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House of Representatives

Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020

Explanatory Memorandum

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

OUTLINE

The purpose of the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 ( the Bill ) is to introduce reforms to higher education funding in Australia, and to strengthen and extend provider integrity measures, primarily through amendments to the Higher Education Support Act 2003 ( HESA ). HESA is the main piece of legislation providing funding for higher education in Australia, providing for Government subsidies and tuition support for students.

The Bill contains measures that will encourage higher education providers to produce job-ready graduates, create more opportunities for regional and remote students - including Aboriginal and Torres Strait Islander Australians - and direct growth in the higher education sector towards Australia's regions and national priorities. The Bill also includes measures to extend and strengthen student protection and provider integrity measures in HESA, and ensure higher education providers are more accountable for the outcomes they deliver for students, industry and the wider community.

Schedule 1 of the Bill includes amendments to HESA to redesign the Commonwealth Grant Scheme ( CGS ) funding clusters and the Commonwealth contribution amounts ( CCAs ) to better align CGS funding to the cost of delivering higher education and ensure this funding is directed to areas of national priority and employment growth. This Schedule also includes measures to ensure that higher education providers will continue to receive the same amount of CGS funding for 'grandfathered students' enrolled in a Commonwealth supported place ( CSP ), where the current maximum student contribution amounts ( SCAs ) will apply for units those students enrol in after 1 January 2021 (see Schedule 2). 'Grandfathered students' include students who are currently Commonwealth supported and:

·
are enrolled in a course of study prior to 1 January 2021 who have not completed that course immediately before that day;
·
completed a course of study before 1 January 2021 and go on to study a related honours course after that day;
·
are undertaking an enabling course in 2020 and go on to study another course of study leading to a higher education award on or after 1 January 2021;
·
are undertaking an undergraduate certificate in 2020 and go on to study a related course of study leading to a bachelor degree on or after 1 January 2021.

Schedule 1 of the Bill also amends HESA to change the way grants are paid to higher education providers in relation to CSPs. The changes mean a Table A provider's funding agreement may specify a maximum basic grant amount for any of the following:

·
'higher education courses' - any course of study other than a 'designated higher education course' or a 'demand driven higher education course';
·
'designated higher education courses' - a course of study in medicine or a course of study determined by the Minister; and
·
'demand driven higher education courses' - a course of study leading to either a bachelor degree or bachelor honours degree (other than a designated higher education course, currently a course of study in medicine) undertaken at a Table A university by an Indigenous person from a regional area or a remote area.

These amendments, and others made in Schedule 1 will allow Table A providers to be allocated a funding envelope for all CSPs in 'higher education courses,' which will provide Table A providers with more flexibility in how they use the bulk of their CGS funding to meet the demands of students, industry and their local communities.

Schedule 1 also amends HESA to remove the broad exclusion of 'work experience in industry' ( WEI ) units of study from CGS funding under subsection 33-30(1), and will instead only exclude WEI units from CGS funding where the student does not pay a SCA for that unit of study; that is, where there is essentially no engagement between the provider and the student for that unit of study. This amendment will remove barriers to the availability of this type of learning in higher education and encourage students to gain more work experience in what they learn and as they learn.

Schedule 2 of the Bill amends HESA to change the maximum SCAs for a place in a unit of study to reflect the changes to funding clusters and CCAs that are proposed in Schedule 1. This Schedule also ensures that 'grandfathered students' do not have to pay the higher maximum SCA for a unit of study they enrol in after 1 January 2021 where the SCA for that unit would otherwise increase as a result of the amendments being made by the Bill.

Schedule 3 of the Bill amends HESA to provide legislative authority for the National Priorities and Industry Linkage Fund ( NPILF ), and to allow for the transition arrangements required to implement the Indigenous, Regional and Low Socio-Economic Status Attainment Fund ( IRLSAF ).

Schedule 4 of the Bill amends the Education Legislation Amendment (Provider Integrity and Other Measures) Act 2017 to extend various quality and accountability requirements contained in HESA to all higher education providers (now including Table A, B and C universities), and also introduces new student protection measures in HESA (that would again apply to all providers). These amendments will support work being done in the higher education sector around best practice approaches to student enrolment and progression, and will re-signal the quality of Australia's higher education sector both domestically and internationally.

Specifically, the measures contained in Schedule 4 of the Bill will:

·
prohibit all providers from engaging in unscrupulous marketing practices and from submitting requests for Commonwealth assistance on behalf of students;
·
require a person to be a 'genuine student' in order to receive Commonwealth assistance;
·
require providers to assess a person's academic suitability to undertake a unit of study prior to that person receiving Commonwealth assistance for that unit;
·
prevent providers from pursuing ineligible students for SCAs or tuition amounts where the provider is at fault;
·
require a provider to re-credit a person's HELP balance in a range of circumstances including where the provider completes any part of the person's request for Commonwealth assistance for the relevant unit of study, or where the person was not entitled to HECS-HELP assistance in the first place;
·
allow the Minister to audit all higher education providers for matters of compliance with HESA;
·
enhance financial reporting requirements for, and improve assessment of the financial viability of providers;
·
apply civil penalties to existing obligations on providers under Division 19 of HESA;
·
preclude providers from imposing financial or administrative barriers to a student withdrawing from study;
·
require all higher education providers to co-operate with HESA and Tertiary Education Quality and Standards Agency ( TEQSA ) investigators;
·
require all higher education providers to keep records of a kind, in the manner and for the period required by the Higher Education Provider Guidelines, and publish information as required by those guidelines;
·
require a student to maintain an overall pass rate of 50 per cent to remain eligible for Commonwealth assistance; and
·
require providers to assess a student's capability to enrol in a concurrent study load above 2.0 Equivalent Full Time Study Load ( EFTSL ).

Schedule 5 of the Bill includes several miscellaneous amendments to HESA, including:

·
an amendment to subsection 142-1(2) to define a 'school' as including a 'centre-based day care service' - this change better aligns the legislation with the policy intention relating to very remote HELP debtors;
·
an amendment to remove the University College London ( UCL ) as a Table C provider, as UCL is no longer an approved higher education provider under HESA;
·
amendments to sections 27-5, 36-55, 51-5, 54-5, 57-1, 57-5 and 238-10 to remove references to the Tuition Fee Guidelines and the Reduction and Repayment Guidelines, as these guidelines have never been made; and
·
amendments to the names of certain Table A and Table B providers listed at subsections 16-15(1) and 16-20(1) to better reflect the names of these providers that are included on the TEQSA National Register for Providers and Courses.

Schedule 5 also amends paragraph 137-10(2)(b) of HESA to reduce, for units of study with a census date on or after 1 January 2021, the loan fee for students obtaining a FEE-HELP loan for an undergraduate course of study at a non-Table B provider from 25 per cent to 20 per cent.

The FEE-HELP loan fee recognises the cost to the taxpayer of the Commonwealth providing HELP loans to cover fee paying undergraduate places. The reduction of the loan fee allows the HELP scheme to remain sustainable, while also reducing the financial burden on students and the total time taken to repay a HELP debt. This change also brings consistency to the tertiary sector by aligning the FEE-HELP loan fee with the 20 per cent VET student loan fee that is applied to VET student loans accessed by full fee paying VET students.

Schedule 5 of the Bill also amends the Social Security Act 1991 to reduce (from six to three) the number of months a student living away from home must be receiving eligible student support payments (Youth Allowance, Austudy Payment and the Pensioner Education Supplement) before being eligible to receive Fares Allowance for a return journey home during the study year.

FINANCIAL IMPACT STATEMENT

The measures contained in Schedules 1, 2 and 3, and items 17 and 18 of Schedule 5, of the Bill, as announced as part of the Government's Job-ready Graduates Package (the Package), were budget neutral. Subsequent amendments to Schedule 1 of the Bill mean measures announced as part of the Package produce a net saving of approximately $125 million over the forward estimates, with this saving to be redirected towards additional places, such as short courses or Commonwealth supported places in 2021-22.

The measures in Schedule 4 of the Bill produce savings of $0.5 million in fiscal balance terms and a cost of $0.4 million in underlying cash over the period 2020-21 to 2023-24.

The remaining measures in the Bill do not have financial implications.


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