House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Education and Training, Senator the Honourable Simon Birmingham)

Schedule 3 - Amendment to the Higher Education Support Act 2003

Summary

The measures in Schedule 3 to the Bill amend HESA to:

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introduce specific powers to allow for the capping of the value of loans, the number of loan supported places and the range or delivery methods of courses which a provider may offer under the FEE-HELP program where necessary

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introduce a definition as to what constitutes a 'genuine student' for the purposes of reporting and claiming FEE-HELP liabilities

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provide additional student protection mechanisms to FEE-HELP students through the banning of inducements to enrolment, predatory marketing practices and fees or administrative barriers to withdrawal from units of study

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apply more stringent application requirements for FEE-HELP providers allowing the Minister to consider: the relevant experience level and expertise a provider has in delivering higher education; expanded the fit and proper person requirements; an application exclusion period of six months for failed FEE-HELP applicants; and provisions for State and Territory-established bodies to be exempt from body corporate requirements

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vary determinations relating to advance payments where there are concerns as to whether a provider's reported liabilities represent genuine students

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introduce more stringent financial viability requirements for FEE-HELP providers including a tightening of requirements in relation to who may conduct audits of providers' financial information and adding the capacity to amend the Higher Education Provider Guidelines to add additional financial viability or reporting requirements

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introduce specific powers for the Minister or the Minister's delegate to re-credit students' FEE-HELP balances where necessary

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provide the department with specific monitoring and regulatory powers to investigate instances of non-compliance and issue civil penalties.

These measures apply to providers not listed in Table A, B or C of HESA, and to students enrolling at these providers. These are generally private, non-university providers who offer courses of study eligible for FEE-HELP assistance.

Overall, these measures are broadly consistent with the VSL arrangements legislated in 2016.

Detailed explanation

Part 1 - Amendments

Higher Education Support Act 2003

Item 1 - Section 16-1

Because of the insertion of new subsections to section 16-1 of HESA by item 2, this item makes a technical amendment to section 16-1, to insert the subsection number '(1)' at the very start of the section.

Item 2 - At the end of section 16-1

Section 16-1 defines 'higher education provider' as a body corporate that is approved under Division 16 of HESA.

This item adds new subsections 16-1(2) to (5) into section 16-1 to allow for exemptions to the body corporate requirement for approved higher education providers.

New subsection 16-1(2) provides that despite the definition of 'higher education provider' in subsection 16-1(1), a body other than a body corporate may be approved under Division 16 as a 'higher education provider' if the body is covered by an exemption under new subsection 16-1(3).

New subsection 16-1(3) provides that the Minister may, in writing, exempt a body for the purposes of section 16-1 if the body is established by or under a law of the Commonwealth, a State or a Territory.

New subsection 16-1(4) provides that if the Minister exempts a body under subsection 16-1(3), references in HESA, other that this section, to a body corporate, are taken to include the exempted body.

New subsection 16-1(5) provides that an exemption given under this section is not a legislative instrument. This provision is declaratory of the law and is not intended as an exemption to the Legislation Act, but is included to assist readers in the interpretation of the legislation and for the avoidance of doubt.

This measure is intended to confer discretion on the Minister to exempt a provider that is owned by the Commonwealth, or a State or Territory government, or represents a body established by the Commonwealth or a State or Territory Government, from the requirement to be a body corporate in order to be approved as a higher education provider under HESA.

This measure is directed at resolving anomalies where, for example, currently the Bureau of Meteorology and the Australian Federal Police are registered higher education providers approved by TEQSA. However, as they are not bodies corporate, they are unable to gain approval under HESA, and therefore cannot offer FEE-HELP.

Item 3 - After paragraph 16-25(1)(fa)

Currently, subsection 16-25(1) provides that the Minister may, in writing, approve a body corporate as a higher education provider if the body established under the law of the Commonwealth, a State or Territory, carries on business in Australia, has its central management and control in Australia and is either a university, or a self-accrediting provider or a non self-accrediting provider that either fulfils the tuition assurance requirements under subsection 16-30(2) or is exempted from these requirements under subsection 16-30(2).

The body corporate must also apply for approval in the form and manner provided for in section 16-40 and satisfy the Minister that it is willing and able to meet the quality and accountability requirements set out in Division 19. If the body corporate is a non self-accrediting provider, it must meet the additional requirements in section 16-35. Subsections 16-25(2), (3) and (4) define a 'university', a 'self-accrediting provider' and a 'non self-accrediting provider' respectively.

Item 3 inserts a new paragraph 16-25(1)(fb). New paragraph 16-25(1)(fb) specifies that the Minister must be satisfied that the body has sufficient experience in the provision of higher education.

Currently, higher education providers may apply for approval under HESA with no experience in delivering higher education courses. This amendment will impose a minimum experience requirement on all applicants for approval as a higher education provider. The minimal experience requirement is flexible in that matters contained in new subsection 16-25(2A) (see item 4) are matters for consideration as opposed to being determinative or a condition precedent to approval. These arrangements are similar to those in place for VSL.

Item 4 - After subsection 16-25(2)

This item inserts new subsection 16-25(2A) which provides that, for the purposes of new paragraph (1)(fb) inserted by item 3 (which requires the Minister to be satisfied that the body has sufficient experience in the provision of higher education), the Minister may have regard to the following, non-exhaustive factors:

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whether the body has been a registered higher education provider (that is, a higher education provider registered under Part 3 and listed on the National Register of Higher Education Providers under paragraph 198(1)(a) of the TEQSA Act) for 3 or more years

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the history of the body, and each person who makes or participates in making decisions that affect the whole, or a substantial part, of the body's affairs, in delivering higher education

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the scope of courses and level of qualifications the body, and each person who makes or participates in making decisions that affect the whole, or a substantial part, of the body's affairs, has experience in providing.

The purpose of new subsection 16-25(2A) is to provide guidance to the Minister in considering whether the body, including its key personnel, has the requisite level of experience as an education provider for the purposes of the new paragraph 16-25(1)(fb), based on its performance record and history of service delivery (including in relation to the scope of courses and the particular qualification levels the provider and its key personnel are proposing to deliver).

Item 5 - After subsection 16-40(1)

Subsection 16-40(1) provides that a body corporate that is a registered higher education provider may apply, in writing, to the Minister for approval as a higher education provider under HESA.

This item inserts a new subsection 16-40(1A) which provides that if the body corporate makes an application (the earlier application) under subsection 16-40(1) and the Minister decides not to approve the earlier application, the body corporate is precluded from making another application for approval as a higher education provider within 6 months after the day on which notice of the decision on the earlier application was given to the body corporate.

The purpose of this amendment is to limit the ability of a body corporate who has applied unsuccessfully to become a higher education provider from making another application in short succession.

By introducing the exclusion period the quality of applications is expected to rise as providers will not wish to run the risk of a six month delay of access to FEE-HELP. Additionally, the exclusion period will encourage providers who fail to gain approval to take adequate time to address the reasons for their non-approval rather than immediately resubmitting an application.

Item 6 - At the end of section 16-60

Section 16-60 of HESA enables the Minister to impose conditions on the approval of a body as a higher education provider.

This item inserts a new subsection 16-60(3) which empowers the Minister to impose certain conditions of approval aimed at limiting the ability of any unscrupulous higher education providers to exploit grants and other payments provided under HESA. The amendment enables the Minister to give qualified approval to a body by imposing specific conditions on its approval, and is not limited to imposing conditions only at the time the body is notified of its approval as an approved provider. The Minister may also impose or vary a condition any time after a body has been approved.

Under paragraphs 16-60(3)(a) to (e), the Minister may impose the following conditions:

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that a specified limit on the total number of students entitled to FEE-HELP assistance applies to the provider for a specified period

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that a specified limit on the total amount of FEE-HELP assistance payable to the provider applies to the provider for a specified period

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that FEE-HELP assistance is payable only in relation to specified units of study offered by the higher education provider

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that FEE-HELP assistance is not payable in relation to specified units of study offered by the higher education provider

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that units of study provided in a specified manner or by a specified mode of delivery by the higher education provider are units in relation to which FEE-HELP assistance is unavailable.

Because of the breadth of the power, these conditions were included to provide clarity around the types of additional conditions that may be applied to providers.

This mirrors arrangements in the VET sector, as legislated in 2016.

New subsection 16-60(4) clarifies that new subsection 16-60(3) does not limit the conditions the Minister may impose on the approval of a higher education provider.

Items 7 and 8 - Subsection 19-10(2)

Subsection 19-10(2) specifies the requirements for a financial statement that a higher education provider must give to the Minister, pursuant to subsection 19-10(1), for each annual financial reporting period in which the provider receives assistance under Chapter 2 or a student of the provider receives assistance under Chapter 3 of HESA.

The financial statement must be in the form approved by the Minister, must be provided together with a report on the statement by a qualified auditor, and must be provided within 4 months after the end of the 'annual financial reporting period' for which the statement was given. An 'annual financial reporting period' for a higher education provider is the period of 12 months to which the provider's accounts relate that is notified in writing to the Minister as the provider's annual financial reporting period (subsection 19-10(3)).

Item 7 inserts a new paragraph 19-10(2)(ab), which requires that the financial statement must comply with the requirements prescribed by the Higher Education Provider Guidelines.

Item 8 inserts a new subsection 19-10(2A) which provides that requirements made for the purposes of new paragraph 19-10(2)(ab) may make different provision in relation to different kinds of providers, circumstances or any other matter. That is, the financial reporting requirements can be adjusted to the composition of the provider, their mode of operation or other matters which may bear on the provider's ability to adhere to the Higher Education Provider Guidelines.

The purpose of these items is to ensure that providers with annual revenue of $10 million or more are adhering to all accounting standards and provide the department with general purpose financial statements. The measures are intended to mirror financial reporting requirements for higher education providers with high annual revenue as currently apply to all VET providers with high annual revenue eligible to offer VET student loans under section 113 of the VET Student Loans Rules.

Item 9 - Section 19-12

Section 19-12 currently provides that, in determining whether a higher education provider is financially viable, and likely to remain so, the Minister must have regard to any financial statement provided by the provider under section 19-10.

This item repeals and replaces section 19-12 with a new section 19-12 to be titled 'Minister to have regard to financial information and matters prescribed in Higher Education Provider Guidelines'. The new section 19-12 sets out matters that the Minister must have regard to in making a determination as to whether or not a higher education provider is financially viable. These factors are:

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any financial statement provided by the provider under section 19-10

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the matters (if any) prescribed by the Higher Education Provider Guidelines.

The replacement section provides for a higher level of granularity as to the factors which must be considered by the Minister in making a determination as to financial viability. This is achieved by requiring the Minister to have regard to any matters prescribed by the Higher Education Provider Guidelines. These Guidelines will prescribe the form of the financial statements approved by the Minister or delegate under section 19-10(2) of HESA.

Item 10 - After section 19-35

This item inserts a suite of new sections into Division 19 (dealing with quality and accountability requirements). These provisions are directed to protecting students from unscrupulous behaviour on the part of providers and, by extension, enhancing the integrity of the higher education sector and making education and training providers more accountable for their recruitment and enrolment practices.

Section 19-36 - Misrepresenting assistance under Chapter 3

New section 19-36 prohibits a higher education provider from representing (whether in writing or through any verbal representation) that assistance payable under Chapter 3 is either not a loan or does not need to be repaid. Contravention of this section attracts a civil penalty of 240 penalty units to reflect the particularly serious nature of the contravention and deter such conduct. The application of civil penalties mirrors VSL arrangements legislated in 2016.

It is imperative to protect students from enrolling in higher education courses based on a misunderstanding as to the nature of a HELP loan and the requirement to repay the loan.

Section 19-36A - Offering certain inducements

New subsection 19-36A(1) prohibits a provider from offering, or providing a benefit, or causing a benefit to be offered or provided, if such a benefit would be reasonably likely to induce a person to make a request for Commonwealth assistance in relation to enrolling in a unit of study with the provider. Contravention of this provision carries a civil penalty of 120 penalty units to reflect the serious nature of the contravention. This provision is consistent with VSL arrangements legislated in 2016.

Subsection 19-36A(2) provides that the prohibition on inducements contained in subsection 19-36A(1) does not apply in relation to the benefit specified in the Higher Education Provider Guidelines. For example, promoting the content and quality of a higher education course, a record of high completion rates, or graduate employment outcomes would not be a benefit contemplated within the ambit of the prohibition in subsection 19-36A(1) while, for example, offering cash incentives for enrolment, or inducements such as free tablet devices, would be within the ambit of the new prohibition.

The intent of new subsection 19-36A is to ensure students are not induced to apply for Commonwealth assistance for a course or unit of study by inappropriate benefits or inducements. This provision is intended to avoid situations that occurred historically in the context of the VFH scheme, in which students were induced to enrol in a VET course and apply for a loan with the offer of free laptops, money and vouchers for goods and services. The prohibition on the offering of inducements extends to any marketing, advertising or material which does or could involve promoting of an inducement.

Section 19-36B - Engaging in cold-calling

New section 19-36B prohibits a higher education provider from cold calling another person to market, advertise or promote a unit or course of study where in doing so, or as a result of doing so, the provider mentions the possible availability of assistance (however described) under Chapter 3 for students undertaking the course. Contravention of this provision carries a civil penalty of 60 penalty units.

Cold-calling is defined in subsection 19-36B(3) to include making unsolicited contact with a person (namely a student or prospective student) in person, by telephone, email or other form of electronic communication. This definition is not exhaustive and is intended to be interpreted broadly as any form of uninvited solicitation by a provider in an attempt to convince a person to purchase the provider's educational product or service.

The purpose of new section 19-36B is to ensure that, unless a student or prospective student has provided his or her express consent to being contacted by a provider, the provider cannot mention the availability of assistance under Chapter 3 (i.e. HELP loans) for students undertaking that course. For example, this would preclude a provider approaching a prospective student in a shopping centre and mentioning the availability of higher education assistance.

New subsection 19-36B(4) enables the Higher Education Provider Guidelines to set out conduct that is deemed to be cold-calling for the purposes of new section 19-36B.

These arrangements mirror those in place for VSL.

Section 19-36C - Use of third party contact lists

New section 19-36C provides that a higher education provider contravenes this provision if the provider receives a student's contact details from another person, contacts the student to market, advertise or promote a course and when doing so, or as a result of doing so, mentions the possible availability of assistance (however described) under Chapter 3 for students undertaking the course. Contravention of this section attracts a civil penalty of 60 penalty units. This is consistent with VSL arrangements currently in place.

This section is intended to prevent higher education providers from contacting (unless the person has expressly consented to being contacted by that particular provider) prospective students to market or promote courses and the availability of higher education assistance, where the provider has obtained the person's contact details from contact lists procured from third parties, in instances where, for example, the person has provided broad consent to direct marketing (for example, job seek websites).

Section 19-36D - Other marketing requirements

New section 19-36D enables the Higher Education Provider Guidelines to set out requirements in relation to the marketing of courses in circumstances where HELP assistance may be payable by the Commonwealth under Chapter 3. Failure to comply with these requirements is a contravention that carries a civil penalty of 60 penalty units.

This provision recognises and provides for the need to allow for more detailed and specific rules and limitations in relation to the marketing of courses to be specified in the Higher Education Provider Guidelines. This allows for the Guidelines to be updated to deal with or target emergent practices and remain responsive to the changing higher education environment in order to combat the evolving practices of the less scrupulous higher education providers. The civil penalty is justified as a deterrent to unscrupulous marketing practices by higher education providers and as a further mechanism to protect prospective students from exposure to such sharp practices.

Section 19-36E - Requirements relating to requests for Commonwealth assistance

New section 19-36E provides that a higher education provider must not complete any part of a request for Commonwealth assistance that the student is required to complete.

A provider will contravene new section 19-36E if the provider completes or assists with completing (including, for example, by arranging for a third party to complete or assist with completing) any aspect or part of a request for Commonwealth assistance that a student must complete in his or her own right. This measure is designed to circumvent attempts by unscrupulous providers in procuring applications for student loans nefariously or on unjust or deceptive terms.

Contravention of this section attracts a civil penalty of 120 penalty units to reflect the serious nature of the contravention and deter such conduct.

This is consistent with VSL arrangements legislated in 2016.

Item 11 - At the end of subsection 19-40(1)

This item imposes a civil penalty of 60 penalty units for contravention of obligations under subsection 19-40(1) which deals with higher education provider compliance with tuition assurance requirements. This mirrors arrangements currently in place in for VSL.

The current requirements ensure that students get a refund of their fees or are placed in a similar course with another provider. This measure is intended to enhance protections for students where a provider is no longer able to offer the course of study in which the student is enrolled, for example if it loses its TEQSA accreditation.

Item 12 - After section 19-40

Section 19-42 - Assessment of students as academically suited

This item inserts a new section 19-42 into HESA after section 19-40.

Before enrolling a student in a unit of study, a student must have been assessed by the higher education provider as being academically suited to undertake the unit in question (subsection 19-42(1)). Contravention of this subsection attracts a civil penalty of 120 penalty units to reflect the serious nature of the contravention and deter such conduct.

Subsection 19-42(2) provides that this assessment must be done in accordance with any requirements set out in the Higher Education Provider Guidelines.

This provision is intended to deter any less scrupulous providers from undertaking on behalf of students, or assisting students to complete, the academic suitability assessments. For example, if a student does not have adequate English language skills to undertake higher education, they may not be academically suitable for a particular course of study. It is an important policy imperative to ensure students do not incur debts for units of study which are beyond their academic capability. This is reflected in the imposition of a civil penalty of 120 penalty units for contravention of section 19-42(1). The measure ensures that higher education providers are only enrolling students who have skills and capabilities which are aligned and commensurate to the chosen academic undertaking.

Item 13 - At the end of subsection 19-45(5)

Section 19-45 provides that a higher education provider must have a grievance procedure dealing with complaints by the provider's students relating to academic matters and a review procedure for dealing with review of decisions made by the provider under Chapter 3 of HESA.

Subsection 19-45(5) provides that the provider must comply with its grievance and review procedures.

This item provides for the imposition of a civil penalty of 60 penalty units if a provider fails to comply with its obligations under subsection 19-45(5). This is consistent with VSL arrangements legislated in 2016.

Item 14 - At the end of section 19-70

Subsection 19-70(1) provides that higher education providers must, if notified to do so in writing, give the Minister any requested statistical and other information relating to the provision of higher education by the provider, and compliance by the provider with the requirements under HESA.

This item inserts a new subsection 19-70(4) imposing a civil penalty provision of 60 penalty units if a higher education provider fails to met information management or compliance obligations specified under section 19-70. This mirrors arrangements currently in place for VSL.

Item 15 - After section 19-70

This item inserts new sections which impose additional obligations on higher education providers that are intended to ensure the integrity of the Australian higher education sector.

Section 19-71 - Co-operation with HESA and TEQSA investigators

New subsection 19-71(1) provides that a higher education provider must co-operate with HESA investigators and TEQSA investigators who are performing functions or exercising powers under HESA, and must not obstruct or hinder a HESA investigator or a TEQSA investigator who is performing functions or exercising powers under HESA. A failure to comply with this subsection attracts a civil penalty of 60 penalty units (subsection 19-71(2)).

The purpose of subsection 19-71(1) is to ensure higher education providers co-operate with HESA inspectors and TEQSA inspectors where these officials are performing statutory functions or exercising powers under HESA. In addition to the positive obligation to co-operate with HESA and TEQSA inspectors, higher education providers must conversely not obstruct or hinder inspectors in exercising their powers or performing their functions under HESA.

Section 19-72 - Providers must keep records

New section 19-72 provides that higher education providers must keep records of a kind, in the manner and for the period specified in the Higher Education Provider Guidelines. Contravention by a provider attracts a civil penalty of 60 penalty units (subsection 19-71(2)).

Details as to record keeping and record retention obligations are best set out in the Guidelines. This is because these requirements are technical and prescriptive in nature, yet there needs to be an ability to flexibly and efficiently revise record management frameworks in order to adapt to regulatory settings and add rigour. These matters are appropriate for subordinate legislation as they include the detail underpinning the primary provisions imposing the obligation. They are not procedural matters that go to the essence of the legislative scheme nor do the record keeping obligations in the Guidelines purport to create offences, confer enforceable rights, impose primary obligations or otherwise affect the operation of the primary legislation.

Section 19-73 - Providers must publish information

New subsection 19-73(1) provides that a higher education provider must publish information of the kind, in the manner and within the period specified in the Higher Education Provider Guidelines. A failure to comply with this subsection attracts a civil penalty of 60 penalty units (subsection 19-73(2)).

Including details as to information type, manner of publication and logistics around compliance with technical requirements in subordinate legislation provides both flexibility in the implementation of the policy and scope for adaptability in light of industry requirements (while still being subject to scrutiny and Parliamentary oversight). Guidelines are the preferable legislative vehicle for setting out such matters.

Items 16 and 17- At the end of 19-75, 19-77 and 19-78(1)

Section 19-75 requires a higher education provider to notify the Minister of any event affecting the provider (or related body corporate of the provider) that may affect the provider's capacity to meet the conditions of grants under Chapter 2 or the quality and accountability requirements.

Section 19-77 requires a higher education provider to notify the Minister of any event affecting the provider; or a related body corporate of the provider; or that relates to the provider's authority to accredit courses of study leading to higher education awards; or the accreditation by a government accreditation authority, of such courses offered by the provider.

Subsection 19-78(1) provides that a higher education provider must inform the Minister of any event significantly affecting the provider or a related body corporate of the provider that relates to the provider's registration by TEQSA as a registered higher education provider.

Items 16 and 17 amend sections 19-75 and 19-77 and subsection 19-78(1) to provide that contravention by a provider of its obligations under those provisions carries a civil penalty of 60 penalty units. This is consistent with arrangements for VSL.

The compliance obligations contained in these provisions are now subject to civil penalties as a deterrent to non-compliance by higher education providers in relation to functions linked to the probity and accountability of their operations. This also reflects the seriousness with which the Government and the community view conduct, which goes to the integrity of grant allocations and the continuing effective performance and operation of approved higher education providers.

Item 18 - After subsection 19-80(3)

This item adds a new subsection 19-80(3A) which provides that if a higher education provider is being audited under section 19-80, a failure to fully co-operate with the auditing body in the course of the audit is a contravention which carries a civil penalty of 60 penalty units. This mirrors penalties applicable under VSL.

Item 19 - Subsection 19-82(4)

This item repeals existing subsection 19-82(4) (dealing with compliance notices) and substitutes a new subsection (4) which similarly provides that a higher education provider must comply with a compliance notice given under section 19-82, but changes the treatment of a breach of compliance in this context.

The effect of this change is that a failure to comply with a compliance notice can now be sanctioned by way of the imposition of a civil penalty of 60 penalty units in addition to it being dealt with as a breach of a quality and accountability requirement potentially leading to the suspension or revocation of the provider's approval in accordance with sections 22-15 and 22-30. This amendment is consistent with reforms under the Bill to enhance the compliance and regulatory frameworks of the sector and align with the policy to extend civil penalty provisions to compliance obligations more broadly. Note that failure to comply with a compliance notice will still be a failure to comply with a quality and accountability requirement, and can still be dealt with under sections 22-15 and 22-30 of HESA.

These arrangements are consistent with VSL.

Item 20 - At the end of subsection 19-95(2)

This item provides that a failure to comply with the requirement to provide specified information in the provider's schedule of student contribution amounts for places and tuition fees for all the units of study it provides or proposes to provide in accordance with the Higher Education Provider Guidelines for the purposes of subsection 19-95(2) is a contravention which carries a civil penalty of 60 penalty units. This is consistent with VSL arrangements legislated in 2016.

This measure ensures that providers have a strong deterrent from hiding, failing to publish or otherwise not providing information on their tuition fees to prospective students. Fully informed students are able to make better choices in relation to their study and to any HELP loans they agree to incur.

Item 21 - At the end of subsection 19-95(3)

This item provides that a failure by a provider to comply with the requirement under subsection 19-95(3) to withdraw and replace a previous schedule of student contribution amounts for places and tuition fees where that provider has varied a student contribution amount or a tuition fee in that schedule and submitted it to the Minister is a contravention of section 19-95 which carries a civil penalty of 60 penalty units. This mirrors arrangements currently in place for VSL.

Items 22, 23, 24, 25 - Amendments to subsection 104-1

These items make amendments to subsection 104-1 to ensure that only genuine and competent students are entitled to FEE-HELP assistance under HESA.

Item 22 - Subsection 104-1(1)

This item inserts reference to the new section 104-1A (inserted by item 26) in subsection 104-1(1), with the effect that a student is not entitled to FEE-HELP assistance in the circumstances set out in section 104-1A.

Item 23 - After paragraph 104-1(1)(a)

This item inserts new paragraphs 104-1(ab) and (ac), which set out two new mandatory requirements for a student to be entitled to FEE-HELP assistance for a unit of study. In order to be entitled to FEE HELP assistance, a student must:

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be a genuine student (by reference to matters specified in the Higher Education Provider Guidelines) (new paragraph 104-1(1)(ab))

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have been assessed by the higher education provider as being academically suited to undertake the particular unit of study (new paragraph 104-1(1)(ac)).

The purpose of this amendment is to ensure that a person's ability to satisfy the genuine student criteria (as determined in accordance with new section 104-43) and their academic suitability to undertake a particular unit of study are now factors in order for a person to be entitled to FEE-HELP assistance for a unit of study under section 104-1(1).

This is consistent with VSL arrangements legislated in 2016.

Item 24 - After subsection 104-1(1)

This item inserts new subsections 104-1(1A) and (1B) in section 104-1, which are intended to assist the Minister to determine a genuine student and to determine whether the student has been properly assessed for academic suitability for the purposes of new paragraphs 104-1(1)(ab) and 104-1(1)(ac) respectively.

New subsection 104-1(1A) provides that, in determining whether a student is a 'genuine student', regard may be had to the matters (if any) specified in the Higher Education Provider Guidelines. The definition of genuine student to be contained in the Higher Education Provider Guidelines will be broadly equivalent to the definition of 'genuine student' in section 5 of the VET Student Loans Rules, and will include considerations such as level of engagement with course content or materials, demonstrated knowledge of the course, its content and duration, and satisfying prerequisites for entry into the course.

The genuine student arrangements are consistent with VSL provisions legislated in 2016.

New subsection 104-1(1B) provides that a student's academic suitability to undertake a particular course must be done in accordance with the Higher Education Provider Guidelines, as required by new section 19-42 (see item 12).

These requirements are a further safeguard and deterrent against opportunistic and disingenuous enrolment of people by higher education providers in courses for reasons other than genuine pursuit of a course of study and learning pathway. This will protect vulnerable students who do not have the academic capability to undertake a particular unit from being burdened with a significant FEE HELP debt with limited or no educational or training outcome.

Item 25 - At the end of section 104-1

This item inserts two new subsections 104-1(3) and (4) which impose additional restrictions on a student's entitlement to FEE-HELP assistance.

Firstly, under new subsection 104-1(3) a student is not entitled to FEE-HELP assistance for a unit of study provided, or to be provided, by a higher education provider once the provider has reached a limit of students or FEE-HELP assistance payable - for example, under conditions imposed under section 16-60 (see item 6).

The purpose of expressly limiting FEE-HELP entitlement (both in terms of the number of qualifying students and total amount of assistance funding conferred to the provider for student allocation) and not permitting a student to obtain FEE-HELP assistance once a nominated limit has been reached is to ensure FEE-HELP assistance is directed to eligible students.

Secondly, under new subsection 104-1(4) a student is not entitled to FEE-HELP assistance for a unit of study if a higher education provider completes any part of the student's request for Commonwealth assistance that the student is required to complete (see new section 19-36E inserted by item 10). This is consistent with VSL arrangements.

The purpose of new subsection 104-1(4) is to actively discourage higher education providers from completing any part of the application for Commonwealth assistance that the student is required to complete. Not only will such conduct attract a civil penalty of 60 penalty units under section 19-36E, but the student will not be entitled to any FEE-HELP assistance, meaning the provider will not financially benefit from the enrolment.

The measure is intended to proactively prevent and countermand issues which arose historically in the context of VET student loans, where less scrupulous providers completed students' requests for VFH assistance without the student being fully aware of the details or their loan commitments. Notably, the limitation on eligibility contained in subsection 104-1(4) applies to units of study in the particular course of study with the provider in question. The provision does not impede students' ability to enrol at a different provider, or in a different course of study in the future (subject to eligibility requirements under HESA).

Item 26 - After Section 104-1

This item inserts a new section 104-1A after section 104-1. New section 104-1A will make a student's entitlement to FEE-HELP assistance for a later unit of study at a provider contingent on student's successful completion of a certain number of earlier units of study at that provider.

Paragraph 104-1A(1)(a) provides that a student is not entitled to FEE-HELP assistance for a unit of study provided by a provider that is part of a course of study leading to the award of a bachelors degree or higher qualification where the student has already undertaken 8 or more other units of study with that provider and has not successfully completed at least 50% of those other units.

Paragraph 104-1A(1)(b) provides that a student is not entitled to FEE-HELP assistance for a unit of study provided by a provider (other than one referred to in paragraph (a)) where the student has already undertaken 4 or more other units of study with that provider and has not successfully complete at least 50% of those other units.

Subsection 104-1A(2) provides that the study completion requirement will not apply if a student applies in writing for an exemption from the requirement under subsection 104-1A(1) and the higher education provider is satisfied that special circumstances apply to the student (see section 104-30).

Similar arrangements are currently in place for VSL.

Item 27 - Subsection 104-10(4)

This item repeals subsection 104-10(4) which provides that a determination by the Minister under subsection 104-10(2) in relation to courses for which FEE-HELP assistance will be available must not be made later than 6 months before the day that students are able next to commence the specified course, or courses, with the provider.

Subsection 104-10(4) is being repealed because the common practice of enrolling students throughout the year means that the Minister may effectively never make such a determination. In making any determination that a specified course is not eligible for FEE-HELP, the Minister must still have regard to the effect of the determination on students undertaking the course or courses under subsection 104-10(3).

Item 28 - Subsection 104-30(1)

This item amends subsection 104-30(1) (which sets out the special circumstances requirements for HECS-HELP fee remission) consequential to the enactment of section 104-1A (see item 26).

The effect of this amendment is to make a referencing change to subsection 104-30(1) to include a reference to paragraph 104-1A(2)(b). This amendment will ensure that the special circumstances considerations contained in section 104-30 apply equally to the exemption contained in section 104-1A(2)(b) whereby a student will not be disentitled to FEE-HELP assistance where that student has failed to complete previous units of study with that higher education provider where they have applied for an exemption from the application of 104-1A(1) and special circumstances apply to that student.

Item 29 - At the end of Subdivision 104-B of Division 104

This item inserts new sections 104-43 and 104-44 into Subdivision 104-B of Division 104 of HESA.

Section 104-43 - Re-crediting a person's FEE-HELP balance if not a genuine student

New section 104-43 provides that a higher education provider must, on the Secretary's behalf, re-credit a person's FEE-HELP balance if the Secretary is satisfied that the person is not a genuine student. The amount re-credited is the amounts of FEE-HELP assistance that the student received for the unit of study provided by the provider.

The note accompanying section 104-43 clarifies that a FEE-HELP debt relating to a unit of study will be remitted if the FEE-HELP balance in relation to the unit is re-credited: see subsection 137-10(4).

The Secretary can re-credit a person's FEE-HELP balance if the provider is unable to do so.

The factors relevant to the determination of whether a student is a genuine student will be addressed in the Higher Education Provider Guidelines (see item 24).

To further the broader objective of enhancing the integrity and accountability of the sector, the purpose of this provision is to ensure that FEE-HELP assistance is provided to genuine students legitimately intending to pursue higher education. Enabling the Secretary to re-credit a student's FEE-HELP balance if the student is not a genuine student should deter providers from enrolling students in higher education course where such students have little or no real interest in undertaking the course. Similar arrangements are currently in place for VSL.

Section 104-44 - Re-crediting a person's FEE-HELP balance if provider completes request for assistance etc.

New section 104-44 sets out a number of other circumstances in which a higher education provider must recredit a person's FEE-HELP balance for FEE-HELP assistance received by the person for a unit of study provided by the provider where:

•

the provider has completed any part of the request for Commonwealth assistance in relation to the unit that the student is required to complete (subsection (1))

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the Secretary is satisfied that the student was not entitled to FEE-HELP assistance for the unit (subsection (2))

•

the student has not been assessed by the provider as academically suited to undertake the unit (subsection (3)).

The Secretary can re-credit a person's FEE-HELP balance in these circumstances if the provider is unable to do so (subsection (4)).

A note to subsection 104-44(1) clarifies that a FEE-HELP debt relating to a unit of study will be remitted if the FEE-HELP balance in relation to the unit is re-credited under this section: see subsection 137-10(4). Similar arrangements are currently in place for VSL.

Items 30 and 31 - Subsections 110-5(1) and 137-10(4)

Subsection 110-5(1) provides that if a higher education provider re-credits a person's FEE-HELP balance with an amount relating to FEE-HELP assistance for a unit of study, the provider must pay to the Commonwealth an amount equal to the amount of FEE-HELP assistance to which the person was entitled for the unit.

Subsection 137-10(4) provides that a person's FEE-HELP debt is remitted if the person's FEE-HELP balance is re-credited.

These items amend subsections 110-5(1) and 137-10(4) as a consequence of the insertion of new sections 104-43 and 104-44 (see item 28).

Item 32 - At the end of section 159-1

This item amends the guide to Chapter 5 of HESA to add a new dot point relating to the application of the Regulatory Powers Act to HESA (see new Part 5-8 inserted by item 37).

Item 33 - After subsection 164-10(1)

This item inserts new subsection 164-10 (1AA) which provides that the Secretary may vary or revoke a determination made under subsection 164-10(1).

This will allow variations in relation to amounts payable in advance to providers to be made, or for the determination that funds are payable in advance to be revoked. This will limit the exposure of Government funds, and limit the creation of false student loan debt, where a determination has been made that a proportion of a provider's students are non-genuine students. This measure will ensure funding is only directed to providers with students actively engaged in study.

Item 34 - After section 169-15

This item inserts new section 169-17 after section 169-15 of HESA.

Section 169-17 - Requirements relating to withdrawal from units of study

New section 169-17 provides that the Higher Education Provider Guidelines may prescribe requirements to be complied with by higher education providers in relation to student withdrawal from units of study (subsection 169-17(1)).

Subsection 169-17(2) provides that the Higher Education Provider Guidelines can:

•

require that fees (however described) must not be charged by higher education providers for withdrawal, either generally or in specified circumstance

•

specify requirements to be met in relation to reenrolment after withdrawal

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specify requirements in relation to establishing and operating processes and procedures dealing with student withdrawal from units of study.

Subsection 169-17(3) provides that a higher education provider that fails to comply with a requirement prescribed under subsection 169-17(1) contravenes the subsection and is subject to a civil penalty of 120 penalty units, reflecting the serious nature of the contravention and as a deterrent to such conduct.

The policy intent of section 169-17 is to explicitly prohibit higher education providers creating financial barriers for students to withdraw from a course. This is consistent with arrangements for VSL.

The Higher Education Provider Guidelines will be amended to prescribe the processes and procedures that a provider must have in place for a student to withdraw from a course of study (equivalent to those contained in section 86 of the VET Student Loans Rules). For example, a provider's processes and procedures must include:

•

procedures for a student to withdraw from a course of study, or unit of study

•

a procedure for a student to enrol in a part of a course of study with the provider in circumstances where the student had earlier withdrawn from a part of the course undertaken with the provider.

The procedures for a student to withdraw from a course of study, or unit of study, before a census day for the course, or the unit, must not involve financial, administrative or other barriers to the withdrawal.

If a student withdraws from a course of study, or unit of study, the course provider must not, after the withdrawal, enrol the student in a course of study or unit of study without the written permission of the student (which must be given after the withdrawal).

Item 35 - At the end of subsections 169-25(3) and (4)

Section 169-25 provides that a higher education provider must, for each unit of study it provides or proposes to provide during a year, determine the census date and EFTSL value for the unit. This includes requirements around the publication of the census date and EFTSL value for the unit in accordance with the Administration Guidelines. The provider must also obtain written approval from the Minister to vary the census date or EFTSL for the unit after publication.

This item provides that a failure by a higher education provider to comply with requirements under section 169-25 will be a contravention of the section attracting a civil penalty of 60 penalty units. This mirrors VSL arrangements legislated in 2016.

Item 36 - After subsection 174-5(1)

This item inserts new section 174-5(1A) which provides for the imposition of a civil penalty if a higher education provider is subject to a requirement under section 174-5(1) and fails to comply with any of the requirements specified under that subsection. Contravention of section 174-5(1A) attracts a civil penalty of 60 penalty units. This is consistent with the VSL arrangements legislated in 2016.

Subsection 174-5(1) provides that the Administration Guidelines may require or permit information or documents to be given by a student to a higher education provider (or a provider to a student) in accordance with particular information technology requirements on a particular kind of data storage device or by means of a particular kind of electronic communication.

This subsection is intended to facilitate appropriate, consistent and reliable electronic communication and ensure that information is able to be conveyed and received effectively, and with a strong deterrent for failure to comply.

Item 37 - New Part 5-8

This item inserts a new Part 5-8 entitled 'Regulatory Powers' in Chapter 5 of HESA.

Part 5-8 triggers all of the powers in the Regulatory Powers Act in relation to HESA. The Regulatory Powers Act provides for a standard suite of provisions in relation to monitoring and investigation powers, as well as enforcement provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions.

The regulatory powers are in addition to the wide variety of mechanisms HESA (as amended by this Bill) provides the Minister with to maintain the integrity of the higher education assistance program, and to monitor and enforce compliance by approved higher education providers. For example, the Minister can impose conditions on provider approvals, suspend and revoke provider approvals, issue compliance notices and require a compliance audit of a provider. Under Part 3, the Minister can manage payments of Commonwealth assistance loan amounts to providers, and require repayment of FEE HELP assistance amounts.

The Regulatory Powers Act has been triggered by the Bill to ensure that the department and TEQSA have an appropriate framework and powers for monitoring compliance and purported compliance with the new civil penalty provisions, and that information given in compliance or purported compliance with the civil penalty provisions, is appropriately subject to monitoring.

The Bill also extends the powers of HESA and TEQSA investigators with respect to monitoring and investigation of provider compliance activities. The Bill does this by making the civil penalty provisions and compliance obligations subject to monitoring by HESA and TEQSA investigators under Part 2 (Monitoring) of the Regulatory Powers Act. Similarly, the civil penalty provisions are also made subject to investigation under Part 3 (Investigation) of the Regulatory Powers Act by HESA and TEQSA investigators.

Triggering the Regulatory Powers Act ensures that HESA and TEQSA investigators have sufficient monitoring and investigation capabilities under HESA to monitor and investigate compliance and purported compliance with respect to the civil penalties provisions inserted by the Bill, which are enforceable by recourse to Part 4 of the Regulatory Powers Act.

By triggering the Regulatory Powers Act, the new monitoring and investigation capabilities provide greater scope for the department to access, or, if necessary, seize relevant information in cases of suspected non-compliance.

These powers are in addition to the variety of compliance mechanisms under HESA and introduced by this Bill. However, the regulatory powers provisions as incorporated allow for monitoring and investigation powers, as well as the use of civil penalty provisions, with the attendant safeguards to the exercise of those powers that apply under the Regulatory Powers Act. These additional powers ensure that the department is able to take effective action in cases of non-compliance beyond revocation of approval and, therefore, mitigate loss of Commonwealth funding.

Application of the Regulatory Powers Act is consistent with the VSL arrangements legislated in 2016.

Part 5-8 - Regulatory Powers

Section 215-1 - What this Part is about

Section 215-1 provides a general guide to the content of new Part 5-8 of HESA.

Section 215-5 - Monitoring powers

Section 215-5 provides HESA investigators and TEQSA investigators with monitoring powers by triggering Part 2 of the Regulatory Powers Act. It provides that the Bill is subject to monitoring under Part 2 of the Regulatory Powers Act, as is any information given in compliance or purported compliance with a provision of this Bill.

Part 2 of the Regulatory Powers Act creates a framework for monitoring whether this Bill has been complied with and whether information given in compliance or purported compliance with the Bill is correct. Part 2 of the Regulatory Powers Act includes powers of entry and inspection.

Subsection 215-5(3) defines the persons and positions that are granted functions and powers under Part 2 of the Regulatory Powers Act:

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HESA investigators and TEQSA investigators are authorised applicants and authorised persons

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a judicial officer (as defined in HESA) is an issuing officer

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the Secretary is the relevant chief executive for HESA investigators, and the TEQSA Commissioner is the relevant chief executive for TEQSA investigators

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each applicable court (as defined in HESA) is a relevant court.

Subsection 215-5(4) enables HESA investigators and TEQSA investigators to be assisted by other persons when exercising powers or performing functions or duties under Part 2 of the Regulatory Powers Act in relation to this Bill. HESA investigators and NVETR investigators are appointed under section 215-35.

Section 215-10 - Investigation powers

This section provides HESA investigators and TEQSA investigators with investigation powers by triggering Part 3 of the Regulatory Powers Act.

Any offence or civil penalty provision under this Bill, or an offence against the Crimes Act or the Criminal Code that relates to this Bill, will be subject to investigation under Part 3 of the Regulatory Powers Act.

Part 3 of the Regulatory Powers Act creates a framework for gathering material relating to the contravention of offence and civil penalty provisions. It includes powers of entry, search and seizure.

Subsection 215-10(2) defines the persons and positions that are granted functions and powers under Part 3 of the Regulatory Powers Act:

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HESA investigators and TEQSA investigators are authorised applicants and authorised persons

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a judicial officer (as defined in HESA) is an issuing officer

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the Secretary is the relevant chief executive for HESA investigators, and the TEQSA Commissioner is the relevant chief executive for TEQSA investigators

•

each applicable court (as defined in HESA) is a relevant court.

Subsection 215-10(3) enables HESA investigators and TEQSA investigators to be assisted by other persons in exercising powers or performing functions or duties under Part 3 of the Regulatory Powers Act in relation to HESA.

Section 215-15 - Civil penalty provisions

This section provides that each civil penalty provision of the Bill is enforceable under Part 4 of the Regulatory Powers Act. Part 4 of that Act allows a civil penalty provision to be enforced by obtaining an order for a person to pay a pecuniary penalty for the contravention of the provision.

Subsection 215-15(2) specifies who are the authorised applicants and which are relevant courts for the purposes of Part 4 of the Regulatory Powers Act as it applies in relation to HESA.

Section 215-20 - Infringement notices

Section 215-20 provides that a civil penalty provision of HESA is subject to an infringement notice under Part 5 of the Regulatory Powers Act.

Note 1 clarifies that Part 5 of that Act creates a framework for using infringement notices in relation to provisions. Note 2 clarifies that Schedule 1A of HESA contains separate monitoring and investigation powers in relation to matters deal with in the Schedule (see Subdivision 5A-B of Schedule 1A).

A person who is given an infringement notice can choose to pay the amount specified as an alternative to having court proceedings brought against them for the contravention.

Subsection 215-20(2) defines the persons and positions that are granted functions and powers under Part 5 of the Regulatory Powers Act:

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SES employees and Executive Level 2 employees of TEQSA, and SES employees of the Department are infringement officers

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the TEQSA Commissioner is the relevant chief executive for TEQSA employees and the Secretary is the relevant chief executive for HESA employees.

Section 215-25 - Enforceable undertakings

This section provides that the provisions of HESA are enforceable under Part 6 of the Regulatory Powers Act. Part 6 of the Regulatory Powers Act creates a framework for accepting and enforcing undertakings relating to compliance with statutory requirements.

Subsection 215-25(2) specifies who are the authorised persons and which are relevant courts for the purposes of Part 6 of the Regulatory Powers Act as it applies in relation to HESA.

Section 215-30 - Injunctions

This section provides that the provisions of HESA are enforceable under Part 7 of the Regulatory Powers Act. Part 7 of the Regulatory Powers Act creates a framework for using injunctions to enforce statutory requirements.

Subsection 215-30(2) specifies who are authorised persons and which are the relevant courts for the purposes of Part 7 of the Regulatory Powers Act.

This section enables injunctions (including interim injunctions) under Part 7 of the Regulatory Powers Act to be used to restrain a person from contravening a provision of this Bill, or to compel compliance with a provision of this Bill. This provides an additional tool with which the Commonwealth can enforce compliance with the Bill.

This provision is declaratory of the law and is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act, but is included to assist readers in the interpretation of the legislation and for the avoidance of doubt.

Section 215-35 - Appointment of investigators

This section provides that the Secretary and the Chief Executive Officer for TEQSA may appoint HESA investigators and TEQSA investigators respectively.

Prior to making an appointment, the appointer must be satisfied that the person to be appointed has appropriate and suitable knowledge or experience to properly exercise the powers of an investigator. For example, the person must understand their legal rights and obligations and the scope and limits of their powers. The person must also understand the functions and duties of an investigator. This is to ensure that investigators are able to carry out their role properly and effectively.

The section also specifies that an investigator must comply with any directions of the appointer in exercising the powers of an investigator. This is also intended to ensure that investigators carry out their functions and responsibilities appropriately.

This provision is declaratory of the law and is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act, but is included to assist readers in the interpretation of the legislation and for the avoidance of doubt.

Section 215-40 - Delegation of regulatory powers

This section enables the Secretary and the TEQSA Commissioners to delegate, in writing, their functions under the Regulatory Powers Act as it applies in relation to HESA.

The power to delegate ensures that regulatory powers under the Bill will be able to be carried out efficiently and effectively in an operational environment where the Secretary or a TEQSA Commissioner may not have the capacity to undertake all regulatory functions and powers conferred upon them by Part 5-8 of HESA.

In exercising powers or performing functions under a delegation, a delegate must comply with any directions of the delegator (subsection 215-40(3)). This limitation is to ensure that there are appropriate constraints on the delegate's exercise of the regulatory powers. An instrument that is a direction to a delegate is not a class of instrument that is a legislative instrument pursuant to section 6(1) of the Legislation (Exemptions and Other Matters) Regulation 2015.

Section 215-45 - Contravening offence and civil penalty provisions

This section clarifies that, if a provision of HESA provides that a person contravening another provision of HESA ('conduct provision') commits an offence or is liable to a civil penalty, then for the purposes of this Bill, and the Regulatory Powers Act (to the extent it relates to HESA), a reference to a contravention of an offence or civil penalty provision includes a reference to a contravention of the conduct provision. Therefore, the person would have contravened both the conduct provision and the offence or civil penalty provision.

This is to avoid having to expressly provide in each instance that a contravention of the offence or civil penalty provision is also a contravention of the conduct provision.

Section 215-50 - Certain references to higher education provider include references to agent

This section provides that a reference in a civil penalty provision to a higher education provider includes a reference to a person acting on behalf of the higher education provider.

This provision extends the application of the civil penalty provisions to persons such as agents or associates who may be acting for a financial gain or other incentive on behalf of the higher education provider.

This section is intended to operate inclusively, so, depending on the circumstances, the civil penalty provisions could apply to either or both the higher education provider, or a person acting on behalf of the higher education provider.

Section 215-55 - Other enforcement action

This section is an avoidance of doubt provision which clarifies that taking action under Part 5-8 of HESA does not prevent or limit the taking of action under any other provision of HESA.

Item 38 - Before section 238-1

This item inserts a new section 238-1A titled 'Giving false or misleading information' before section 238-1 of HESA.

New section 238-1A provides that a person is liable for a civil penalty if the person provides false or misleading information or documents under HESA or if the person omits any matter or thing without which the information or document is misleading. This provision would apply, for example, to information provided by a higher education provider to a student that misrepresents a HELP loan as Government support that a student does not have to repay, or information provided by a higher education provider to the department in respect of non-genuine students.

It will not be a contravention of this section if the information or document provided is not false or misleading in a material particular. False or misleading information or documents relating to a material particular means false or misleading information or documents which are not trivial or inconsequential.

The maximum civil penalty for a contravention is 60 penalty units. It is important to ensure persons (including students, the Minister and Secretary) have access to information that is relevant, reliable and correct for the effective administration of the higher education sector. This mirrors the VSL arrangements legislated in 2016.

Item 39 - Subsection 238-10(1) (table item 6)

This item makes a machinery change to subsection 238-10(1) to ensure that the definition of genuine student in the Higher Education Provider Guidelines is incorporated by inserting new section 104-1 after Part 2-1 into table item 6 in the Chapter/Part/Section column.

Items 40, 41, 42 and 43

These items amend or insert definitions into the Dictionary of HESA (Schedule 1), as a consequence of the amendments made by other items in Schedule 3 to the Bill.

Item 41 inserts a new definition of HESA investigator. The term HESA investigator means a person appointed under new section 215-30.

Item 42 repeals paragraphs (a) to (c) of the definition of qualified auditor which provided that a qualified auditor includes the Auditor-General of a State, of the Australian Capital Territory or of the Northern Territory; or a person registered as a company auditor or a public accountant under a law in force in a State, the Australian Capital Territory or the Northern Territory; or a member of the Institute of Chartered Accountants in Australia, or of the Australian Society of Certified Practising Accountants.

A qualified auditor is now defined as a registered company auditor (within the meaning of the Corporations Act) (inserted by new paragraph (a)) and a person approved by the Minister in writing as a qualified auditor for the purposes of this Act (existing paragraph (d) of the definition).

Item 43 inserts a new definition of TEQSA investigator, which means a person appointed under section 215-35.

Part 2-Application provisions

The amendments only apply to providers approved under section 16-25 of HESA.

Analysis by the department has shown that universities listed in Tables A, B and C of HESA, and providers approved under section 16-25 of HESA present significantly different risk profiles. Universities traditionally have stable administrative structures and business models, while many higher education providers restructure or change ownership. While this enables some higher education providers approved under section 16-25 to be more flexible and responsive to market needs or business requirements, large staff turnover or new management is likely to present compliance risks.

Additionally, there is evidence that, as a cohort, the ability of providers approved under section 16-25 of HESA to deliver courses is significantly lower. Students enrolled at providers approved under section 16-25 generally have lower completion rates, and take longer to complete their degrees when compared to students enrolled in the same course of study at a university listed in a Table of HESA.

Further, there is evidence to suggest that providers who previously gained approval under the VET FEE-HELP program and lost approval upon the transition to VSL are now seeking approval as higher education providers under section 16-25 of HESA. Should they gain approval, stronger regulatory powers, including enhanced monitoring capabilities, should be sufficient to ensure that similar unscrupulous behaviour does not occur in the higher education sector.

Item 44 - Application of amendments

Item 44 inserts Part 2 setting out the application provisions relating to measures contained in HESA amended by Schedule 3 to this Bill.

Subitem 44(1) provides that the amendments to section 16-25 of HESA made by Schedule 3 apply in relation to:

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applications for approval by providers made after the commencement of Schedule 3

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applications for approval by providers made before the commencement of this Schedule but not decided before that commencement date.

Subitem 44(2) provides that the amendments of sections 19-10 and 19-12 of HESA made by Schedule 3 will apply in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of Schedule 3.

Subitem 44(3) provides that new sections 19-36 to 19-36E of HESA inserted by Schedule 3 will apply on and after 1 January 2018 in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(4) provides that the amendments to sections 19-40, 19-45 and 19-70 of HESA made by Schedule 3 will apply in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(5) provides that the new section 19-42 of HESA inserted by Schedule 3 will apply in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(6) provides that new sections 19-71 to 19-73 of HESA as inserted by Schedule 3, will apply in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(7) provides that the amendments of sections 19-75, 19-77, 19-78, 19-80, 19-82 and 19-95 of HESA made by Schedule 3 will apply in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(8) provides that section 104-1 of HESA made by Schedule 3 will apply in relation to a unit of study if:

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the unit of study is undertaken as part of a course of study

•

the student enrolled in the course of study on or after 1 January 2018

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the unit of study has a census date that occurs on or after 1 January 2018

•

the unit is provided by a higher education provider approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(9) provides that section 104-1A of HESA as inserted by Schedule 3 will apply in relation to a unit of study if:

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the unit of study is undertaken as part of a course of study

•

the student enrolled in the course of study on or after 1 January 2018

•

the unit of study has a census date that occurs on or after 1 January 2018

•

the unit is provided by a higher education provider approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(10) provides that sections 104-43 and 104-44 of HESA, as inserted by Schedule 3, will apply in relation to higher education providers approved under section 16-25, whether approved before or after the commencement of this Schedule.

Subitem 44(11) provides that section 169-17 of HESA, as inserted by Schedule 3, applies in relation to students enrolled in units of study:

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with census dates that occur on or after the commencement of the Schedule (whether the units of study are part of a course commenced before or after that commencement)

•

that are provided by higher education providers approved under section 16-25, whether approved before or after the commencement of the Schedule.

Subitem 44(12) provides that amendments to sections 169-25 and 174-5 of HESA made by Schedule 3 will apply in relation to providers approved under section 16-25, whether those providers were approved before or after the commencement of this Schedule.

Subitem 44(13) provides that the amendment of the definition of 'qualified auditor' in subclause 1(1) of Schedule 1 of HESA made by Schedule 3 applies in relation to financial statements provided for annual financial reporting periods that commence on or after 1 July 2018.