported places provided by a provider. With the changes to allocation processes this is no longer necessary but providing for how the number of Commonwealth supported places provided in a funding cluster by a provider is still relevant as reflected in the amendments to section 33-30.

Item 17 - At the end of section 33-30

Section 33-30 sets out how to calculate the number of Commonwealth supported places that a higher education provider has provided.

The method statement in this provision is still required for other provisions in HESA.

The new provisions for calculating basic grant amounts also depend on places provided rather than places allocated as applied prior to the amendments.

Item 17 inserts a new subsection 33-30(3) which tells the reader how to work out the number of Commonwealth supported places that a higher education provider has provided for designated courses of study in a funding cluster; and the number of places that the provider has provided for non-designated courses of study in a funding cluster.

Subsection 33-30(3) explains that to work out the number of Commonwealth supported places that a higher education provider has provided in an item of column 1 of the table to the subsection, apply the method statement in subsection 33-30(1) to the units of study mentioned in column 2 of that item.

For example, in relation to item 2 of the table, to work out the number of Commonwealth supported places provided in designated courses of study in a funding cluster, apply the method statement in subsection 33-30(1) to units provided by the provider in the funding cluster in designated courses of study.

This is a consequential amendment required because of the repeal of section 33-25 (and specifically 33-25(5) which set out how to calculate a provider's corrected basic grant amount)) made by Item 16.

Items 19, 20 and 21 - Subsection 33-37(2) (formula), Subsection 33-37(2) (definition of total places allocated) and Subsection 33-37(2)

Subsection 33-37(1) of HESA provides that the amount of a higher education provider's basic grant amount for a grant year is to be reduced by an adjustment if the provider breaches a condition under section 19-37 (requiring membership of certain organisations, or requiring the payment of certain amounts). The adjustment in such cases is calculated using the adjustment formula specified in subsection 33-37(2).

Item 19 repeals and substitutes the adjustment formula in subsection 33-37(2). The new adjustment formula is the reduction amount (as specified in subsection 33-37(2)) multiplied by the total places provided by the provider . Item 20 repeals the definition of total places allocated and Item 21 inserts a new definition of total places provided to mean the total number of Commonwealth supported places that the higher education provider has provided for the grant year in question.

Items 22, 23 and 24 - Subsection 33-40(1), Subsection 33-40(3) and after Subsection 33-40(3)

Subsection 33-40(1) of HESA provides that the Minister may make determinations that an advance payment is to be made to a higher education provider for a year in relation to such expenditure of the provider as specified in the determination.

Item 22 amends subsection 33-40(1) by omitting the words "may determine" and substituting with the words "may, if an amount has been specified under subsection 33-40(3A), determine". The effect of this amendment is to clarify that the Minister may only specify an amount that can be advanced if an amount setting out the amount of the total amount of advances in respect of a year has been specified by the Minister under subsection 33-40(3A).

Subsection 33-40(3) provides that the total amount of such advances must not be more than the amount "set out in section 30-5 [which specifies the total amounts of grants payable under Part 2-2 for the years 2005 to 2011 and which is to be repealed - see Item 4] in respect of the following year" . Item 23 amends subsection 33-40(3) by omitting these words and inserting in their place the words "specified by the Minister under subsection (3A)".

Item 24 inserts a new subsection 33-40(3A) which provides that the Minister may, by legislative instrument, specify an amount for the purposes of subsection 33-40(3). In other words, the total amounts of advances of Part 2-2 grant monies that can be paid to providers for a year cannot exceed the amount the Minister specifies by way of a legislative instrument.

Item 25 - Paragraph 36-10(1)(a)

Subsection 36-10(1) of HESA provides that a higher education provider must not advise someone that he or she is a Commonwealth supported student unless all of the criteria in paragraphs 36-10(1)(a) to (e) are satisfied.

Item 25 amends paragraph 36-10(1)(a) by omitting the criterion that a number of Commonwealth supported places has been allocated to the provider under section 30-10 and replacing it with a new criterion that the provider has entered into a funding agreement under section 30-25.

Item 26 - Subsection 41-10(1) (table item 12)

The table in subsection 41-10(1) of HESA sets out which higher education providers are eligible for certain types of grants under Part 2-3 of HESA. Table item 12 currently provides that higher education providers to which Commonwealth supported places have been allocated for any year are eligible to receive grants to assist them with the transitional costs of changes to maximum student contribution amounts.

Item 26 amends table item 12 so that higher education providers that have provided Commonwealth-supported places for any year are eligible for these grants (ie the reference to allocated is to be replaced with a reference to provided). This is consequential on the earlier amendments made by this Schedule removing the requirement for the Minister to allocate places for non-designated courses for Table A providers.

Item 27 - Subparagraph 46-13(c)(ii)

Section 46-13 of HESA sets out eligibility criteria in order for students to receive directly paid standard Commonwealth scholarships. One of those criteria is the criterion in subparagraph 46-13(c)(ii) that the student is a student of a non-Table A higher education provider to which subparagraph 30-1(1)(a)(ii) applies. Subparagraph 30-1(1)(a)(ii) concerns the eligibility for grants under Part 2-2 of non-Table A providers that are specified in the Commonwealth Grant Scheme Guidelines as higher education providers that can be paid grants under Part 2-2.

Item 27 is a consequential amendment to Item 3 which repeals paragraphs 30-1(1)(a), (b) and (c) and replaces them with new paragraphs 30-1(1)(a) and (b) . Item 27 omits the reference to "subparagraph 30-1(1)(a)(ii)" and replaces it with a reference to "subparagraph 30-1(1)(b)(i)". The effect of this is that the reference will be to providers that are specified in the Commonwealth Grant Scheme Guidelines as a higher education provider that can be paid grants under Part 2-2.

Item 28 - Subsection 46-15(1)

Section 46-15 of HESA sets out eligibility criteria for higher education providers to receive grants for certain scholarships. One of these criteria is the criterion in subsection 46-15(1) that Table A providers and other higher education providers to which subparagraph 30-1(1)(a)(ii) applies are eligible to receive a grant from the Commonwealth to pay indirectly paid standard Commonwealth scholarships to their students. Subparagraph 30-1(1)(a)(ii) concerns the eligibility for grants under Part 2-2 of non-Table A providers that are specified in the Commonwealth Grant Scheme Guidelines as higher education providers that can be paid grants under Part 2-2.

Item 28 is a consequential amendment to Item 3 which repeals paragraphs 30-1(1)(a), (b) and (c) and replaces them with new paragraphs 30-1(1)(a) and (b) . Item 28 omits the reference to "subparagraph 30-1(1)(a)(ii)" and replaces it with a reference to "subparagraph 30-1(1)(b)(i)". The effect of this is that the reference will be to providers that are specified in the Commonwealth Grant Scheme Guidelines as higher education providers that can be paid grants under Part 2-2.

Items 29-32 make various amendments to the dictionary in Schedule 1 of HESA which are necessary to give effect to other amendments made by this Schedule.

Item 29 - Schedule 1, subclause 1(1) (definition of corrected basic amount)

Item 29 repeals the definition of corrected basic amount in the dictionary at subclause 1(1) of Schedule 1 of HESA. This definition is no longer required because the former methodology for adjustments will (except as provided for by Item 36) no longer apply.

Item 30 - Schedule 1, subclause 1(1)

Item 30 inserts a definition of designated courses of study into the dictionary at subclause 1(1) of Schedule 1 of HESA. This definition provides that the meaning is the same as in new subsection 30-12(1) (see Item 8).

Item 31 - Schedule 1, subclause 1(1)

Item 31 inserts the definition of maximum basic grant amount into the dictionary at subclause 1(1) of Schedule 1 of HESA. This definition provides that the meaning is the same as in subsection 30-27(1) of HESA (see Item 10).

Item 32 - Schedule 1, subclause 1(1)

Item 32 inserts the definition of non-designated courses of study into the dictionary at subclause 1(1) of Schedule 1 of HESA - which means courses of study that are not designated courses of study ( see Items 8 and 30).

Part 2-Application, savings and transitional provisions

Item 33 - Definitions

Item 33 provides that in Part 1 of Schedule 1:

-: commencement means the commencement of Schedule 1
-: new Act means HESA as it will be in force on and after the commencement of Schedule 1
-: old Act means HESA as it was in force immediately before the commencement of Schedule 1.

Item 34 - Application of amendments - general

Item 34 makes it clear that the amendments made by Schedule 1 apply to the year commencing on 1 January 2012 and to subsequent years.

Item 35 - Transitional - maximum basic grant amount for non-designated courses of study for Table A providers for 2012

Item 35 is a transitional provision which provides that for the purposes of working out the amount mentioned in paragraph 30-27(3)(b) of the new Act (Table A providers maximum basic grant amounts for non-designated courses of study) for the year 2012, the amount is to be worked out as if paragraph 33-5(5)(a) of the new Act (Table A providers amount of non-designated courses of study) applied to the year 2011. The effect of this provision is to clarify how a Table A provider's maximum basic grant amount for the grant year 2012 will be calculated.

Item 36 - Transitional - adjustment of basic grant amount for 2012

Currently, Division 33 of HESA contains various provisions relating to when and how adjustments are to be made to a provider's basic grant amount under Part 2-2 of HESA.

Item 36 provides that, despite the amendments made by Items 11, 15, 16 and 18, a higher education provider's basic grant amount for the year 2012 (as worked out under the new Act) is to be adjusted as if the amendments had not been made. (In other words, the adjustment provisions in Division 33 of the old Act will apply to 2012.)

A note at the end Item 36 has been inserted to assist the reader to clarify that adjustments of basic grant amounts for 2011 or an earlier year are not affected by the amendments made by Schedule 1.

Schedule 2 - Amendments relating to Student Learning Entitlement

Summary

Schedule 2 of the Bill will repeal Part 3-1 of HESA and amend other provisions of the Act to remove Student Learning Entitlement (SLE) from HESA. These amendments will have the result that higher education students will not have a limit placed on how much study they can undertake as a Commonwealth supported student.

Savings and transitional provisions related to the abolition of SLE will make clear that the fact that a person has used some or all of his or her SLE will have no impact whatsoever on his or her capacity to be a Commonwealth supported student under HESA as amended.

Savings and transitional provisions will preserve the operation of the former provisions of HESA, including any rights and obligations in relation to any reviewable decision under HESA in respect of a year prior to 2012.

Background

The SLE is a mechanism for limiting people's eligibility to undertake higher education study as a Commonwealth supported student. Generally, an eligible person starts with an SLE equivalent to seven years full-time study. This is progressively reduced as the person completes units of study in which he or she is enrolled as a Commonwealth supported student. HESA also provides various ways in which a person may obtain more SLE.

With the abolition of SLE and the consequential removal of concepts that were dependent on or influenced by SLE, Division 36 is being restructured to focus instead on methodologies for refunding student contribution amounts. This previously was achieved through provisions dealing with the re-crediting of SLE. The concept of re-crediting SLE will no longer have any relevance.

Some concepts currently within Chapter 3, such as EFTSL are being relocated to other parts of HESA because they need to be retained. The concept of EFTSL is an integral part of the Commonwealth Grant Scheme and HELP schemes.

Division 36 as amended also includes slightly revised provisions dealing with tuition assurance arrangements including where replacement units are a possible alternative to refunding student contributions and Commonwealth contributions. These provisions are intended to have the same effect in respect of refunding student contribution amounts as in HESA prior to the amendments to be made by this Bill.

Higher education providers are responsible for deciding which students are Commonwealth supported, but must do so in accordance with the rules laid out in HESA. One of these rules is that a provider may only advise a student that they are Commonwealth supported in a unit of study if the student has an amount of SLE equivalent to or greater than the equivalent full-time student load (EFTSL) value of the unit of study.

Under HESA, the Commonwealth pays a higher education provider a subsidy in respect of the units of study in which a Commonwealth supported student is enrolled (through the Commonwealth Grant Scheme) and the student is required to pay a 'student contribution amount' in respect of those units. The student thus only makes a contribution to the cost of their study. They are not required to pay the 'full cost'.

Commonwealth supported students can obtain assistance to pay their 'student contribution amounts' under the HECS-HELP scheme. In contrast, students who are not Commonwealth supported are required to pay the full cost of their study (the 'tuition fee') and, if eligible, may obtain assistance to pay these fees under the FEE-HELP scheme.

Detailed explanation

Part 1 - Amendments

Higher Education Support Act 2003

Item 1 - Section 3-10

Section 3-10 of HESA outlines the assistance to students that is covered by Chapter 3 of HESA . Item 1 amends section 3-10 by omitting the reference to the Student Learning Entitlement.

Items 2 and 3 - Subparagraph 19-45(1)(c)(i) and Paragraph 19-45(4)(a)

Section 19-45 of HESA requires higher education providers to have grievance and review procedures . Items 2 and 3 omit the references to section 36-22 in subparagraph 19-45(1)(c)(i) and paragraph 19-45(4)(a) and replaces them with a reference to section 36-20. This is a consequential amendment to Item 9 which repeals sections 36-20, 36-22, 36-22A and 36-23 and replaces them with new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B, and 36-24C.

The new section 36-20 requires higher education providers to repay certain amounts to students and the Commonwealth if students are unable, due to special circumstances, to complete the requirements of units of study.

Items 4 and 5 - Paragraphs 19-50(1)(a) and 19-50(2)(c)

Section 19-50 of HESA requires a higher education provider to appoint review officers to undertake reviews of decisions made by the provider . Items 4 and 5 omit the references to section 36-22 in paragraphs 19-50(1)(a) and 19-50(2)(c) and replace them with a reference to section 36-20. This is a consequential amendment to Item 9 which repeals sections 36-20, 36-22, 36-22A and 36-23 and replaces them with new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B, and 36-24C.

Item 6 - Subsection 19-60(1)

Subsection 19-60(1) of HESA requires a higher education provider to comply with the information privacy principles contained in section 14 of the Privacy Act 1988 with respect to certain personal information it obtains . Item 6 omits the reference to section 36-22 in subsection 19-60(1) and replaces it with a reference to section 36-20. This is a consequential amendment to Item 9 which repeals sections 36-20, 36-22, 36-22A and 36-23 and replaces them with new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B, and 36-24C.

Item 7 - Paragraph 33-30(2)(b)

Section 33-30 of HESA covers how to work out the number of Commonwealth supported places a higher education provider provides during a year . Item 7 omits the reference to subsection 73-15(2) in paragraph 33-30(2)(b) and replaces it with a reference to subsection 169-28(2). This is a consequential amendment to Item 20 which inserts new sections 169-27 and 169-28 into HESA. New section 169-28 (which replicates section 73-15, which is repealed by Item 14) sets out the meaning of EFTSL value.

Item 8 - Paragraph 36-10(1)(d)

Pursuant to subsection 36-10(1) of HESA, a higher education provider must not advise a person that he or she is a Commonwealth supported student in relation to a unit of study unless certain criteria are satisfied. This includes the criteria in paragraph 36-10(1)(d), which are that the unit:

-: is covered by a person's Student Learning Entitlement; or
-: wholly consists of work experience in industry; or
-: is undertaken as part of an enabling course.

Item 8 repeals paragraph 36-10(1)(d) in its entirety. This is a consequential amendment to Item 14 that repeals Part 3-1 about the Student Learning Entitlement in its entirety. Additionally, work experience in industry and enabling courses do not fall within a person's Student Learning Entitlement and so, with the abolition of the Student Learning Entitlement, no longer need to be included within paragraph 36-10(1)(d).

Item 9 - Sections 36-20, 36-22, 36-22A and 36-23

Item 9 repeals sections 36-20, 36-22, 36-22A and 36-23 and substitutes new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B and 36-24C.

With the abolition of the SLE and because work experience in industry and enabling courses do not fall within a person's SLE, sections 36-20 (Providers to repay amounts if Student Learning Entitlement is re-credited), 36-22 (Providers to repay amounts etc. for units wholly consisting of work experience in industry - special circumstances), 36-22A (providers to repay amounts etc. for units wholly consisting of work experience in industry - provider ceases to provide course) and 36-23 (Providers to repay amounts etc. for units wholly consisting of work experience in industry - no tax file numbers) are no longer required.

Important concepts that are currently set out in these provisions are being retained in the new provisions.

These concepts relate to what happens when a student remains enrolled in a unit of study at the end of the 'census date' but is unable to complete the unit in prescribed circumstances.

The new provisions are as follows:

36-20 Providers to repay amounts-special circumstances

New section 36-20 concerns when higher education providers must repay student contribution amounts to a student and HECS-HELP assistance to the Commonwealth in circumstances where special circumstances apply to the student.

Given that SLE will be abolished, where special circumstances apply to a student, the re-crediting of that person's SLE in respect of a unit of study (under the current Division 79) no longer applies to give effect to:

(a): the reduction of any HECS-HELP debt of a Commonwealth supported student relating to that unit of study; or
(b): a higher education provider's obligation to repay any student contribution amounts or payments it receives in respect of the HECS-HELP assistance for the unit.

Therefore the provisions under the new section 36-20 now give effect to those requirements.

Additionally, under the SLE regime, units of study wholly consisting of work experience in industry (WEI units) did not reduce a person's SLE. These amendments also give effect to the new regime where re-crediting debts associated with WEI units are to be addressed in the same manner as other units of study.

New subsection 36-20(5) clarifies that if a determination made under subsection 36-20(1) (that section 36-20 applies to a person) is made in writing the determination is not a legislative instrument.

Subsection 36-20(5) is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The subsection is merely declaratory of the law.

36-21 Special circumstances

New section 36-21 sets out what will constitute 'special circumstances' for the purposes of new section 36-20. The content of the special circumstances requirements in new subsection 36-21(1) are as follows:

-: the circumstances are beyond the person's control; and
-: the circumstances do not make their full impact on the person until on or after the census date for the unit of study in question; and
-: these circumstances make it impracticable for the person to complete the unit of study during the relevant semester.

New subsection 36-21 provides that the Administration Guidelines may set out the circumstances whereby a higher education provider may be satisfied that these special circumstances criteria have been met. New subsection 36-21 also provides that a provider's decision on special circumstances must be in accordance with these Guidelines. A note to new subsection 36-21 states that the Guidelines would also have effect for the purposes of re-crediting a person's FEE-HELP balance (see new subsection 104-30(2) to be inserted by Item 16).

It is intended that relevant information about special circumstances from the Student Learning Entitlement Guidelines will be transferred into revised Administration Guidelines for registration on the Federal Register of Legislative Instruments and tabling in Parliament prior to the commencement of Schedule 2 from 1 January 2012.

36-22 Application period

New section 36-22 sets out the application period for the purposes of a person applying to a higher education provider for repayment of his or her student contribution amount, or remission of his or her HECS-HELP debt in respect of a unit of study.

If the person has withdrawn his or her enrolment and the provider has given the person notice that the withdrawal has taken effect from a particular day then the application period is 12 months after the day specified in a notice given to the person by the provider as the day when the withdrawal takes effect.

If the person has not withdrawn his or her enrolment or the provider does not give the person a notice that the withdrawal has taken effect from a particular day, then the application period is 12 months after the end of the period when the person undertook or was to have undertaken the unit.

These timeframes are the same as those specified in to be repealed subsections 36-22(5) and (6).

36-23 Dealing with applications

New section 36-23 sets out how higher education providers are to consider special circumstances applications. The application is to be considered as soon as possible and a statement of reasons for the decision is to be provided. New section 36-23 contains the same requirements as the to be repealed subsections 36-22(7) and (8).

36-24A Providers to repay amounts - provider ceases to provide course

New subsection 36-24A requires higher education providers, in the event that they cease to provide the course, to repay student contribution amounts to Commonwealth supported students and to repay HECS-HELP assistance amounts to the Commonwealth.

Given that SLE will be abolished, where a provider ceases to provide a course of which a unit forms part, the re-crediting of a person's SLE in respect of that unit of study (under the current Division 79) no longer applies to give effect to:

(a): the reduction of any HECS-HELP debt of a Commonwealth supported student relating to that unit of study; or
(b): a higher education provider's obligation to repay any student contribution amounts or payments it receives in respect of the HECS-HELP assistance for the unit.

Therefore the provisions under the new section 36-24A now give effect to those requirements.

New subsection 36-24A(3) clarifies that if a determination made under subsection 36-24A(1) (that section 36-24A applies to a person) is made in writing, the determination is not a legislative instrument.

Subsection 36-24A(3) is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The subsection is merely declaratory of the law.

A provider's discretion under this provision is contained. The provider must apply the provision in defined circumstances. On that basis, the decision is not reviewable.

36-24B - Providers to repay amounts-no tax file numbers

New subsection 36-24B requires higher education providers, in the event that they cancel a person's enrolment under subsection 193-5(1) (which concerns there being no entitlement to HECS-HELP assistance for students who do not have a tax file number), to repay student contribution amounts to the person and to repay HECS-HELP assistance amounts to the Commonwealth.

Given that SLE will be abolished, where a provider cancels a person's enrolment in a unit of study under subsection 193-5(1) of the Act, the re-crediting of that person's SLE in respect of that unit of study (under the current Division 79) no longer applies to give effect to:

(a): the reduction of any HECS-HELP debt of a Commonwealth supported student relating to that unit of study; or
(b): a higher education provider's obligation to repay any student contribution amounts or payments it receives in respect of the HECS-HELP assistance for the unit.

Therefore the provisions under the new section 36-24B now give effect to those requirements.

36-24C - Secretary may act if provider is unable to

New section 36-24C provides that if a higher education provider cannot act for one of the purposes set out in the following (new) provisions, then the Secretary may act as though the references in those provisions to the provider are instead references to the Secretary:

-: subsection 36-20(1)
-: section 36-21
-: section 36-22
-: section 36-23
-: subsection 36-24A(1)

Item 10 - Paragraph 36-30(1)(a)

Subsection 36-30(1) of HESA concerns the requirement for higher education providers to enrol a person as a Commonwealth supported student in a unit of study where certain criteria are satisfied . Item 10 amends subsection 36-30(1) to remove the reference in paragraph 36-30(1)(a) to the requirement that the unit of study be covered by the person's SLE.

Item 11 - Paragraph 36-30(3)

Subsection 36-30(3) of HESA concerns the requirement for higher education providers to enrol a person as a Commonwealth supported student in a unit of study where certain criteria are satisfied . Item 11 amends subsection 36-30(3) to remove the reference in paragraph 36-30(3) to the requirement that the unit of study be covered by the person's SLE.

Items 12 and 13 - Section 65-1

Section 65-1 of HESA explains what Chapter 3 of HESA (assistance to students) is about . Item 12 amends the first paragraph of section 65-1 so that it will read "This Chapter provides for 3 kinds of assistance that the Commonwealth provides to students" (ie removing the reference to the SLE).

Item 13 deletes the second paragraph of section 65-1 (ie omits the words "A sufficient Student Learning Entitlement is required for a student to access HECS-HELP assistance under this Chapter. It also enables a student to access places that are funded under Part 2-2 (Commonwealth Grant Scheme)").

Item 14 - Part 3-1

Item 14 repeals Part 3-1 of HESA which deals with the SLE.

Item 15 - Paragraph 90-1(d)

Section 90-1 of HESA sets out criteria concerning a student's entitlement to HECS-HELP assistance for a unit of study . Item 15 repeals paragraph 90-1(d) to remove the redundant criterion that the unit of study be covered by the student's SLE or consist wholly of work experience in industry.

Item 16 - Subsection 104-30(2)

Section 104-30 concerns special circumstances for the purposes of paragraph

104-25(1)(c) - re-crediting a person's FEE-HELP balance. These special circumstances are specified in subsection 104-30(1) and are as follows:

-: the circumstances are beyond the person's control; and
-: the circumstances do not make their full impact on the person until on or after the census date for the unit of study in question; and
-: these circumstances make it impracticable for the person to complete the unit of study during the relevant semester.

Item 16 repeals and substitutes a new subsection 104-30(2) to provide that, if the Administration Guidelines (instead of the Student Learning Entitlement Guidelines) set out the circumstances whereby a higher education provider may be satisfied that special circumstances criteria have been met for the purposes of new paragraphs 36-21(1)(a), (b), or (c) (see Item 9), then these circumstances will also apply to decisions made by a provider under section 104-30.

The note to new subsection 104-30(2) also makes it clear that the special circumstances criteria in new paragraphs 36-21(1)(a), (b), and (c) are identical to the special circumstances criteria in amended paragraphs 104-30(1)(a), (b) and (c).

Item 17 - Subsections 137-5(4) and (5)

Section 137-5 of HESA concerns HECS-HELP debts and subsections 137(4) and (5) concern the remission of HECS-HELP debts where a person's SLE is re-credited or where the person's unit of study consists wholly of work experience in industry.

Item 17 repeals subsections 137(4) and (5) to remove the redundant references to the SLE and work experience in industry and substitutes a new subsection 137-5(4). The new subsection 137-5(4) provides that a person's HECS-HELP debt for a unit of study is taken to be remitted if the (new) sections 36-20, 36-24A, or 36-24B apply (see Item 9) - even if subsection 36-20(3) applies to the person's higher education provider . Item 17 also inserts a new subheading that reads "Remission of HECS-HELP debts" at the start of new subsection 137-5(4).

Item 18 - Subsection 169-5(4)

Section 169-5 of HESA concerns the notices that higher education providers must give as required by the Administration Guidelines . Item 18 amends subsection 169-5(4) to remove the redundant reference to the SLE.

Item 19 - Subsection 169-10(5)

Section 169-10 of HESA concerns the correction of notices given under section 169-5 . Item 19 amends subsection 169-10(5) to remove the redundant reference to the SLE.

Item 20 - After section 169-25

Item 20 inserts new sections 169-27 (Meaning of EFTSL) and 169-28 (Meaning of EFTSL value) after section 169-25.

Item 14 repeals Part 3-1 of HESA in its entirety (Student Learning Entitlement). This includes section 73-10 and 73-15 which, with one exception, are identical to new sections 169-27 and 169-28 respectively. This exception is that the reference to the (redundant) Student Learning Entitlement Guidelines in subsection 73-15(4) is changed to a reference to the Administration Guidelines in new subsection 169-28(4).

In essence, therefore , Item 20 moves sections 73-10 and 73-15 to become new sections 169-27 and 169-28 respectively. The concepts of EFTSL and EFTSL value need to be retained as they are central to the operation of the demand driven funding system under Part 2-2 of HESA and to the HECS-HELP scheme.

Item 21 - Subsection 193-5(1) (notes 1 and 2)

Section 193-5 concerns there being no entitlement to HECS-HELP assistance for students who do not have tax file numbers.

Item 21 repeals the two notes to subsection 193-5(1) thereby removing the redundant references to SLE and work experience in industry and inserts a new note. The new note states that if a person's enrolment is cancelled under section 193-5, the higher education provider may still have payment obligations by virtue of (new) section 36-24B (see Item 9).

Item 22 - Section 206-1 (table items 1A and 1)

The table at section 206-1 sets out those decisions under HESA that are reviewable decisions and the decision maker for those reviewable decisions.

Item 22 amends the table to repeal items 1A and 1 and to substitute a new item 1A.

Repealed table item 1A concerns decisions that section 36-22 does not apply to a person. Section 36-22 is being repealed by Item 9 and concerns special circumstances for units of study consisting wholly of work experience in industry.

Repealed table item 1 concerns decisions under section 79-1 to refuse to re-credit a person's SLE. Section 79-1 is in Part 3-1 of HESA which is to be repealed by Item 14.

Substituted table item 1A provides that a decision that section 36-20 does not apply to a person is a reviewable decision and that the decision maker is either the person's higher education provider, or the Secretary (if the Secretary made that decision). Section 36-20 is to be inserted by Item 9.

Item 23 - Subsection 209-1(2) (note 1)

Section 209-1 specifies who the reviewer of a reviewable decision is. Note 1 to subsection 209-1(2) states that the Secretary may delegate to a higher education provider's review officer powers to reconsider decisions under section 36-22 or Chapter 3.

Item 23 amends this note to change the reference to section 36-22 to section 36-20. This is a consequential amendment to Item 9 which repeals section 36-22 and reinserts it as new section 36-20 (with a few minor changes).

Item 24 - Paragraph 238-1(2)(a)

Section 238-1 provides for delegations by the Secretary of the Secretary's powers under HESA. Subsection 238-1(2) provides that the Secretary may in writing delegate to a higher education provider's review officer the Secretary's powers under Division 209 to reconsider the provider's decisions under section 36-22 or Chapter 3.

Item 24 amends this note to change the reference to section 36-22 to section 36-20. This is a consequential amendment to Item 9 which repeals section 36-22 and reinserts it as new section 36-20 (with a few minor changes).

Items 25 and 26 - Subsection 238-10(1) (table item 1) and (table item 10)

Subsection 238-10 contains a table setting out the Guidelines the Minister may make under HESA. Column 3 of this table sets out the chapter/part/section of HESA for which the Guidelines listed in Column 2 of the table can be made.

Item 25 amends column 3 of item 1 of the table to add in a reference to section 36-21 with respect to the Administration Guidelines. This is a consequential amendment to Item 9 which inserts a new section 36-21.

Item 26 repeals table item 10 of the table which provided for the redundant Student Learning Entitlement Guidelines.

Items 27, 28, 29, 32, 33, 34, 35 and 36 - Subclause 1(1) of Schedule 1 - definitions of additional SLE; available; covered; eligible person; life long SLE; ordinary SLE; SLE; and Student Learning Entitlement

These items amend the dictionary at subclause 1(1) of Schedule 1 of HESA to repeal the following definitions that will be redundant with the abolition of the SLE:

-: additional SLE
-: available
-: covered
-: eligible person
-: life long SLE
-: ordinary SLE
-: SLE
-: Student Learning Entitlement

Items 30 and 31 - Subclause 1(1) of Schedule 1 - definitions of EFTSL and EFTSL value

Items 30 and 31 amend the dictionary at subclause 1(1) of Schedule 1 of HESA to correct the definitions of EFTSL and EFTSL value by inserting reference to the new relevant provisions relating to these terms as follows:

-: for EFTSL the correct reference should be section 169-27 and not section 73-10 (see Item 20); and
-: for EFTSL value the correct reference should be section 169-28 and not section 73-15 (see Item 20).

Part 2 - Application, savings and transitional provisions

Item 37 - Definitions

Item 37 provides that in Part 2 of Schedule 2:

-: commencement means the commencement of Schedule 2
-: new Act means HESA as it will be in force on and after the commencement of Schedule 2
-: old Act means HESA as it was in force immediately before the commencement of Schedule 2.

These definitions therefore apply Items 39, 40 and 41 of Part 2 of Schedule 2.

Item 38 - Application of amendments - general

Item 38 makes it clear that the amendments made by Schedule 2 in relation to the SLE apply in relation to units of study which have census dates that fall on or after 1 January 2012. This means that the current (old) provisions would continue to apply to units of study with a census date before 1 January 2012 and that these (old) provisions relating to re-crediting (Division 79 - In what circumstances can a person's Student Learning Entitlement be re-credited?) and requirements placed on providers relating to re-crediting (eg 'old' section 36-22) would still apply to those units of study.

Item 39 - Saving - review procedures and appointments of review officers

The effect of Item 39 is to save review procedures and appointments of review officers that were in force immediately before the commencement of Schedule 2 (in so far as they relate to review of decisions made under section 36-22 of the old Act) so that those procedures and appointments have effect on and after commencement of Schedule 2 as if the procedure or appointment relates to decisions made under section 36-20 of the old Act.

Item 40 - Saving - determination of EFTSL values

The effect of Item 40 is to save a determination of an EFTSL value of a unit of study that was in force immediately before commencement of Schedule 2 under section 73-15 of the old Act so that a determination has effect on or after commencement of Schedule 2 as if a determination were made in accordance with section 169-28 of the new Act.

Item 41 - Effect of abolition of SLE on persons who have used some or all of their SLE

Item 41 clarifies that the amendments made by Schedule 2 do not in any way serve to prevent anyone being enrolled as a Commonwealth supported student in the future, even though they may have used up all of some of their SLE before commencement.

Schedule 3 - Other amendments

Summary

Schedule 3 of the Bill will require Table A and Table B higher education providers to enter into a mission based compact with the Commonwealth in relation to each year for which a grant is to be paid to the provider under HESA.

It will amend HESA to promote free intellectual inquiry. It will do this in two ways. The first is by amending the objects of HESA to make it clear that the objects include promoting and protecting free intellectual inquiry in higher education learning, teaching and research. The second is to insert a new condition of funding into HESA providing that Table A and Table B higher education providers must have a policy that upholds free intellectual inquiry in relation to learning, teaching and research.

It will also make a number of minor amendments of a technical nature.

Background

In the 2009-10 Budget, the Australian Government announced a comprehensive reform package for the higher education sector. These reforms included the establishment of a new relationship between the Australian Government and Table A and Table B higher education providers through mission based compacts to provide a framework for jointly achieving reform objectives.

The mission based compacts provide a strategic framework for the relationship between the Commonwealth and relevant Table A or Table B providers and set out how their missions align with the Commonwealth's goals for higher education, research, research training and innovation.

Under HESA, Table A and Table B providers are eligible for certain Commonwealth grants. Section 41-25 of HESA provides that such grants are made on conditions, including that the body receiving the grant must meet the quality and accountability requirements which are set out in Division 19 of HESA.

Free intellectual inquiry is an important principle underpinning the provision of higher education in Australia and one that the Australian Government has committed to enshrining in HESA. The amendments to be made by Schedule 3 will give effect to that commitment.

Detailed explanation

Part 1- Amendments

Higher Education Support Act 2003

Item 1 - At the end of paragraph 2-1(a)

Item 1 amends the objects at paragraph 2-1(a) of HESA to add in an extra object as subparagraph 2-1(a)(iv). This new object of HESA is to promote and protect free intellectual inquiry in learning, teaching and research.

Item 2 - At the end of subsection 19-1(1)

Section 19-1 of HESA sets out the components of the quality and accountability requirements of HESA - which are comprised of the following:

-: the financial viability requirements (Subdivision 19-B)
-: the quality requirements (Subdivision 19-C)
-: the fairness requirements (Subdivision 19-D)
-: the compliance requirements (Subdivision 19-E)
-: the contribution and fee requirements (Subdivision 19-F).

Item 2 adds in a further component of the quality and accountability requirements - the compact and academic freedom requirements ( which are at new Subdivision 19-G).

Item 3 - At the end of Division 19

Item 3 inserts a new Subdivision 19-G (The compact and academic freedom requirements) into HESA comprised of new sections 19-110 and 19-115.

New subsection 19-110(1) provides that all Table A and Table B higher education providers must, in relation to each year for which they receives grants from the Commonwealth under HESA, enter into a mission based compact with the Commonwealth for that year.

New subsection 19-110(2) provides that the Minister may enter into a mission based compact with a Table A or B provider on behalf of the Commonwealth.

New subsection 19-110(3) provides that mission based compacts must include statements of the provider's mission, its strategies for teaching and learning and its strategies for undertaking research, research training and innovation. A note makes it clear that mission based compacts may also include other matters - any such additional matters would depend upon the outcome of discussions between the Commonwealth and the provider concerned.

New subsection 19-110(4) provides that the Secretary must cause a copy of each compact entered into to be posted on the Department's website within 28 days of the making of the compact.

New subsection 19-115 provides that Table A and Table B higher education providers must have a policy that upholds free intellectual inquiry in relation to learning, teaching and research.

By being included as quality and accountability requirements, compliance with these requirements will be a condition of funding under Part 2-2 (see section 36-60); Part 2-3 (see subparagraph 41-25(b)(ii)); and Part 2-4 (see section 46-25).

Items 4 and 5 - Subsection 30-25(4) and after section 30-27

Subsection 30-25(4) of HESA requires the Minister to table funding agreements in both Houses of Parliament within 15 sitting days after the agreements have been entered into . Item 4 repeals subsection 30-25(4).

This is a consequential amendment to Item 5 which inserts a new section 30-28 into HESA that requires the Secretary to publish on the Department's website each funding agreement entered into within 15 days of the making of the agreement (this should make copies of the funding agreements accessible to the public in shorter timeframes).

Item 6 - Section 36-32

Section 36-32 of HESA provides that nothing in sections 36-25 or 36-30 requires a higher education provider to advise a person that he or she is a Commonwealth supported student with respect to a unit of study undertaken at a particular campus of the provider . Item 6 repeals section 36-32, which is no longer relevant in the environment of capped and uncapped places.

Item 7 - Subclause 1(1) of Schedule 1

Item 7 inserts a new definition of compact and academic freedom requirements into the dictionary at subclause 1(1) of Schedule 1 of HESA. It defines the term as the requirements set out in (new) Subdivision 19-G.

Part 2- Application, savings and transitional provisions

Item 8 - Definitions

Item 8 provides that in Part 2 of Schedule 3:

-: commencement means the commencement of Schedule 3
-: new Act means HESA as it will be in force on and after the commencement of Schedule 3.

Item 9 - Application of amendments - general

Item 9 is an application provision and provides that the amendments made by Schedule 3 apply to the year commencing on 1 January 2012 and to subsequent years.

Item 10 - Transitional - mission based compacts

Item 10 is a transitional provision.

Sub-item 10(1) provides that Item 10 applies if the Minister entered into a mission based compact with a Table A or Table B provider before commencement of Schedule 3, the compact satisfies the requirements of subsection 19-110(3) of the new Act and the compact is still in force immediately before the commencement of Schedule 3.

If the conditions in sub-item 10(1) applies, the compact is taken to have been entered into under section 19-110 of the new Act (sub-item 10(2)). The Secretary must cause a copy of the compact to be published on the Department's website within 28 days after commencement of Schedule 3, if the compact had not previously been published on the Department's website (sub-item 10(3)).

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NOTES ON CLAUSES

Schedule 1 - Amendments relating to demand driven funding system

Schedule 2 - Amendments relating to Student Learning Entitlement

Schedule 3 - Other amendments

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