Explanatory Memorandum(Circulated by authority of the Minister for Education and Youth, the Hon Alan Tudge MP)
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 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;
- 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.