House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Education and Youth, the Honourable Alan Tudge MP)

Notes on Clauses

Clause 1 - Short title

This clause provides for the Act to be the Education Legislation Amendment (2021 Measures No. 2) Act 2021.

Clause 2 - Commencement

The table in subclause 2(1) sets out when the Act's provisions will commence. The table provides that:

•

sections 1 to 3 of the Act commence the day the Act receives the Royal Assent;

•

Part 1 of Schedule 1 commences on 1 January 2022;

•

Parts 2 to 5 of Schedule 1 commence the day after the Act receives the Royal Assent; and

•

Schedule 2 commences the day after the Act receives the Royal Assent.

Subclause 2(2) provides that information in column 3 of the table at subclause 2(1) is not part of the Act and information may be inserted into column 3 or information in it may be edited in any published version of the Act.

Clause 3 - Schedules

This clause provides that any legislation that is specified in a schedule is amended or repealed as set out in the applicable items in the schedule and that any other item in a schedule has effect according to its terms.

LIST OF ABBREVIATIONS

Schedule 1 - Higher education support amendments

Summary

Schedule 1 of the Bill amends HESA to enable former permanent humanitarian visa holders who transition to a resident return visa to retain their eligibility for HELP loans. It also makes minor technical amendments to improve and update the operation of HESA by aligning provisions across all HELP programs for student protection measures, clarifying references to Indigenous languages, streamlining the operation of grant funding, and clarifying the operation of grandfathering arrangements.

Detailed explanation

Part 1-Student eligibility for Commonwealth assistance

Higher Education Support Act 2003

Items 1, 2 and 3 - Paragraphs 90-5(1)(b), 104-5(1)(b), 118-5(1)(b) and 126-5(1)(b)

Items 1 to 3 expand the citizenship or residency requirements for HECS-HELP, FEE-HELP, OS-HELP and SA-HELP assistance, contained in paragraphs 90-5(1)(b), 104-5(1)(b), 118-5(1)(b) and 126-5(1)(b) of HESA, to include reference to an 'eligible former permanent humanitarian visa holder'.

These amendments enable the measure extending HELP loan eligibility to former permanent visa holders who transition to a resident return visa in the humanitarian stream.

Items 4 and 5 - Schedule 1

Item 4 amends subclause 1(1) of Schedule 1 to HESA to insert a new definition of 'eligible former permanent humanitarian visa holder', being a person who:

•

is not a permanent humanitarian visa holder; and

•

was previously a permanent humanitarian visa holder; and

•

is the holder of a visa in a class or subclass of visas specified in a determination under subclause (1A) of Schedule 1.

Item 5 inserts new subclauses (1A) and (1B) at the end of Schedule 1 to HESA. Subclause (1A) gives the Minister the power to, for the purposes of paragraph (c) of the definition of 'eligible former permanent humanitarian visa holder', make a determination in writing specifying a class or subclass of visas provided for by the Migration Act 1958 or regulations made under that Act. Subclause (1B) provides that a determination made under subclause (1A) is a legislative instrument, and, as such is subject to the Parliamentary disallowance process. The disallowance process provides Parliamentary oversight and scrutiny over any legislative instrument made by the Minister.

Allowing the Minister to specify classes of visas in this way is essential to provide flexibility and responsiveness in ensuring the continuity of HELP eligibility for this class of students. If the relevant visa subclasses for the resident return visa (currently subclasses 155 and 157) change, this provision enables the Minister to react to such changes without the need to amend the primary legislation.

Item 6 - Application provisions

Item 6 provides that the amendments made by Part 1 of Schedule 1 apply from 1 January 2022.

Part 2- HECS-HELP re-crediting and repayment provisions

Higher Education Support Act 2003

Item 7 - Before section 36-24C

Item 7 inserts new sections 36-24BB and 36-24BC into HESA.

Through the Job-Ready Graduates Act, student protection measures were strengthened by ensuring that students who incur a HECS-HELP loan but are later found to be ineligible for the loan are able to have their HELP balance re-credited following the invalidation of the loan (sections 97-45 and 97-50 of HESA). However, these sections did not have corresponding provisions in Division 36 of HESA that make it a condition on a grant made to a provider under Part 2-2 (Commonwealth Grant Scheme) that the provider also has to pay back the Commonwealth the amount of the loan and/or any upfront student contribution amount paid by the student.

Section 96-5 was inserted into HESA by the Job-Ready Graduates Act and requires providers to repay the Commonwealth if a provision under Division 97 applies, but does not require providers to repay any student contribution amounts paid by students upfront. This provision conflicts with existing requirements under section 36-24B relating to students who do not supply a tax file number when applying for Commonwealth assistance. To ensure providers face consistent consequences if they breach provisions under Division 97, section 96-5 will be repealed (see item 8), and new sections 36-24BB and 36-24BC will be inserted into HESA. These sections make it a condition on a provider's Part 2-2 grant funding that, if a student's HELP balance is re-credited under sections 97-45 or 97-50 of HESA, the provider must refund any upfront payments made by the student and must repay the Commonwealth any payment it received related to the student's re-credited HELP loan.

If a provider does not comply with the requirements in new sections 36-24BB and 36-24BC, the Minister may decide to take action under Part 2-5 of HESA to reduce the provider's Part 2-2 grant amount or require repayment of part of the provider's Part 2-2 grant.

Repayment requirements for providers where a student is enrolled in a replacement unit and the student's HELP balance is re-credited under sections 97-45 or 97-50, will be set out in the Higher Education Provider Guidelines (see subsections 36-24BB(4) and 36-24BC(4)).

Items 8 and 11 - Section 96-5 and subsection 238-10(1) (table item 6)

Item 8 repeals section 96-5 of HESA. As noted above, this section is no longer required due to the amendments being made by item 7.

Item 11 makes a consequential amendment to subsection 238-10(1) to remove the reference to section 96-5.

Items 9 and 10 - Subsection 137-5(4)

Items 9 and 10 amend subsection 137-5(4) to include references to new sections 36-24BB and 36-24BC. These are consequential amendments required to clarify that a student's HECS-HELP debt in relation to a unit of study is taken to be remitted if section 36-20, 36-24A, 36-24B, 36-24BB or 36-24BC applies to the student (even if subsection 36-20(3), 36-24BB(3) or 36-24BC(3) applies to the provider in relation to the student).

Item 12 - Application provisions

Subitem 12(1) provides that the amendments made by Part 2 of the Bill apply in relation to units of study with a census date on or after 1 January 2021. This provision aligns the application of the new sections in Division 36 with the commencement of sections 97-45 and 97-50 (which were inserted into HESA when Part 1 of Schedule 4 to the Job-Ready Graduates Act commenced on 1 January 2021).

Subitems 12(2) and (3) provide that, if, before the commencement of Part 2 of the Act, a student's HELP balance has been re-credited under sections 97-45 or 97-50 and the provider has repaid the Commonwealth an amount equal to any HECS-HELP assistance to which the student was entitled to for the relevant unit (in accordance with section 96-5), new paragraphs 36-24BB(2)(b) and 36-24BC(2)(b) do not apply to the provider in relation to the student and the unit i.e. the provider does not have to repay the Commonwealth twice.

Applying the provisions in Part 2 of the Bill from 1 January 2021 could impose new obligations on providers to pay students in relation to units whose census dates will have passed before the commencement of the Act, and in relation to which re-crediting has already happened before commencement. However, this application date is required to ensure that students are not financially disadvantaged where their HELP balance has been re-credited, ensuring that their provider has an obligation to repay any amounts the student has paid upfront. Further, the amendments made by Part 2 should not have any practical consequences for students or providers noting that, in circumstances where a student's HELP balance was re-credited under new sections 97-45 and 97-50, providers should have already repaid the Commonwealth (as required under section 96-5) and students (consistent with existing requirements under Division 36). Subitems 12(2) and (3) also clarify that a provider that has repaid the Commonwealth, consistent with section 96-5, does not have an obligation to pay the Commonwealth again due to the operation of new sections 36-24BB and 36-24BC.

Part 3- Other grants

Higher Education Support Act 2003

Item 13 - Section 41-25

Item 13 repeals and substitutes section 41-25 of HESA to provide that a grant under Part 2-3 is made on the following conditions:

•

if the grant is made under a program and the Other Grants Guidelines specify conditions that apply to a grant under that program-on the conditions provided for in the guidelines;

•

if the body receiving the grant is a higher education provider-on the condition that the body must meet the quality and accountability requirements;

•

on such other conditions (if any) as the Minister determines in relation to the grant under subsection 41-25(2).

Previously, HESA provided that Part 2-3 grants could be made under conditions that were either set out in the Other Grants Guidelines or on such other conditions determined by the Minister (but not both). The amendments to section 41-25 are required to ensure that grants under Part 2-3 can be administered flexibly and that bespoke conditions can be applied to manage risks for individual providers where grants are made under programs specified in the Other Grants Guidelines.

Subsection 41-25(3) clarifies that a determination made by the Minister under subsection 41-25(2) is not a legislative instrument. Determinations made by the Minister under subsection 41-25(2) will be made in relation to particular grants to particular providers, and will not be made in relation to classes of grants. Conditions that apply to classes of grants (e.g. in relation to a program under HESA) will be set out in the Other Grants Guidelines (which is a legislative instrument). As such, subsection 41-25(3) is included to assist readers, as the determination is not a legislative instrument within the meaning of subsection 8(1) of the Legislation Act 2003 (as it simply applies the law in particular circumstances and does not determine or alter the law).

Items 14, 15, 16 and 17 - Section 41-40

Items 14 to 17 amend section 41-40 of HESA to provide that any unspent Part 2-3 grant amounts for a year (or part of an unspent grant amount, if determined by the Secretary under new subsection 41-40(1A)) will be rolled over automatically to the next following year unless the Secretary determines otherwise under new subsection 41-40(5). The rolled over amount taken to be granted under subsection 41-40(1) is taken to be granted to the provider under Part 2-3 in respect of the next following year, for the same purpose as the original grant, and under the same conditions as the conditions of the original grant (or such other conditions determined by the Secretary).

Previously, Part 2-3 grant amounts were not rolled over automatically - the Secretary had to determine, under subsection 41-40(1), that a grant amount for a year could be rolled over. These amendments to section 41-40 are required to ensure that Part 2-3 grants can be administered more efficiently, by easing the administrative burden for the Department where grant amounts are unspent in a particular year.

Subsection 41-40(6) of HESA clarifies that a determination made by the Secretary under subsections 41-40(1A) or (5) is not a legislative instrument. These determinations will be made in relation to particular grants rather than classes of grants. As such, these determinations will not be legislative instruments within the meaning of subsection 8(1) of the Legislation Act 2003. Noting this, subsection 41-40(6) is included to assist readers and is merely declaratory of the law, rather than being an exemption from the Legislation Act 2003.

Item 18 - Section 41-50

Item 18 repeals section 41-50 of HESA which required the Minister to prepare a legislative instrument setting out the maximum amounts of all grants which may be paid in the following year for each purpose of grant specified in the table in section 41-10, as this instrument is no longer required. Subsection 41-45(1B) of HESA requires the Minister to, by legislative instrument, determine the total payments that can be paid to providers under Part 2-3 of HESA in respect of a year - this instrument has a similar practical effect to the instrument that was required to be made under section 41-50. As such, repealing section 41-50 will reduce the administrative requirements for making grants under Part 2-3 of HESA, increasing flexibility in the administration of these grants.

Item 19 - Application and transitional provisions

Item 19 provides that the amendments made by Part 3 of the Bill apply in relation to grants made under Part 2-3 of HESA on or after the time when Part 3 commences.

There are some current Part 2-3 grants that have conditions specified in the Other Grants Guidelines and conditions imposed by the Minister under section 41-25. Item 19 also provides that any such conditions made by the Minister (before the commencement of Part 3) will be valid from the commencement of Part 3 for the relevant Part 2-3 grants.

Part 4- Grants for Commonwealth scholarships

Higher Education Support Act 2003

Items 20, 21 and 22 - Subsection 46-35

Items 20 to 22 amend section 46-35 of HESA to provide that any unspent Part 2-4 grant amounts for a year (or part of an unspent grant amount, if determined by the Secretary under new subsection 46-35(1A)) will be rolled over automatically to the next following year unless the Secretary determines otherwise under new subsection 46-35(4). The rolled over amount taken to be granted under subsection 46-35(1) is taken to be granted to the provider under Part 2-4 in respect of the next following year, and under the same conditions as the conditions of the original grant (or such other conditions determined by the Secretary).

Previously, Part 2-4 grant amounts were not rolled over automatically - the Secretary had to determine, under subsection 46-35(1), that a grant amount for a year could be rolled over. These amendments to section 46-35 are required to ensure that Part 2-4 grants can be administered more efficiently, by easing the administrative burden for the Department where grant amounts are unspent in a particular year.

New subsection 46-35(5) of HESA clarifies that a determination made by the Secretary under subsections 46-35(1A) or (4) is not a legislative instrument. These determinations will be made in relation to particular grants rather than classes of grants. As such, these determinations will not be legislative instruments within the meaning of subsection 8(1) of the Legislation Act 2003. Noting this, subsection 46-35(5) is included to assist readers and is merely declaratory of the law, rather than being an exemption from the Legislation Act 2003.

Item 23 - Application provision

Item 23 provides that the amendments made by Part 4 of the Bill apply in relation to grants made under Part 2-4 of HESA on or after the time when Part 4 commences.

Part 5- Other amendments

Higher Education Support Act 2003

Item 24 - Subsections 19-36B(2) and 19-36C(2)

Item 24 amends subsections 19-36B(2) and 19-36C(2) of HESA to refer to all assistance payable under Chapter 3 of HESA (rather than only FEE-HELP assistance). This is a technical amendment and ensures these sections are extended to all providers under HESA.

Items 25, 26 and 27 - Section 30-15 (table item 3), subsection 33-10(1) (table item 3), and section 93-10 (table item 3)

Items 25 to 27 amend sections 30-15, 33-10 and 93-10 of HESA to replace references to 'Foreign Languages' with 'Indigenous and Foreign Languages'. This is a technical amendment to clarify that Indigenous languages are included in funding cluster 3 of HESA and that Indigenous languages are not foreign languages.

Items 28, 29, 30 and 31 - Schedule 1

Items 28 to 30 amend the definition of 'grandfathered student' in subclause 1(1) of Schedule 1 to HESA to clarify that a student is 'grandfathered' if they enrol in a unit of study that has a census date on or after 1 January 2021, and that later unit of study is:

•

part of an ongoing course, honours course, later course or higher qualification course;

•

a replacement unit in relation to an affected unit of that ongoing course, honours course, later course or higher qualification course;

•

part of a replacement course in relation to that ongoing course, honours course, later course or higher qualification course.

Item 31 amends Schedule 1 to HESA to add new subclauses (1C) and (1D). These new subclauses provide that, for the purposes of the definition of 'grandfathered student', an 'ongoing course' or a replacement course in relation to such an ongoing course includes a course that was restructured by the provider on or after 1 January 2021.

Students who continue studying in an 'ongoing course' on or after 1 January 2021 are grandfathered, meaning they will pay the same lower maximum student contribution amounts they were paying prior to 1 January 2021 (when new higher maximum student contribution amounts were introduced through the commencement of the Job-Ready Graduates Act).

These are technical amendments required to make clear that students must not be disadvantaged by administrative decisions made by their providers to restructure a course, and ensure students are grandfathered where a provider defaults and is no longer able to provide the original 'ongoing course'.

Item 32 - Application provisions

Subitem 32(1) provides that the amendment of section 19-36B made by item 24 applies in relation to cold-calls made on or after the commencement of Part 5 of the Act.

Subitem 32(2) provides that the amendment of section 19-36C made by item 24 applies in relation to a contact with a student (within the meaning of paragraph 19-36C(1)(b) of HESA) that occurs on or after the commencement of Part 5 of the Act.

Subitem 32(3) provides that the amendments of sections 30-15 and 33-10 made by items 25 and 26 apply in relation to funding agreements entered into under Part 2-2 of HESA in respect of 2021 and later calendar years, and grants payable under Part 2-2 for 2021 and later calendar years.

Subitem 32(4) provides that amendment of section 93-10 made by item 27 applies in relation to units of study with a census date on or after 1 January 2021.

Subitem 32(5) provides that the amendments of Schedule 1 to HESA made by items 28 to 31 apply in relation to funding agreements entered into under Part 2-2 of HESA in respect of 2021 and later calendar years, grants payable under Part 2-2 for 2021 and later calendar years, and units of study with a census date on or after 1 January 2021.

The provisions in subitems 32(3) to (5) ensure that the application of the amendments made by items 25 to 31 align with the commencement of amendments to sections 30-15, 33-10 and 93-10, and Schedule 1 to HESA made by the Job-Ready Graduates Act.

Schedule 2 - Education services for overseas students amendments

Summary

This Schedule amends the ESOS Act to clarify and extend the application of provisions to former registered providers, and make other minor and technical amendments. The minor and technical amendments include repealing a redundant obligation at section 20, specifying payments to the TPS Director under section 50C must be made out of the account maintained under section 28 and clarifying an offence provision.

Detailed explanation

Education Services for Overseas Students Act 2000

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

Item 1 inserts a new section 7AB after section 7AA to clarify that the ESOS Act continues to apply to former registered providers. Section 7AB provides that the ESOS Act continues to apply in relation to a person or entity that was a registered provider as if the person or entity were still a registered provider for the purposes of dealing with matters outlined in subsection 7AB(2). The reference to a 'person or entity' is intended to capture any person or entity that was a registered provider (within the meaning of the ESOS Act), irrespective of whether that person or entity continues to meet the meaning of 'provider' under section 6E of the ESOS Act.

Paragraph 7AB(2)(a) provides that the application of section 7AB applies for the purposes of dealing with or resolving any matter that arose during, or that relates to, the period when the person or entity was a registered provider. Currently, the ESOS Act includes specific provisions which continue to apply to providers that cease to be a registered provider (former registered providers) - for example, at subsections 46B(7), 46D(8), 46F(6), 47D(6), 47E(5), 47H(6) and 50C(5). The purpose of new section 7AB (and consequential amendments at items 7 and 11) is to continue the existing obligations on former registered providers through a general application provision which applies the entirety of the ESOS Act to former registered providers.

A former registered provider must continue to meet its obligations under the ESOS Act to deal with matters arising from a default that relates to the period the provider was a registered provider under the ESOS Act (e.g. arranging an alternative course or providing a refund to the student). For example, if a registered provider defaults under section 46A and subsequently loses its registration under the ESOS Act (and becomes a former registered provider), that provider must still meet its obligations under section 46B to notify the relevant ESOS agency and TPS Director of a provider default and discharge its obligations under sections 46D and 46F. The offence at section 46E also continues to apply to a former registered provider.

The purposes of paragraph 7AB(2)(b) is to clarify that the ESOS Act continues to apply to former registered providers for the purposes of dealing with or resolving any matter that relates to:

•

tuition fees or other money received by the person or entity, or money owed in accordance with the ESOS Act (whether or not the money is received, or the debt arises, while the person or entity is a registered provider); or

•

a default (whether or not the default occurs while the person or entity is a registered provider).

The intention of subparagraph 7AB(2)(b)(i) is to clarify that former registered providers continue to have obligations under the ESOS Act relating to money received (tuition fees and non-tuition fees) and debts arising under the ESOS Act. This includes that a former registered provider must continue to maintain an account under section 28 and meet the obligations in relation to account money under section 29 despite the person or entity no longer being a registered provider.

It is important that former registered providers continue to maintain a protected amount to enable refunds of overseas student tuition fees. This continuing obligation ensures that assistance to students cannot be extinguished by a provider ceasing their CRICOS registration. This will also ensure that former registered providers have a protected amount to meet any obligations to repay any debt to the TPS Director owed under section 50C. For example, if the registration of a provider is automatically cancelled under section 92 of the ESOS Act for bankruptcy, that provider must still maintain an account under section 28 in accordance with section 29 of the ESOS Act to meet its refund obligations to students and the TPS Director.

Subparagraph 7AB(2)(b)(ii) clarifies that the ESOS Act continues to apply to former registered providers in relation to dealing with or resolving any matter that relates to a default, irrespective of whether the default occurs while the person or entity is a registered provider.

Item 2 - Subsections 8(1) and (2)

Item 2 makes technical amendments to the offence provision at subsections 8(1) and (2) of the ESOS Act to clarify the elements of the offence. Section 8 provides an offence for providing or promoting a course without a registered provider.

The purpose of this amendment is to clarify the policy intent that existing paragraphs 8(1)(a)-(e) are specified as elements of the offence (and so must be raised and proved by the prosecution beyond reasonable doubt), while retaining existing paragraph 8(1)(f) as an offence-specific defence.

It is appropriate for new paragraph 8(1)(b) to be an express element of the offence given a person's registration to provide a particular course at a particular location is a matter of fact and available on the public record (section 14A of the ESOS Act requires the Secretary to maintain the Commonwealth Register of Institutions and Courses for Overseas Students).

It is appropriate for new subsection 8(2) to be characterised as an offence-specific defence, consistent with Part 4.3.1 of the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers, because it relates to a matter that is likely to be peculiarly within the knowledge of the defendant and it would be significantly more difficult and costly for the prosecution to disprove than for the defendant to establish the matter.

Item 3 - Subsection 8(3)

Item 3 makes a consequential amendment to subsection 8(3) as a result of the amendments in item 2.

Item 4 - Section 20

Item 4 repeals section 20 of the ESOS Act. Section 20 became redundant after a change in student visa policy from an automatic to discretionary cancellation of student visa for unsatisfactory course attendance or progress. This change meant that the notices referred to in section 20 would no longer need to be provided. The change in processes had previously been managed by adding subsection 20(4A) to the ESOS Act through the Migration Legislation Amendment (Student Visas) Act 2012, which explicitly forbade the sending of the notices from 2013, however this approach has caused confusion among providers. Repealing section 20 is a more appropriate legislative approach to reflect the existing policy and processes.

Item 5 - Subsection 28(1) (note)

Item 5 makes a consequential amendment to the note under subsection 28(1) as a result of item 6.

Item 6 - At the end of subsection 28(1)

Item 6 adds Note 2 to clarify that the obligation to maintain an account under section 28 may continue to apply to a person or entity that ceases to be a registered provider until matters relating to tuition fees paid into the account in accordance with section 29 have been dealt with or resolved. This reflects the purpose of the new application provision under section 7AB as inserted through item 1.

Items 7 and 11 - Subsections 46B(7), 46D(8), 46F(6), 47D(6), 47E(5), 47H(6) and 50C(5)

Items 7 and 11 repeal subsections 46B(7), 46D(8), 46F(6), 47D(6), 47E(5), 47H(6) and 50C(5) of the ESOS Act as a result of new section 7AB inserted through item 1. These provisions are redundant given the overarching application of section 7AB which will ensure these provisions continue to apply to a person or entity that is no longer a registered provider.

Item 8 - Paragraphs 48(2)(a) and 49(1)(a)

Item 8 amends paragraphs 48(2)(a) and 49(1)(a) to remove reference to 'former registered provider' as a result of new section 7AB inserted through item 1. These references are redundant given the overarching application of section 7AB which will ensure these provisions also apply to a person or entity that is no longer a registered provider.

Items 9 and 10 - Subsection 50C(2)

Item 9 repeals the note under subsection 50C(2) and item 10 inserts new subsection 50C(2A) to expressly provide that if a provider is required to maintain an account in accordance with section 28, the payment of the amount due under subsection 50C(2) must be made out of the account to the extent that there is a sufficient amount standing to the credit of the account. New subsection 50C(2B) clarifies, to avoid any doubt, that subsection 50C(2A) is subject to the requirements under subsections 29(4) and (5). If the provider does not have a sufficient amount standing to the credit of the account to repay the TPS Director, the provider must still pay the TPS Director an amount equal to the amount that the TPS Director paid under section 50B through other means.

Item 12 - Paragraph 108(c)

Item 12 repeals paragraph 108(c) as a consequence of repealing section 20 through item 4.