Explanatory Memorandum
(Circulated by authority of the Minister for Small and Family Business, Skills and Vocational Education, Senator the Hon Michaelia Cash)Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Higher Education Support Amendment (VET FEE-HELP Student Protection) Bill 2018
The Higher Education Support Amendment (VET FEE-HELP Student Protection) Bill 2018 is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The purpose of this Bill is to provide a remedy for students who incurred debts under the VET FEE-HELP loan scheme as a result of inappropriate conduct by training providers or their agents.
The VET FEE-HELP loan scheme, contained in Schedule 1A to the Higher Education Support Act 2003 (HESA), operated from 2009 to 2016 assisting students with the cost of their studies through a loan with income contingent repayment arrangements. Following its commencement, where the focus was on supporting pathways into higher education, VET FEE-HELP was expanded in late 2012 and the requirement for a pathway to higher education was abolished. The decision to expand the scheme was weighted heavily towards supporting growth in the VET sector, but did not provide sufficient safeguards for students or regulatory powers for the Government. Instead, it provided incentives and rewards for unethical behaviour and misuse of student entitlements.
Under the VET FEE-HELP loan scheme, a number of unscrupulous training providers and their agents targeted vulnerable people. Those targeted were signed up to courses which they may not have had the academic capability or means to complete and may not have understood they were receiving a loan from the Commonwealth that needed to be repaid. Some students were not aware they had signed up to training and were not aware of debts they had incurred. As a result, the scheme left many students with large debts and in some cases little to no training outcomes.
Since 2015, the Commonwealth has progressively strengthened protection for students who are using the VET FEE-HELP loan scheme. The Commonwealth introduced a range of initial reforms through the Higher Education Support Amendment (VET FEE-HELP Reform) Act 2015. In particular, students could have their VET FEE-HELP debts remitted for unacceptable conduct by VET providers (or their agents) that occurred on or after 1 January 2016. The Commonwealth replaced the VET FEE-HELP loan scheme with the vastly improved VET Student Loans program from 1 January 2017. Some continuing students accessed VET FEE-HELP under grandfathering arrangements during 2017 and 2018.
On 1 July 2017, the Commonwealth also established the VET Student Loans Ombudsman (VSLO). The establishment of the VSLO made available more data on the scale and detail of complaints, including making apparent that there are a significant number of individual cases which cannot currently be remedied under existing legislation.
The Bill introduces a broad remedy for students who incurred a VET FEE-HELP debt as a result of inappropriate conduct by VET providers or their agents by giving a discretionary power to the Secretary of the Department administered by the Minister administering HESA (currently, the Secretary of the Department of Education and Training). This discretionary power can be exercised to re-credit a person's FEE-HELP balance and remit the associated VET FEE-HELP debt if the VET FEE-HELP debt was incurred as a result of the inappropriate conduct of a VET provider or its agents. The Bill also provides the Commonwealth with the ability to recover the amount remitted from the VET provider, in limited circumstances.
To maximise the availability of a remedy to as many affected persons as possible and maximise the Commonwealth's ability to recover payments made to training providers after 1 January 2016, when the 2015 reforms came into effect, the new provisions would operate in addition to existing provisions in HESA relating to re-credits for unacceptable conduct by VET providers or their agents.
The Bill also amends the Ombudsman Act 1976 to reflect the VSLO's role under the new arrangements.
Summary of analysis
The Bill is compatible with human rights and, to the extent that it may limit human rights, the measures contained in this Bill are proportionate and justifiable.
As the remedy introduced in the Bill is discretionary, there is potential for some students to be ineligible for a remission of debt. However, this is justifiable as the Commonwealth needs to balance the legitimate cancellation of debts with the exclusion of students who completed their training and may opportunistically seek cancellation of their debts. In addition, the decision whether to remit a student's debt will be made having regard to matters prescribed in a legislative instrument relating to inappropriate conduct by VET providers or their agents, ensuring that decisions are made fairly and consistently.
Analysis of human rights implications
The Bill has implications for the following human rights:
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- the right to education - Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR)
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- the rights of the child - Article 3 of the Convention of the Rights of the Child (CRC)
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- the rights of people with disabilities - Article 10 of the Declaration on the Rights of Disabled Persons (DRDP).
Right to education
The Bill engages the right to education, which is set out in Article 13 of the ICESCR.
Article 13 recognises the important personal, societal, economic and intellectual benefits of education. Article 13 further sets out that secondary education in its different forms, including technical and vocational secondary education, shall be made generally available and accessible to all by every appropriate means.
The intent of the VET FEE-HELP loan scheme was to make technical and vocational secondary education more accessible to students who may not otherwise have had access to it. The actions of a small number of unscrupulous training providers and their agents have left many students with large debts and little to no training outcomes.
The measures in the Bill introduce a new remedy for students who sought out educational opportunities through the VET FEE-HELP loan scheme and incurred debts as a result of inappropriate conduct by VET providers or agents of those providers. Due to the inappropriate conduct of these providers and their agents, it is likely that affected students have a tainted view of education. The Bill seeks to provide a remedy to these students to restore their confidence and trust in the quality of the education and training system in Australia.
This Bill is compatible with the right to education.
Rights of the Child
The Bill engages the rights of the child, which are provided for in Article 3 of the CRC.
Article 3 provides that in all actions concerning children, whether undertaken by public or private social welfare institutions, courts of law, administrative authorities or legislative bodies, the best interests of the child shall be a primary consideration.
The measures in the Bill protect vulnerable children who may have experienced unscrupulous behaviour by training providers approved under the VET FEE-HELP loan scheme (or agents of those providers) by introducing a new remedy to ensure debts incurred as a result of this behaviour can be remitted.
Rights of Disabled Persons
Article 10 of the DRDP ensures that disabled persons shall be protected against all exploitation, all regulations and all treatment of a discriminatory, abusive or degrading nature. Further, Article 6 of the DRDP provides, in relevant part, that disabled persons have the right to education and vocational training to develop their capabilities and skills to the maximum and hasten the processes of their social integration or reintegration.
The Commonwealth is aware that the VET FEE-HELP scheme was plagued by some unethical provider or agent practices that resulted in vulnerable, including disabled, persons being taken advantage of.
The measures in the Bill seek to provide redress for those vulnerable students who were signed up to the VET FEE-HELP scheme and incurred a significant financial liability, without fully understanding the consequences of what they were signing up to. This Bill will help ensure that debts incurred as a result of the inappropriate conduct of providers or their agents can be remitted.
The Bill is compatible with the rights of disabled persons.
Conclusion
This Bill is compatible with human rights and, to the extent that it may limit human rights, the limitations are reasonable, necessary and proportionate.