Explanatory Memorandum
(Circulated by authority of the Minister for Education and Youth, the Hon Alan Tudge MP)OUTLINE
The Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Bill 2021 amends the Higher Education Support Act 2003 (HESA) to implement the 2021-22 Federal Budget measure to extend the FEE-HELP loan fee exemption by a further six months, to 31 December 2021.
HESA is the main piece of legislation governing Commonwealth funding of higher education in Australia. HESA facilitates the provision of Commonwealth financial support to higher education providers through Government subsidies, and provides loans to higher education students to cover their tuition and other fees.
Schedule 1 of the Bill amends section 137-10 of HESA to:
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- extend the FEE-HELP loan fee exemption measure currently in place for units with a census date between 1 April 2020 and 30 June 2021 by a further six months, to 31 December 2021. The Australian Government originally introduced a temporary exemption from the FEE-HELP loan fee for units with a census date between 1 April 2020 and 30 September 2020, which was later extended by a further nine months, to 30 June 2021;
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- apply a 20 per cent FEE-HELP loan fee for units with a census date on or after 1 January 2022.
This measure provides domestic higher education undergraduate students seeking FEE-HELP loans with an exemption from the requirement to pay the 20 per cent loan fee for units of study with census dates within the eligible period, thereby reducing the financial burden on these students. This will provide an incentive for those students who have been financially affected by COVID-19 to continue or commence study in 2021, in turn supporting higher education providers to continue to deliver the high quality education which will be essential to Australia's economic recovery from the COVID-19 pandemic.
FINANCIAL IMPACT STATEMENT
This Bill implements a measure from the 2021-22 Federal Budget to provide financial relief to students accessing FEE-HELP as well as supporting higher education providers financially impacted by the COVID-19 pandemic.
The measure in Schedule 1 to the Bill (extending the student loan fee exemption) will have a negative impact of $43.9 million in fiscal balance terms and $0.5 million in underlying cash over the period 2021-22 to 2024-25.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
The Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Bill 2021 (the Bill) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Higher Education Support Amendment (Extending the Student Loan Fee Exemption) Bill 2021 amends the Higher Education Support Act 2003 (HESA) to implement the 2021-22 Federal Budget measure to extend the FEE-HELP loan fee exemption by a further six months, to 31 December 2021.
HESA is the main piece of legislation governing Commonwealth funding of higher education in Australia. HESA facilitates the provision of Commonwealth financial support to higher education providers through Government subsidies, and provides loans to higher education students to cover their tuition and other fees.
Schedule 1 of the Bill amends section 137-10 of HESA to:
- •
- extend the FEE-HELP loan fee exemption measure currently in place for units of study with a census date between 1 April 2020 and 30 June 2021 by a further six months, to 31 December 2021. The Australian Government originally introduced a temporary exemption from the FEE-HELP loan fee for units with a census date between 1 April 2020 and 30 September 2020, which was later extended by a further nine months, to 30 June 2021;
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- apply a 20 per cent FEE-HELP loan fee for units with a census date on or after 1 January 2022.
This measure provides domestic higher education undergraduate students seeking FEE-HELP loans with an exemption from the requirement to pay the 20 per cent loan fee for units of study with census dates between 1 April 2020 and 31 December 2021, thereby reducing the financial burden on these students. This will provide an incentive for those students who have been financially affected by COVID-19 to continue or commence study in 2021, in turn supporting higher education providers to continue to deliver the high quality education which will be essential to Australia's economic recovery from the COVID-19 pandemic.
Analysis of human rights implications
The Bill engages the following human rights:
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- the right to work - Article 6 of the International Covenant on Economic, Social and Cultural Rights (ICESCR); and
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- the right to education - Article 13 of the ICESCR.
ICESCR Article 6 - Right to work
Article 6(1) of the ICESCR recognises the right to work, which includes the right of everyone to the opportunity to gain their living by work which they freely choose or accept. Article 6(2) provides that the steps to be taken by State Parties to the ICESCR to achieve the full realisation of this right include providing technical and vocational education programs to facilitate access to employment.
The right to work is engaged by virtue of the objective of the Bill, which is to ensure loans to students are provided for higher education that meets workplace needs and improves employment outcomes.
The Bill promotes the right to work through temporarily removing loan fees for domestic higher education undergraduate students accessing FEE-HELP loans by reducing the financial burden on students accessing higher education through the HELP scheme. This enables students to continue their higher education studies that will lead to improved employment outcomes. It also supports workers eligible for FEE-HELP who are displaced by the COVID-19 crisis, by reducing their financial burden in accessing Commonwealth assistance for higher education studies to upskill or retrain, and in turn, improve their opportunities to work.
This Bill is compatible with the right to work.
ICESCR Article 13 - Right to education
The Bill engages the right to education under Article 13 of the ICESCR, which recognises the important personal, societal, economic and intellectual benefits of education. Article 13(2)(c) provides that 'higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education'.
The Bill promotes the right to education by temporarily removing loan fees for domestic higher education undergraduate students accessing FEE-HELP loans. This reduces the financial burden on undergraduate students accessing FEE-HELP, in turn ensuring that students continue to have the highest level of choice and control over their education options.
The Bill is compatible with the right to education.
Conclusion
The Bill is compatible with human rights because it advances the protection of human rights in the delivery of higher education in Australia.
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).