House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Employment, Skills, Small and Family Business, Senator the Hon Michaelia Cash)

Schedule 1 - VET Student Loans tuition protection

Summary

Schedule 1 to the Bill comprises two parts. Part 1 sets out the main amendments to the VSL Act, which repeal all provisions in the VSL Act that relate to the existing tuition assurance arrangements and insert new provisions that provide for the new arrangements relating to tuition protection for students. Division 2 of Part 1 sets out the transitional provisions, which ensure the repealed provisions of the VSL Act continue to apply where courses were not delivered to completion before the commencement of Part 1. Part 2 sets out the consequential amendments to the ESOS Act.

Detailed explanation

Part 1 - Main amendments

Division 1 - Amendments

VET Student Loans Act 2016

Item 1 - Section 5

Item 1 inserts a short description of the proposed Part 5A and Part 5B of the VSL Act into the simplified outline in section 5 of the VSL Act. This outline is included to assist readers understand the substantive provisions of Part 5A and Part 5B of the Bill but is not intended to be comprehensive. Readers should rely on the substantive provisions.

Item 2 - Section 6

Item 3 - Section 6 (definition of approved tuition assurance arrangement )

Item 4 - Section 6

Item 5 - Section 6 (definition of officer of a tuition assurance scheme operator )

Item 6 - Section 6

Item 7 - Section 6 (definition of tuition assurance arrangement )

Item 8 - Section 6 (definition of tuition assurance scheme operator )

Item 9 - Section 6 (paragraph (d) of the definition of VET officer )

Item 10 - Section 6

These items amend section 6 of the VSL Act which contains definitions of terms and expressions used in the Act. The amendments insert new definitions required for the new arrangements relating to tuition protection and repeal those definitions consequential to the repeal of Division 4 of Part 4 of the Act and the concept of a tuition assurance arrangement.

More particularly, the definitions of the following are repealed: approved tuition assurance arrangement , officer of a tuition assurance scheme operator , tuition assurance arrangement , tuition assurance scheme operator and paragraph (d) of the definition of VET officer , which refers to an officer of a tuition assurance scheme operator that is a party to an approved tuition assurance arrangement.

The following definitions are inserted into section 6 of the VSL Act:

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affected part of an original course. This means a part of the original course that a student was enrolled in when the student's approved course provider defaulted in relation to the student;

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default is defined by reference to new section 66B which sets out the circumstances in which a provider defaults in relation to a student;

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Education Minister is defined to mean the Minister who administers the Education Services for Overseas Students Act 2000 - this definition is introduced predominantly for the purposes of proposed sections 66P and 66Q;

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eligible student is defined by reference to the existing section 9 of the VSL Act, which already contains a definition of this term;

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listed course provider is defined by reference to subsection 27(2) of the VSL Act, which already contains a definition of this term;

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original course means an approved course in relation to which an approved course provider has defaulted;

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replacement component means a part of a replacement course that replaces an affected part of an original course. As provided for in new section 66G, students cannot be charged for a replacement component if tuition fees have already been paid for the affected part of the original course;

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replacement course means an approved course that enables a student to finish an original course or a course that is equivalent to an original course;

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VSL Tuition Protection Director is defined by reference to new section 66M. The office of the VSL Tuition Protection Director will be held by the same person who holds the office of the TPS Director. The functions of the VSL Tuition Protection Director include administering tuition protection and managing the VSL Tuition Protection Fund;

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VSL Tuition Protection Fund means the VSL Tuition Protection Fund established by new section 66J;

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VSL Tuition Protection Fund Advisory Board means the VSL Tuition Protection Fund Advisory Board established by new section 66Q. The members of the VSL Tuition Protection Advisory Board are the members of the TPS Advisory Board;

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VSL tuition protection levy means the levy imposed under the proposed VET Student Loans (VSL Tuition Protection Levy) Act 2019.

Item 11 - Section 23

Item 11 repeals section 23 of the VSL Act. Section 23 sets out the circumstances when a tuition assurance scheme operator and an approved course provider are jointly and severally liable to pay a debt due to the Commonwealth. This change is consequential to the repeal of Division 4 of Part 4 and the concept of a tuition assurance arrangement.

Despite its repeal, subitem 42(2) of Division 2, Part 1 to Schedule 1 of the Bill preserves section 23 in relation to liabilities that arose before the commencement of Schedule 1.

Item 12 - Paragraph 25(2)(g)

Item 12 repeals paragraph 25(2)(g) of the VSL Act, which requires that a body must be a party to an approved tuition assurance arrangement to meet the course provider requirements. This amendment is consequential to the repeal of Division 4 of Part 4 and the concept of a tuition assurance arrangement.

Item 13 - Subsection 25(3)

Item 13 repeals subsection 25(3) of the VSL Act and substitutes a new subsection. This change is consequential to the amendment proposed by item 12 above such that it is no longer necessary for the Secretary to have the discretion to exempt a body from the requirement to be a party to an approved tuition assurance arrangement. The new subsection 25(3) retains the Secretary's discretion to exempt a body from the requirement in paragraph 25(2)(h) to be a member of an approved external dispute resolution scheme.

Item 14 - Section 39

This item repeals section 39 of the VSL Act and substitutes a new provision. This change will require the Secretary to notify not only the VET Regulator in writing if the approval of an approved course provider is revoked or suspended, but also the VSL Tuition Protection Director of such an occurrence. It is important the VSL Tuition Protection Director is alerted to such information since it is highly likely to have a bearing on default by a provider.

Item 15 - Division 4 of Part 4

Item 15 repeals Division 4 of Part 4 of the VSL Act, which sets out the requirements for tuition assurance arrangements as well as the obligations on tuition assurance scheme operators. These concepts will no longer apply once the new arrangements governing tuition protection in proposed new Parts 5A and 5B commence. Despite the repeal of Division 4, subitem 42(2) of Division 2, Part 1 of Schedule 1 sets out the circumstances in which Division 4 of Part 4 and any rules made for the purpose of that Division continue to apply.

Item 16 - After paragraph 46(b)

Item 16 inserts a new paragraph (ba) into section 46 of the VSL Act. It includes the VSL Tuition Protection Director in the list of persons a provider must cooperate fully with in ensuring compliance with, and the efficient and effective administration of, the VSL Act.

The new Part 5A of the VSL Act imposes additional obligations on providers if they default or if they are acting as replacement providers. The proposed functions of the VSL Tuition Protection Director also include facilitating and monitoring the placement of students and managing the VSL Tuition Protection Fund. Therefore, it is relevant and necessary to require providers to cooperate with the VSL Tuition Protection Director and deter non-compliance. Contravention of section 46 carries an existing civil penalty of 60 penalty units.

Item 17 - Paragraph 48(2)(c)

Section 48 of the VSL Act provides that the rules may require an approved course provider to have specified processes and procedures in place.

Item 17 repeals paragraph 48(2)(c), which refers to 'tuition assurance', and substitutes it with a new paragraph that provides that the rules may require a provider to have processes and procedures that relate to tuition protection, including requirements about offering replacement courses. This is a consequential amendment reflecting the new terminology that applies with the introduction of tuition protection in proposed new Part 5A.

Item 18 - At the end of Division 1 of Part 5

Item 18 adds new section 49A into Division 1 of Part 5 relating to the VSL tuition protection levy. Division 1 of Part 5 sets out the general requirements that apply to approved course providers.

New subsection 49A(1) requires an approved course provider to whom Part 5A applies to pay the VSL tuition protection levy and any late payment penalty, when it is due and payable. Part 5A applies to all approved course providers, other than Table A providers and any providers prescribed by the rules. A note explains that the VSL tuition protection levy is imposed by the VET Student Loans (VSL Tuition Protection Levy) Bill 2019 (once enacted), and that amounts of levy for a year are either determined before, or indexed on, 1 August in the year.

Consistent with the approach regarding the approved course provider charge (imposed under the VET Student Loans (Charges) Act 2016) , the detail about the collection and recovery of the VSL tuition protection levy and any late payment penalties is proposed to be dealt with in the rules.

Accordingly, new subsection 49A(2) provides that the rules may make provision for, or in relation to, a number of matters including:

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issuing notices setting out the amount of the VSL tuition protection levy payable by a provider;

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when the VSL tuition protection levy is due and payable;

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issuing notices extending the time for payment of VSL tuition protection levy and late payment penalties;

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the refund, remission or waiver of the VSL tuition protection levy and any late payment penalties;

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the notional liability of the Commonwealth to pay VSL tuition protection levy; and

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the review of decisions made under the rules in relation to the collection or recovery of VSL tuition protection levy.

These matters are proposed to be dealt with in the rules rather than the primary legislation, as these are primarily matters of administration and process regarding the collection and recovery of the levy amounts and do not impact on the setting of the levy amounts payable by the providers. The nature of any reviewable decisions that may be provided for in the rules will be decisions on relatively minor or administrative issues, such as whether a provider's late payment penalty should be waived or errors in the calculation of the levy. It is anticipated these decisions will be dealt with through internal review and will not be subject to external merits review given they should not impact significantly on the rights of any provider and it could be disproportionately costly and time consuming if a provider were able to pursue the issue at the Administrative Appeals Tribunal.

Item 19 - At the end of paragraph 52(2)(b)

Subsection 52(1) of the VSL Act provides that the rules may set out ongoing information requirements for the purposes of ensuring approved course providers are complying with the Act and that the Secretary has access to information and documents related to the operation of the Act.

Paragraph 52(2)(b) provides that the ongoing information requirements may require an approved course provider to provide the Secretary with specified information or documents, including in relation to a number of matters.

Item 19 adds an additional paragraph in subsection 52(2) to enable the rules to require an approved course provider provide the Secretary with specified information or documents in relation to tuition protection. For example, this may include information about the provider's default or its obligations as a replacement provider.

Item 20 - After Part 5

Item 20 inserts new Parts 5A and 5B into the VSL Act. New Part 5A sets out the arrangements relating to tuition protection and new Part 5B establishes the VSL Tuition Protection Fund, the office of the VSL Tuition Protection Director and the VSL Tuition Protection Fund Advisory Board.

Part 5A - Tuition protection

New Part 5A comprises two divisions. Division 1 provides which approved course providers the new tuition protection arrangements apply to and defines when a provider defaults in relation to a student. Division 2 sets out the obligations of various persons when a provider defaults, including those of the provider, the VSL Tuition Protection Director and a replacement provider.

Division 1 - Preliminary

Section 66A - Application of this Part

New subsection 66A(1) provides that Part 5A of the Bill applies to all approved course providers other than Table A providers or providers of a kind prescribed by the VSL Rules. Table A providers are defined in section 16-15 of HESA, and essentially comprise Australian public universities. As well as being higher education providers, some Table A providers are approved course providers under the VSL Act. They have been excluded from the application of Part 5A because, as a class of providers, they are considered to be at very low risk of defaulting and in the event that they do default, should have the capacity and capability to place students in suitable replacement courses without the assistance of the VSL Tuition Protection Director.

Other kinds of providers prescribed by the rules may also be exempt from the application of Part 5A. This is to provide for flexibility should it become apparent that the risk of another class of providers defaulting is also low and they have adequate processes and procedures in place to provide tuition protection to their students. This approach allows the tuition protection arrangements to evolve responsively based on evidence and experience. Notably, only classes of providers can be exempted in this way and not individual providers.

New subsection 66A(2) provides that despite subsection 66A(1), the obligations placed on replacement providers by sections 66F and 66G apply to all approved course providers. This reflects that, in some cases, Table A providers and other providers exempted by the rules may agree to act as replacement providers for students whose providers have defaulted. In these circumstances, it is appropriate that the VSL Tuition Protection Director can require a potential replacement provider to provide information about suitable replacement courses for a student. It is also appropriate to ensure the same protections apply for these students, namely that the replacement providers are required to grant them course credits as appropriate, not charge them tuition fees for the replacement component and enrol them as soon as practicable.

Section 66B - When an approved course provider defaults in relation to a student

This section sets out the circumstances in which a provider defaults in relation to a student. These circumstances include where the provider:

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fails to start to provide a course or part of a course to the student on the day on which the course or part was scheduled to start; or

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ceases to provide a course or part of a course on a day that is after the course or part starts but before it is completed; and

the student has not withdrawn before that day, and either a VET Student Loan has been approved for the student for the course on or before that day, or the student is eligible for a VET Student Loan for the course (in accordance with Division 2, Part 2 of the VSL Act) and has a HELP balance greater than zero on that day.

It is a matter of fact based on the circumstances whether or not a provider defaults. Similarly, the cause of the default does not matter, whether it occurs because the provider of their own accord ceases to provide a course or whether it is the result of compliance action taken against the provider.

The new subsection 66B(3) enables the rules to prescribe circumstances which, if they occur, will mean that a provider is in default. This provision is not intended to extend the broad circumstances described in new subsections 66B(1) and (2) but rather allow for greater precision and clarity in respect of what situations will, in practice, give rise to a default. For example, the rules may set out situations such as if the provider ceases to be a registered training organisation or enters into liquidation, both of which inevitably mean the provider can no longer be delivering the course to a student.

Division 2 - Obligations when a provider defaults in relation to a student

Section 66C - Approved course providers must give notice of default to VSL Tuition Protection Director

This new section applies if an approved course provider defaults in relation to a student.

New subsection 66C(2) requires an approved course provider to give written notice to the VSL Tuition Protection Director of the circumstances of a default within 24 hours of the default occurring. Being aware of the default as soon as possible will allow the VSL Tuition Protection Director to begin assisting students.

New subsection 66C(3) requires an approved course provider to give written notice to the VSL Tuition Protection Director of certain matters within 3 business days of defaulting. The notice must detail the following information for each student to whom the provider has defaulted:

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the student's full name and contact details;

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the course, or part of parts of the course that the student was enrolled in at the time of the default;

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the amount of the tuition fees for each course, or part of the course in which the student was enrolled in at the time of the default;

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details about the payment of those tuition fees, including the amounts that are covered fees; and

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any other matter prescribed by the rules.

A notice given under new subsection 66C(3) must comply with any requirements prescribed by the rules. For example, the rules may prescribe the manner by which the information is to be delivered, such as by a secure USB, or for it to be reasonably compatible with existing systems.

The above information is necessary for the VSL Tuition Protection Director to be able to liaise with students and possible replacement providers as soon as possible and identify whether there are any suitable replacement courses for the students. Providers are already required to keep and maintain this information and so they should be able to collate the material for each student without undue burden and within the 3 business day timeframe.

New subsection 66C(4) requires an approved course provider that has defaulted in relation to a student to give the VSL Tuition Protection Director, if requested in writing, for the parts of the course that the student has completed, either:

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a copy of the student's statement of attainment or other Australian Qualifications Framework certification documentation issued by the course provider or an authorised issuing organisation in accordance with the Australian Qualifications Framework; or

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a copy of an authenticated VET transcript prepared by the Registrar under the Student Identifiers Act 2014.

Providers are already required, under their obligations as registered training organisations, to give the above documents to students. This provision enables the Director to obtain these documents, where necessary.

Failure to comply with new section 66C gives rise to a civil penalty (see subsection 66C(6)) and is also an offence of strict liability (see subsection 66C(7)). In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the VSL Tuition Protection Director's ability to assist students whose provider has defaulted. In addition this provision is subject to an infringement notice scheme.

Strict liability for this offence is appropriate (having regard to the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers) because the offence:

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is subject to an infringement notice scheme (see proposed amendment to section 85 of the VSL Act);

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is punishable by a fine of up to 60 penalty units and it is not punishable by imprisonment; and

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will enhance the effectiveness of the enforcement regime under the VSL Act in deterring non-compliance.

Section 66D - Approved course providers must give notice of default to affected students

New section 66D applies if an approved course provider defaults in relation to a student.

The approved course provider is required to give written notice of the default to students in relation to whom the provider has defaulted within 24 hours. It is important that students are notified as soon as possible of the default. The notice must comply with any requirements prescribed by the rules. It is appropriate that these matters are prescribed in the rules since they are likely to be of an administrative nature.

Contravention of this requirement gives rise to a civil penalty (see subsection 66D(4)) and is also an offence of strict liability (see subsection 66D(5)). In both instances the penalty is 60 penalty units. Making contravention subject to a civil penalty scheme, and imposing strict liability for this offence is appropriate for the same reasons described in respect to new section 66C above.

Section 66E - Student placement service

New subsection 66E(1) provides that, when an approved course provider defaults in relation to a student, the VSL Tuition Protection Director must decide whether there are any suitable replacement courses for the student.

The matters the VSL Tuition Protection Director must have regard to in deciding whether there is a suitable replacement course are:

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whether the replacement course leads to the same or a comparable qualification as the original course;

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whether the mode of delivery of the replacement course is the same as the mode of delivery of the original course;

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the location where the replacement course will be primarily delivered;

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whether a student will incur additional fees for the replacement course that are unreasonable;

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whether the student will be able to attend the replacement course without unreasonably impacting on the student's prior commitments; and

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any other matters prescribed by the rules.

A course that is a suitable replacement course for one student affected by a provider's default may not be a suitable replacement course for another student affected by the same default.

In some circumstances, a course may still be a suitable replacement course even where not all of the above matters are met; for example, a student may agree to online delivery of the replacement course despite the original course being face-to-face. An example of when a replacement course may unreasonably impact on a student's prior commitments is if the teaching hours for the replacement course interfere with the student's prior work commitments.

If the VSL Tuition Protection Director is satisfied that there is one or more suitable replacement courses for a student, the Director must give a written notice to the student. Amongst other requirements, this notice must include:

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a description of each suitable replacement course including the qualification it leads to;

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the contact details of the provider of each suitable replacement course;

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an explanation that, if tuition fees have already been paid for the affected part of the course, tuition fees would not be payable for the replacement component of a replacement course;

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an explanation that, if the student chooses to enrol in another course, there is no obligation on the provider of the other course to offer a replacement component without charge to the student;

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an explanation of the matters the Director must have regard to in deciding whether there is a suitable replacement course; and

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information about the student's right to request a review of the Director's decision and that, if following reconsideration it is determined that there is no suitable replacement course, the student will be given a re-credit of his or her HELP balance for the affected part of the original course.

The inclusion of the above information is to ensure that a student is given information about the replacement course options available, the contact details of the proposed replacement provider(s) so that the student can undertake their own enquiries, and details to assist the student should they seek a review of the decision that a course is a suitable replacement course. The student's right of review is for a reconsideration of the Director's decision, which is not reviewable by the Administrative Appeals Tribunal. An explanation about the absence of external merits review for this decision is provided at item 27.

The student is then able to contact the provider of their preferred suitable replacement course and the formal offer and acceptance of enrolment will be dealt with between the student and the replacement provider.

If the VSL Tuition Protection Director is not satisfied that there is a suitable replacement course, the VSL Tuition Protection Director is required to give the student a notice that:

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explains the matters the Director is required to consider for the purposes of deciding whether there is a suitable replacement course;

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explains the student's right to request a reconsideration of the decision;

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a statement that to facilitate early re-crediting, the student can notify the VSL Tuition Protection Director in writing at any time during the 28 days that they will not seek review of the decision; and

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a statement that, if the decision is not reconsidered or is confirmed, an amount equal to the amount that has been used to pay tuition fees for the student for the affected part will be re-credited to the student's HELP balance.

Similar to the situation where a suitable replacement course is available, the review of the Director's decision that there is no suitable replacement course is undertaken internally by the Director or their delegate, and is not reviewable by the Administrative Appeals Tribunal. An explanation about the absence of external merits review for this decision is provided at item 27.

If a student notifies the Director prior to the expiry of the 28 days that they will not seek review of the decision, this does not mean that the actual re-crediting will occur within the 28 days, but rather that the process to facilitate the re-credit will occur sooner. Pursuant to proposed section 66H, providers are given the opportunity to make written submissions about the amount of the re-credit which submissions the Secretary is required to consider before re-crediting the student's HELP balance.

It is to be noted that pursuant to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Act 2018 , the term 'FEE-HELP balance' currently referred to in the VSL Act will be replaced by 'HELP balance' as from 1 January 2020.

Section 66F - Obligations of providers to provide information about replacement courses

This new section allows the VSL Tuition Protection Director to issue a notice which requires an approved course provider to provide information the Director reasonably requires to make a decision as to whether there is a suitable replacement course for a student.

The information must be provided in a form (if any) approved by the Director and in accordance with any other requirements of the Director.

Failure to comply with new section 66F gives rise to a civil penalty (see subsection 66F(3)) and is also an offence of strict liability (see subsection 66F(4)). In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the VSL Tuition Protection Director's ability to identify a suitable replacement course for a student affected by a provider default. In addition this provision is subject to an infringement notice scheme.

Imposing strict liability for this offence is appropriate for the same reasons described in respect to new section 66C above.

Section 66G - Obligations of replacement provider

This new section sets out the obligations that apply to an approved course provider when a student accepts an offer of a replacement course with the provider.

The provider must give written notice to the VSL Tuition Protection Director within 14 days after the student has accepted the offer of a replacement course with the provider. This is important to ensure that the Director is made aware that the student has been successfully placed in a replacement course.

The provider must also ensure that the student is:

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granted course credits for parts of the original course successfully completed by the student - as evidenced by a statement of attainment or other Australian Qualifications Framework certification documentation issued in accordance with the Australian Qualifications Framework or a copy of an authenticated VET transcript prepared by the Registrar under the Student Identifiers Act 2014;

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not charged tuition fees for a replacement component of the replacement course, if the tuition fees for the affected part of the original course have been paid; and

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enrolled in the replacement course as soon as practicable.

These requirements ensure that the student is afforded appropriate protections when enrolling in the replacement course.

Contravention of this provision is a civil penalty (see subsection 66G(4)) and it is also an offence of strict liability (see subsection 66G(5)). In both instances, the penalty is 60 penalty units.

Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will impact on the ability of students, whose provider has defaulted, to continue their training in suitable replacement courses. In addition this provision is subject to an infringement notice scheme.

Imposing strict liability for this offence is appropriate for the same reasons described in respect to new section 66C above.

Section 66H - Obligations where there is no replacement course

New section 66H places obligations on the VSL Tuition Protection Director if an approved course provider defaults in relation to a student and the Director decides under new paragraph 66E(1)(b) that there is no suitable replacement course for a student.

In these circumstances, the VSL Tuition Protection Director must give a written notice to the Secretary of that fact and a written notice to the provider:

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stating that an amount equal to the amount of the VET Student Loan used to pay tuition fees for the student for the affected part of the original course will be re-credited to the student's HELP balance and will be required to be paid by the provider to the Commonwealth; and

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inviting the provider to make written submissions to the Director about the amount of the re-credit within 28 days.

The note to new section 66H explains that the amount is re-credited by the Secretary under new section 72A of the VSL Act. The Secretary is required to take into account any submissions received by the Director from the provider within the 28 day period before re-crediting a student's HELP balance.

Part 5B - VSL Tuition Protection Fund, VSL Tuition Protection Director and VSL Tuition Protection Fund Advisory Board

New Part 5B comprises three Divisions. Division 1 establishes the VSL Tuition Protection Fund; Division 2 establishes the office of the VSL Tuition Protection Director; and Division 3 establishes the VSL Tuition Protection Fund Advisory Board.

Division 1 - VSL Tuition Protection Fund

Section 66J - Name of Fund

New section 66J establishes the VSL Tuition Protection Fund and provides that it is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.

Section 66K - Credits to the VSL Tuition Protection Fund

New section 66K provides that there must be credited to the VSL Tuition Protection Fund amounts equal to the following:

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each amount of VSL tuition protection levy received from an approved course provider;

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each amount paid by a course provider to the Commonwealth under section 22 that relates to an amount re-credited under the new section 72A, if the balance of the Fund had previously been reduced under paragraph 66L(1)(f) in relation to that amount. Subsection 22(1) of the VSL Act requires an approved course provider to pay the Commonwealth an amount equal to a loan amount that was used to pay tuition fees for a student for a course and re-credited to the student's HELP balance. The amount a provider is required to pay under that provision is a debt due to the Commonwealth. If the re-credit occurs pursuant to new section 72A, either the Secretary or the VSL Tuition Protection Director could take action to recover the debt but if recovered, the amount is required to be credited into the VSL Tuition Protection Fund, if the balance of the Fund had previously been reduced in respect of that amount under paragraph 66L(1)(f);

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any other money appropriated by the Parliament for the purposes of the VSL Tuition Protection Fund - for example this includes the initial amount appropriated by Parliament for the VSL Tuition Protection Fund;

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any penalties for late payment of VSL tuition protection levy. Details will be provided in the rules regarding when a provider incurs a late payment penalty, and the calculation, recovery or waiver of any such late payment penalty;

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each amount received by the Commonwealth for the purposes of the VSL Tuition Protection Fund, for example, this covers any insurance payments received as a result of a claim made by the VSL Tuition Protection Director under any insurance policy in place for the tuition protection arrangements.

There are two notes under new section 66K to assist the reader. The first note explains that if any of the purposes of a special account is a purpose covered by an item in an Appropriation Act (whether or not the item expressly refers to the account) then amounts may be debited against the appropriation for that item and credited to that special account. The second note reminds the reader that the VSL tuition protection levy is imposed under the VET Student Loans (VSL Tuition Protection Levy) Act 2019 (when enacted), and the rules will deal with its collection from providers.

Section 66L - Purposes of the VSL Tuition Protection Fund

This new section sets out the purposes of the VSL Tuition Protection Fund, which are as follows:

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making payments in connection with tuition protection;

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paying or discharging the costs, expenses and other obligations incurred by the Commonwealth in the performance of the VSL Tuition Protection Director's functions, including management of the VSL Tuition Protection Fund. For example, this might include costs incurred in paying a consultant engaged to assist the VSL Tuition Protection Director perform his or her functions - it is anticipated that the Director will engage a service provider to provide case management and student placement services for students affected by a provider default. Other examples may include: paying premiums for insurance coverage for the tuition protection arrangements where the VSL Tuition Protection Fund is below its target size; and paying for actuarial advice to inform the setting of levy components;

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paying any remuneration and allowances payable to the VSL Tuition Protection Director and members of the VSL Tuition Protection Fund Advisory Board. These amounts will be as determined by the Remuneration Tribunal;

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paying any amount that is required or permitted to be repaid. This is to allow the Commonwealth to meet any legal obligation it might have to pay amounts out of the Fund;

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reducing the balance of the account (and therefore the available appropriation for the account) without making a real or notional payment. This purpose enables amounts to be transferred from the Fund (which as a special account is part of consolidated revenue) elsewhere to the Commonwealth which is also part of consolidated revenue. For example, this would enable a "payment" from the Fund to the part of consolidated revenue affected when an amount equal to the tuition fees for an affected part of an original course is re-credited to a student's HELP balance under the new section 72A. It would also enable the VSL Tuition Protection Director to repay funding appropriated by Parliament to establish the Fund once the Fund is self-sustaining.

A note underneath new subsection 66L(1) reminds the reader that section 80 of the Public Governance, Performance and Accountability Act 2013 deals with special accounts.

New subsection 66L(2) enables the rules to make provision in relation to the purpose under new paragraph 66L(1)(a), that is making payments in connection with tuition protection. This includes making rules about the circumstances in which payments may be made; amounts of different kinds of payments; and methods for calculating different kinds of payments. A note underneath new subsection 66L(2) provides an example of such a payment is that a provider may receive a transfer payment if a student accepts a place in a replacement course with the provider. Another example is that the rules may give the VSL Tuition Protection Director the discretion to pay a third party (for example a liquidator) to provide information required for the purpose of facilitating placement of a student in a suitable replacement course or re-crediting the student's HELP balance for the affected part of an original course.

The power to make Rules in respect of these payments will facilitate greater specificity and transparency around payments that may be made to providers and other persons in connection with tuition protection. It is desirable to deal with this in the rules to avoid being overly prescriptive in the primary legislation, which might inadvertently limit the VSL Tuition Protection Director's practical administration of tuition protection.

New subsection 66L(3) specifies that the purpose of the Fund does not include paying or discharging any costs, expenses or other obligations associated with services provided to the VSL Tuition Protection Director by an employee or officer of a Commonwealth entity (within the meaning of the Public Governance, Performance and Accountability Act 2013).

Division 2 - VSL Tuition Protection Director

Section 66M - VSL Tuition Protection Director

New subsection 66M(1) provides that there is to be a VSL Tuition Protection Director.

New subsection 66M(2) provides that the office of VSL Tuition Protection Director is to be held by the person who holds the office of TPS Director under section 54A of the ESOS Act. A note provides that the TPS Director also holds the office of HELP Tuition Protection Director under the Higher Education Support Act 2003.

New subsection 66M(3) clarifies that the reference in new subsection 66M(2) to the person who holds the office of the TPS Director includes a reference to a person acting in that office because of an appointment under section 54K of the ESOS Act. This is to ensure that, where a person holding the office of TPS Director is only doing so temporarily, this person will also temporarily hold the office of the VSL Tuition Protection Director.

Section 66N - Functions of the VSL Tuition Protection Director

New section 66N sets out the functions of the VSL Tuition Protection Director which are:

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facilitating and monitoring the placement of students in relation to whom an approved course provider has defaulted;

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paying amounts out of, or reducing the balance of, the VSL Tuition Protection Fund under section 66L;

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reporting to the Minister on the operation of Part 5A (tuition protection) and the financial status of the VSL Tuition Protection Fund;

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managing the VSL Tuition Protection Fund in a way that ensures that it is able to meet all its liabilities from time to time;

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making the legislative instrument each year for the purposes of section 12 of the VET Student Loans (VSL Tuition Protection Levy) Act 2019 (when enacted);

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recommending that the Secretary take action against an approved course provider that has defaulted in relation to a student or has otherwise not complied with the VSL Act;

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any other function conferred by this Bill or any other law of the Commonwealth; and

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any other function that is incidental or conducive to the performance of the above functions.

New subsection 66N(2) provides that the VSL Tuition Protection Director has power to do all things necessary or convenient to be done for, or in connection with, the performance of the Director's functions.

Section 66P - Administrative provisions relating to the VSL Tuition Protection Director

Section 66P describes administrative provisions relating to the VSL Tuition Protection Director by reference to provisions from the ESOS Act that relate to the TPS Director. Subsection 66P(1) sets out a table that refers to a number of provisions from the ESOS Act which are set out at subsection 66P(2).

The effect of this provision is to replicate the provisions set out in subsection 66P(2) so that they govern the functions of the VSL Tuition Protection Director in the context of the VSL Act in a similar way as they govern the functions of the TPS Director under the ESOS Act.

These provisions apply to the offices of the VSL Tuition Protection Director, HELP Tuition Protection Director and TPS Director in a similar way, as they deal with administrative issues such as: remuneration and allowances (section 54C of the ESOS Act), leave of absence (section 54D), restriction on outside employment (section 54E), disclosure of interests (54F), other terms and conditions (section 54J), consultants (54L) and application of finance law (section 54N).

Currently the Minister responsible for administering the ESOS Act (defined in a new definition in section 6 as the Education Minister) is different to the Minister responsible for administering the VSL Act. In many instances it is the Education Minister that is made responsible for administrative matters relating to the VSL Tuition Protection Director, for example, remuneration, restriction on outside employment and leave of absence. This is appropriate given the VSL Tuition Protection Director is the same person as the HELP Tuition Protection Director and the TPS Director. The VSL Tuition Protection Director is, however, required to disclose any interests, pecuniary or otherwise, that could conflict with the proper performance of his or her duties to both the Minister administering the VSL Act and to the Education Minister.

New subsection 66P(3) provides that, for the purpose of section 54E of the ESOS Act, the Education Minister is taken to have given approval for the TPS Director to engage in paid employment as the VSL Tuition Protection Director. This provision is included for the avoidance of doubt, as paragraph 54E prohibits the TPS Director from engaging in paid employment outside the duties of his or her office without the Minister's approval.

New subsection 66P(4) provides that the Education Minister can terminate the appointment of the TPS Director, if the TPS Director engages (except with the Education Minister's approval) in paid employment outside the duties of his or her office as VSL Tuition Protection Director, or where the VSL Tuition Protection Director fails without reasonable excuse to give the Education Minister and the Minister administering the VSL Act written notice of interests that could conflict with the proper performance of his or her duties as the VSL Tuition Protection Director.

Division 3 - VSL Tuition Protection Fund Advisory Board

Section 66Q - Establishment and membership

New section 66Q establishes the VSL Tuition Protection Fund Advisory Board. The members of this Board are to be the same as the members of the TPS Advisory Board appointed under the ESOS Act, including acting members.

The Chair (including any person acting in this role) and Deputy Chair of the Tuition Protection Fund Advisory Board are the Chair and Deputy Chair of the TPS Advisory Board.

New subsection 66Q(7) provides that, despite subsection 55(2) of the ESOS Act, a person is eligible to be appointed to the TPS Advisory Board if the Education Minister is satisfied that the person has qualifications or experience that the Education Minister considers relevant to the performance of the VSL Tuition Protection Fund Advisory Board's functions.

Subsection 55(2) of the ESOS Act provides that a person is not eligible for appointment as a Board member under paragraph 55(1)(b) unless the Minister is satisfied that he or she has qualifications or experience that the Minister considers relevant to the performance of the Board's functions. The purpose of subsection 66Q(7) is to recognise that, as VSL Tuition Protection Fund Advisory Board members will also be members of the HELP Tuition Protection Fund Advisory Board and the TPS Advisory Board, in some cases the member may have been appointed for his or her specific qualifications or experience that is most relevant to one, or two, but not all three Advisory Boards.

Section 66R - Function of the VSL Tuition Protection Fund Advisory Board

New section 66R provides that the function of the VSL Tuition Protection Fund Advisory Board is to provide advice and make recommendations in relation to the making of a legislative instrument each year under section 12 of the VET Student Loans (VSL Tuition Protection Levy) Act 2019 (once enacted). The Board can give advice and recommendations on its own initiative or following a request from the VSL Tuition Protection Director. The limited function of the VSL Tuition Protection Fund Advisory Board is the same as that which applies to the TPS Advisory Board.

Section 66S - Administrative provisions relating to the VSL Tuition Protection Fund Advisory Board

New section 66S describes administrative provisions relating to the VSL Tuition Protection Fund Advisory Board by reference to provisions from the ESOS Act that relate to the TPS Advisory Board. Subsection 66S(1) sets out a table that refers to a number of provisions from the ESOS Act, which are set out at subsection 66S(2).

The effect of the clause is to replicate the provisions set out in subsection 66S(2) so that they govern the functions of the VSL Tuition Protection Fund Advisory Board in the context of the VSL Act in the same way as they govern the functions of the TPS Advisory Board under the ESOS Act.

These provisions apply across the three Advisory Boards in largely the same way as they deal with the following administrative issues: remuneration and allowances (section 55E of the ESOS Act), disclosure of interests (section 55H), disclosure of interests to the Board (section 55J), termination (section 55L), and meetings of the Board (sections 56A - 56G). The only difference is that a Member of the VSL Tuition Protection Fund Advisory Board must disclose any interests that could conflict with the proper performance of his or her functions to the Minister administering the VSL Act.

Item 21 - section 69

Item 21 repeals section 69 of the VSL Act. Section 69 sets out circumstances in which the course provider must, on the Secretary's behalf, re-credit a student's HELP balance when a course is not provided to completion. This amendment is consequential to the repeal of Division 4 of Part 4 and the concept of a tuition assurance arrangement. The substance of section 69 - that is a student having their HELP balance re-credited when a course is not provided until completion - will instead be provided for in new section 72A.

Despite the repeal of section 69, on account of subitem 42(2) of Division 2, Part 1 of Schedule 1, in limited circumstances this section may continue to apply.

Item 22 - After section 72

This item inserts a new section 72A into the VSL Act. This section will require the Secretary to re-credit a student's HELP balance if the student has not completed the requirements for the course or part of the course because the provider defaults in relation to the student and the VSL Tuition Protection Director decides that there is no suitable replacement course for the student.

This reflects that, in the first instance, the VSL Tuition Protection Director will attempt to identify one or more suitable replacement courses for students to allow them to continue their studies; and re-credit to the student's HELP balance for the affected part of the original course occurs only where the Director is not satisfied that there is a suitable replacement course for the student.

If the Director is satisfied there is no suitable replacement course, the Secretary must re-credit the student's HELP balance with an amount equal to the amount of the VET Student Loan used to pay tuition fees for the student for the affected part of the original course.

In determining this amount, the Secretary must take into account any submissions that the VSL Tuition Protection Director has received from the provider under new subsection 66H(3). This allows for procedural fairness to the provider should it dispute the amount of the re-credit. In this regard, it is the responsibility of the provider to ensure the information it is required to provide to the Secretary about a student's completion status is up to date since this will be one of the key sources of information to the Secretary in assessing whether or not a student has completed the requirements for a course or part of a course.

The Secretary is required to notify the student and the provider in writing of the Secretary's decision in relation to the amount that has been re-credited as soon as practicable.

There is a note under subsection 72A(1) to assist the reader. The note provides that a course provider may be required to pay an amount as a result of recrediting under this section. That amount may be debited from the VSL Tuition Protection Fund. If the amount is debited from the Fund a later payment of the amount by the provider is credited to the Fund.

Item 23 - Subsection 73(1)

Item 23 inserts an exception into the requirement in section 73 of the VSL Act that the Secretary give the provider a notice and invite submissions before re-crediting a student's HELP balance in accordance with Division 3, such that the requirement will not apply if the re-crediting occurs under new section 72A.

The request for submissions from a provider is not necessary for re-credits under new section 72A since the VSL Tuition Protection Director would already have invited submissions from the provider under new subsection 66H(3).

Item 24 - Section 74 (after item 2 of the table)

Item 27 - At the end of section 80

Item 24 adds the following two additional items into the table of reviewable decisions at section 74 of the VSL Act:

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a decision by the VSL Tuition Protection Director under paragraph 66E(1)(a) - that the VSL Tuition Protection Director is satisfied that there are one or more suitable replacement courses for a student;

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a decision by the VSL Tuition Protection Director under paragraph 66E(1)(b) - that the VSL Tuition Protection Director is not satisfied that there is a suitable replacement course for a student.

As these decisions are reviewable decisions, the process for the internal reconsideration of reviewable decisions set out in Divisions 1 and 2 of Part 7 (except section 80) apply to these decisions.

Item 27 adds a new subsection 80(3) to provide that the above two decisions are not subject to review by the Administrative Appeals Tribunal. The reasons for the absence of external merits review are:

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clear parameters are set out at subsection 66E(3) about what the VSL Tuition Protection Director must have regard to in determining whether a course is a suitable replacement course. This is intended to ensure that the first instance decision is reasonable and justifiable, in respect of which students may seek internal review;

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in practice, the Director will actively work with providers and students to identify suitable replacement courses for a student. It is intended that, to the extent possible, a student would be provided with the option of several suitable replacement courses to choose between;

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when a provider defaults, it would be in the best interests for students to receive a resolution of the issue of whether or not there is a suitable replacement course as soon as practicable to allow them to continue their studies. Engaging in the potentially lengthy external merits review process may mean that students are unable to continue their studies until the matter is resolved;

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in respect of a decision that there is no suitable replacement course for a student - the student will receive a re-credit of his or her HELP balance for the affected part of their course, which means they should not be financially disadvantaged should there not be a suitable replacement course;

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further, legislation does not compel a replacement provider to enrol a student in a replacement course, which means practically, if an external merits review may consider there are potentially suitable replacement courses, it cannot assist the students if no providers are prepared to deliver that course to the student.

Item 25 - Section 78 (heading)

Item 25 revises the heading to section 78 of the VSL Act, to distinguish it from the new section 78A inserted by item 26.

Item 26 - After section 78

Item 26 inserts a new section 78A into the VSL Act, which provides that the delegate of the VSL Tuition Protection Director who made a decision under review must not be the delegate that reconsiders that decision. This is to allow for a fair and unbiased reconsideration of the initial decision.

A reviewable decision may be reconsidered by another delegate of the VSL Tuition Protection Director, but only if that delegate was not involved in making the decision and occupies a position that is at a level not lower than that of the delegate who made the initial decision. These measures are to allow for an accountable and transparent reconsideration of the decision and to avoid issues of conflict of interest, inexperience, or pressure felt by a more junior officer to confirm a more senior officer's decision.

Item 28 - At the end of section 84

Section 84 of the VSL Act provides that each civil penalty provision of the Act 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.

Item 28 adds a new subsection 84(3) to provide that the VSL Tuition Protection Director is an authorised applicant for the purposes of Part 4 of the Regulatory Powers Act as it applies in relation to Part 5A and to the new section 104A of the VSL Act - that is, the Director can apply to a relevant court for a civil penalty order against a person for a contravention of a civil penalty provision in Part 5A or new section 104A.

Item 29 - At the end of section 85

Section 85 of the VSL Act provides that, an offence or civil penalty provision of the Act is subject to an infringement notice under Part 5 of the Regulatory Powers Act. Part 5 of that Act creates a framework for using infringement notices in relation to provisions. A person given an infringement notice has the choice of paying the amount specified as an alternative to having court proceedings brought against them for the contravention.

Item 29 adds a new subsection 85(3) to provide that for the purposes of Part 5 of the Regulatory Powers Act, as it applies in relation to Part 5A and to the new section 104A of this Act, the VSL Tuition Protection Director is both an infringement officer and the relevant chief executive - that is, the Director can issue, extend the time to pay, and withdraw infringement notices for contraventions of offence and civil penalty provisions in Part 5A and new section 104A.

Item 30 - After subsection 89(1)

Item 30 inserts a new subsection 89(1A) to provide that the VSL Tuition Protection Director may, in writing, delegate his or her powers and functions under the Regulatory Powers Act as it applies in relation to Part 5A and to the new section 104A, to an SES employee, or an acting SES employee, in the Department administered by the Minister that administers the VSL Act, or the Department administered by the Education Minister. The power to delegate ensures that the VSL Director's regulatory powers under the Act are able to be carried out efficiently and effectively should the Director not have the capacity to undertake all the regulatory functions or powers in a timely fashion. Subsection 89(4) provides appropriate constraints on the delegate's exercise of the regulatory powers by ensuring the delegate must comply with any directions of the delegator. Subsection 89(1A) is consistent with the Secretary's capacity to delegate his or her powers under the Regulatory Powers Act under subsection 89(1).

Item 31 - Paragraph 92(1)(c)

Item 31 repeals paragraph 92(1)(c). Paragraph 92(1)(c) deals with the use and disclosure of information by an officer of a tuition assurance scheme operator that is a party to an approved tuition assurance arrangement. This amendment is consequential to the repeal of Division 4 of Part 4. (Use and disclosure of VET information by the VSL Tuition Protection Director for the purposes of the Act is governed by section 91, as the Director is a Commonwealth officer).

Item 32 - Section 94

Item 33 - At the end of section 94

Items 32 and 33 add a new subsection 94(2) to the VSL Act; section 94 deals with disclosure of VET information for law enforcement purposes.

New subsection 94(2) provides that the VSL Tuition Protection Director may disclose VET information to:

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a Department, agency or authority of the Commonwealth, a State or a Territory; or

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an enforcement body (within the meaning of the Privacy Act 1988);

if the Director believes on reasonable grounds that the disclosure of the information is necessary for an enforcement related activity (within the meaning of the Privacy Act).

In managing tuition protection, the Director may at times need to disclose information for law enforcement reasons, for example when prosecuting an offence provision under new Part 5A or if the Director has information that suggests that a provider has committed an offence under another law.

It is imperative that the Director is able to share information with these bodies to ensure the integrity and quality of vocational education and training in Australia is protected; the protection of such interests supports the interests of the students. This outcome is assisted by facilitating the sharing of information to assist the Commonwealth (and where relevant, a State or Territory) to take action against course providers that have engaged in conduct that is in breach of a law or criminal offence.

Item 34 - After section 104

Item 34 inserts a new section 104A into the VSL Act to enable the VSL Tuition Protection Director to require a person to provide information about compliance with new Part 5A. This is similar to the Secretary's powers under section 104.

This new section provides that the Director may, by written notice, require a person, who the Director believes on reasonable grounds has information or documents relevant to determining whether Part 5A has been complied with, to give the information or documents to the Director. This provision may be used, for example, to require a student or a provider to produce information or documents relevant to determining compliance by the provider with Part 5A.

The information must be provided in a form (if any) approved by the Director and in accordance with other requirements specified by the Director.

Contravention of this clause is a both an offence of strict liability as well as a civil penalty provision; both have a maximum penalty of 60 penalty units.

Strict liability for this offence is appropriate (having regard to the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers) because the offence:

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is subject to an infringement notice scheme (see proposed amendment to section 85 of the VSL Act);

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is punishable by a fine of up to 60 penalty units and it is not punishable by imprisonment; and

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will enhance the effectiveness of the enforcement regime under this Bill in deterring such conduct.

Note that the provision does not override the privilege against self-incrimination.

Item 35 - After section 105

Item 35 inserts a new section 105A into the VSL Act to enable the VSL Tuition Protection Director to arrange for the use, under the Director's control, of computer programs for any purposes for which the Director may make decisions under the Act. This is similar to the Secretary's powers under section 105.

A decision made under such an arrangement is, for the purposes of the Act, taken to be a decision made by the Director. This provides the flexibility for the use of technology to facilitate decision-making processes to the extent appropriate. It is not currently envisaged that any decisions will be made by computer programs, but when there is greater technical capabilities, computer programs might be used to assist in decision making.

Item 36 - Subsections 110(3) and (4)

This item provides for subsections 110(3) and (4) to be repealed. These subsections provide for the continuing application of the Act to a person or body who was a tuition assurance scheme operator. This amendment is consequential to the repeal of Division 4 of Part 4 and reflects that the concept of such a person no longer applies.

Item 37 - After paragraph 112(1)(a)

Item 37 includes in the list of persons referred to in subsection 112(1) of the VSL Act, the VSL Tuition Protection Director and a member of the VSL Tuition Protection Fund Advisory Board.

Section 112 provides the persons listed in subsection 112(1) are protected from civil actions where they have been acting in good faith in performing or exercising their functions and powers under the Act. This proposed amendment extends this protection to the VSL Tuition Protection Director and a member of the VSL Tuition Protection Fund Advisory Board.

Item 38 - After section 113

Item 38 inserts a new section 113A into the VSL Act which requires that, before 1 July 2021, the Minister must commence a review into the operation of new Parts 5A and 5B of the VSL Act. For example, such a review may examine the operations of the tuition protection arrangements, the role and function of the VSL Tuition Protection Director, the VSL Tuition Protection Fund Advisory Board and the management of the VSL Tuition Protection. This review is to be conducted at the same time as the reviews under new section 238-7 of HESA and new section 176A of the ESOS Act in respect of the operation of the tuition protection arrangements under those Acts. The Minister is required to cause a report to be prepared of the review and to be tabled in each House of the Parliament within 15 sitting days after the completion of the preparation of the report.

Item 39 - Subsection 114(1)

Item 40 - Subsection 114(2)

Section 114 enables the Secretary to delegate any or all of his or her powers under the VSL Act to certain persons. Items 39 and 40 amend section 114 to extend the ability to delegate to apply to "performing functions" in addition to the existing concept of "exercising powers" for completeness.

Item 41 - At the end of section 114

Item 41 adds two new subsections 114(3) and (4) to enable the VSL Tuition Protection Director to delegate any or all of his or her powers or functions under the Act, other than the function under new paragraph 66N(1)(e), to certain APS employees. Paragraph 66N(1)(e) gives the VSL Tuition Protection Director the function of making a legislative instrument under section 12 of the VET Student Loans (VSL Tuition Protection Levy) Act 2019 (once enacted), which function will be exercised by the Director exclusively.

The Director may, in writing, delegate to an APS employee, who holds or performs the duties of an APS 6 position or above in the Department administered by the Minister who administers the VSL Act or the Department administered by the Education Minister, all or any of the powers or functions of the Director under the Act. It is anticipated that the VSL Tuition Protection Director will be supported by officers in one or both of these departments. In exercising powers under the delegation, the delegate is required to comply with any directions of the Director.

It is anticipated that the VSL Tuition Protection Director's powers and functions would only be delegated to officers, who have been allocated as resources dedicated to assisting the VSL Tuition Protection Director. It is anticipated delegated powers would primarily be exercised by officers at EL1 and EL2 levels. The power to delegate to an employee at the APS 6 level has been included as:

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the current disposition of staff that will be assigned to assist the VSL Tuition Protection Director in the exercise of his or her functions has not yet been determined; and

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the VSL Tuition Protection Director's work load may unexpectedly increase significantly, for example in the event of multiple provider defaults. Officers at the APS 6 level may need to exercise delegated powers to ensure that affected students are able to receive assistance as soon as practicable.

Division 2 - Application and transitional provisions

Item 42 - Application and transitional provisions

Certain of the provisions which are to be repealed under Part 1 of Schedule 1 to the Bill need to continue to apply after the commencement of the new tuition protection arrangements. This is necessary since the Bill only applies from 1 January 2020 and the Commonwealth is still working with approved course providers and former tuition assurance scheme operators to assist students of providers that ceased to provide courses before 1 January 2020.

Subitem 42(1) provides that the amendments of section 25 apply in relation to applications for approval made after the commencement of this Part; or before the commencement of this Part, if the application had not been decided before the commencement. This means that bodies that applied for approval prior to 1 January 2020 but whose applications had not been decided at that time) are not required to be a party to an approved tuition assurance arrangement (and, of course, bodies that apply for approval on or after 1 January 2020).

Subitem 42(2) provides that, if before the commencement of Part 1 of Schedule 1 to the Bill, a course was not delivered to completion by a provider, then the VSL Act and any instruments in force under the Act immediately before that commencement continue to apply, after that commencement, in relation to the provider as if the amendments and repeals made by this Part of the Bill had not happened.

This provision ensures that the legal arrangements in place for tuition assurance prior to 1 January 2020 will continue in effect for any tuition assurance events (e.g. cessation of courses) that occurred prior to that time.

In the 2018-2019 calendar years, the Secretary exempted approved course providers from the obligation under paragraph 25(2)(g) of the VSL Act to be a party to an approved tuition assurance arrangement, pursuant to paragraph 25(3)(a) of the VSL Act. The exemptions were given subject to conditions imposed under subsection 25(4) of the VSL Act. These exemption conditions include applying section 69 despite there being no tuition assurance arrangement. At the same time, the department imposed further conditions of approval on providers under subsection 34(1), which includes for the higher risk providers, having to provide bank guarantees and the like to cover the financial risk to the Commonwealth (relating to section 69 re-credits). Some of the conditions also include providers being compelled to provide replacement courses in certain circumstances. Subitem 42(2) ensures the obligations imposed on approved course providers through conditions in respect to any course closures in the 2018-2019 calendar years will continue to apply.

Subitems 42(3) and 42(4) provide that:

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the proposed amendments of sections 46 and 48 of the VSL Act under Schedule 1, Part 1 of this Bill; and

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new section 49A, subparagraph 52(2)(b)(x) and Part 5A of the VSL Act, as inserted by Schedule 1, Part 1 of this Bill;

apply in relation to an approved course provider after the commencement of this Part, regardless of when the provider was approved. This is to ensure that all approved course providers are required to comply with the new and amended obligations imposed on providers, even if providers were approved prior to the commencement of this Part.

Part 2 - Consequential amendments

Education Services for Overseas Students Act 2000

Item 43 - After paragraph 52C(1)(b) (before the note)

Item 44 - Subsection 52C(2)

Items 43 and 44 amend section 52 of the ESOS Act to provide that the purposes of the Overseas Students Tuition Fund includes paying any remuneration and allowances payable to the TPS Director. It remains the case that the purposes of the Overseas Students Tuition Fund do not include paying or discharging any costs, expenses or other obligations associated with services provided to the TPS Director by any employee or officer of the Department.

Item 45 - Subsection 54A(1) (note)

Item 46 - At the end of subsection 54A(1) (after the note)

Items 45 and 46 insert a new Note 2 to subsection 54A(1) of the ESOS Act. The new note explains that the TPS Director is also the VSL Tuition Protection Director under the VSL Act and the HELP Tuition Protection Director under HESA.

Item 47 - At the end of section 55A

Item 47 adds a note at the end of section 55A, which explains that the members of the TPS Advisory Board are also members of the VSL Tuition Protection Fund Advisory Board under the VSL Act and members of the HELP Tuition Protection Fund Advisory Board under HESA.

Item 48 - After subparagraph 55C(1)(a)(i)

Item 48 amends paragraph 55C(1)(a) to provide that membership of the TPS Advisory Board also includes a representative from the Department administered by the Minister administering the VSL Act.

Item 49 - Subsection 55C(2A)

Item 49 omits the words "the international education and training sector" and substitutes "the education and training sectors". This will ensure that Board members of the TPS Advisory Board, as a group, will have qualifications or experience relevant to the VSL Tuition Protection Fund Advisory Board and the HELP Tuition Protection Fund Advisory Board and not just the international sector.

Item 50 - After section 176

Item 50 inserts a new section 176A into the ESOS Act which requires that before 1 July 2021, the Minister must commence a review of the operation of Parts 5 (about tuition protection service) and 5A (about the Overseas Students Tuition Fund and related matters). This review is to be conducted at the same time as the reviews under new section 238-7 of HESA and new section 113A of the VSL Act in respect of the operation of the tuition protection arrangements under those Acts. The Minister is required to cause a report to be prepared of the review and for the report to be tabled in each House of the Parliament within 15 sitting days after the completion of the preparation of the report.