House of Representatives

Education Legislation Amendment (Up-front Payments Tuition Protection) Bill 2020

Second Reading Speech

Mr TEHAN (Wannon - Minister for Education)

I move:

That this bill be now read a second time.

The Education Legislation Amendment (Up-front Payments Tuition Protection) Bill 2020 expands Australia's unique and successful Tuition Protection Service (TPS) to cover domestic higher education students who pay their study costs upfront. This will ensure that higher education students receive the same high-quality government backed tuition protection regardless of whether they pay upfront or access a HELP loan for their study costs.

These new tuition protection arrangements will ensure that domestic higher education students who pay for their study costs upfront are supported if their private higher education provider stops teaching or closes entirely. Students protected under these new arrangements will be assisted to complete their studies in a similar course with another provider and gain their qualification, or they may receive a refund for tuition payments they had made for those units of study which were not fully delivered by their provider.

The TPS successfully delivers tuition protection for international students and domestic students who receive Commonwealth assistance in the form of a HELP or VSL loan to support their studies. The TPS is a well-respected and proven model and contributes to the strong reputation of Australia's international education sector. The expansion of the TPS to include domestic higher education students who pay tuition fees for their studies upfront contributes to the government's ongoing commitment to safeguard the integrity and quality of Australia's higher education sector.

The bill also provides that, from 1 January 2021, the new tuition protection arrangements will:

be administered by a statutory appointed director. The same director will manage the HELP loans, VET Student Loans, and international education tuition protection arrangements;
require all private higher education providers to contribute annual levies commensurate with their size and risk. The levy system ensures the new arrangements are sustainable and can respond to sector trends;
rename the existing 'HELP Tuition Protection Fund' established under subsection 167-1(1) of Higher Education Support Act 2003, as the Higher Education Tuition Protection Fund, as the majority of leviable providers will have both upfront-paying students, and HELP students. This special account will be managed by the director to administer the arrangements for upfront payment students and HELP students, and to support displaced students;
ensure there are strict requirements for private higher education providers who cease delivering a course, or close, to ensure these providers put the interests of students first; and
enable payments to be made in connection with the new tuition protection arrangements and allow guidelines to be made to prescribe circumstances for which payments can be made. These guidelines will include an incentive payment to be paid to providers who take on displaced students, thus supporting them to continue their studies and gain their qualification.

In 2019, a number of providers and the peak bodies who represent the sector provided feedback to the Senate inquiry into the Education Legislation Amendment (Tuition Protection and Other Measures) Bill 2019 (which is now enacted), seeking an extension of the TPS to higher education students who pay their study costs upfront. Private higher education providers will also no longer be required to maintain separate burdensome and costly assurance arrangements for these upfront-paying students.

In light of the ongoing COVID-19 pandemic, and its impacts on the higher education sector, these new tuition protection arrangements provide an additional measure of assurance to domestic upfront-fee-paying students that they will be assisted in the event that their provider closes or stops teaching a course from 2021. These arrangements will encourage people to invest in their education and gain a qualification, knowing that they will be protected by government backed arrangements, so they can help expand Australia's skilled workforce and support growth in our economy.

I commend the bill.

Debate adjourned.