House of Representatives

Explanatory Memorandum

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

OUTLINE

The purpose of the Education Legislation Amendment (2020 Measures No. 1) Bill 2020 (the Bill) is primarily to amend the Higher Education Support Act 2003 (HESA) to implement a range of measures across the higher education sector. 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.

The Bill also includes some measures relating to the VET student loans (VSL) program, which provides income contingent loans for approved vocational education and training (VET) courses and is administered under the VET Student Loans Act 2016 (VSL Act).

Schedule 1 of the Bill gives effect to the Australian Government's 2019-20 Budget measure to extend the unique student identifier (USI) regime to all higher education students by requiring students commencing from 1 January 2021, and all students from 1 January 2023, to have a USI in order to be eligible for Commonwealth assistance under HESA.

Schedule 1 of the Bill also amends the VSL Act to require that, from 1 January 2021, a student's application for VSL must include the student's USI. This is consistent with the position that, from 2021, all new domestic higher education students must have been assigned a USI (unless an exemption applies), and with the current VSL application requirements, which require an application to include the student's USI if one has been assigned.

Schedule 2 of the Bill gives the Secretary of the Department of Education, Skills and Employment (Department) the power to determine certain students who, due to having more than one Commonwealth Higher Education Student Support Number (CHESSN), have exceeded the HELP loan limit, and allow these students to repay the resulting excess debt amounts through the taxation system.

Schedule 3 of the Bill amends section 128-15 of HESA to clarify that a student's HELP balance is taken to be reduced immediately after the census date for HECS-HELP assistance, FEE-HELP assistance and VET FEE-HELP assistance, and immediately after the census day for VSL. The purpose of this amendment is to ensure consistency across HELP and VSL by deeming the point in time at which a student's HELP balance is reduced to be the census date or day.

Schedule 4 of the Bill amends section 137-10 of HESA to implement the loan fee exemption measure from the Government's Higher Education Relief Package in response to the COVID-19 pandemic. This measure provides undergraduate students seeking FEE-HELP loans with an exemption from the requirement to pay the 25% loan fee for units of study with census dates from 1 April to 30 September 2020, thereby reducing the financial burden on these students during that period. Many students seeking to undertake study in the current climate may defer any decision to enter into a loan, thus reducing enrolment numbers and potentially having a negative financial impact on higher education providers. Providing an exemption from the loan fee may provide an incentive for these students to continue or commence semester two study, despite the financial effects of COVID-19.

Schedule 5 of the Bill includes the following minor and technical amendments to HESA:

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Part 1 amends section 128-20 to include an 'approved course' (as defined in the VSL Act) in the definition of 'course of study in aviation' - this makes a technical correction and ensures that the higher HELP loan limit is available to students enrolled in VET, as well as higher education, aviation courses that enable graduates to obtain commercial flying qualifications; and

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Part 2:

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amends the table in subsection 16-15(1) to change the name of a university to ensure consistency with state legislation and university branding, and

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makes a minor technical amendment to subsection 166-20(5) to replace the words 'an approved course provider' (not defined in HESA) with 'a higher education provider' (defined in HESA).

FINANCIAL IMPACT STATEMENT

This Bill implements a measure from the Government's Higher Education Relief Package in response to the COVID-19 pandemic, as well as a higher education measure from the 2019-20 Federal Budget.

The measure in Schedule 4 to the Bill (loan fee exemption for undergraduate FEE-HELP students for six months) will have a negative impact of $53 million in fiscal balance terms over the period from 2019-20 to 2023-24.

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