House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Tertiary Education, Skills, Science and Research, Minister for Small Business, The Honourable Chris Bowen, MP)

Outline and financial impact

Outline

The amendments to the Higher Education Support Act 2003 (HESA) in Schedule 1 of the Bill are made with respect to OS-HELP assistance. OS-HELP is a loan program to assist eligible students to pay expenses associated with undertaking overseas study as part of their higher education.

The purpose of the Bill is to amend Part 3-4 of HESA to expand eligibility for OS-HELP assistance and provide additional incentives for university students to undertake part of their course of study in Asia from 1 January 2014.

The Bill removes the requirement that a student must be enrolled in an undergraduate course of study to be entitled to OS-HELP assistance. This will allow postgraduate Commonwealth supported students to be eligible for OS-HELP assistance.

The Bill removes the requirement that a student must be enrolled at an overseas campus of an Australian higher education provider or with an overseas higher education institution to be eligible for OS-HELP. The study undertaken outside Australia will continue to need to count towards the course requirements of the course of study that the student is enrolled in with the home provider. This will allow students to undertake activities such as clinical placements and internships.

The amount of study that a student must have remaining upon completion of their overseas study will be reduced, from 0.5 Equivalent Full Time Student Load (EFTSL) units to 0.125 EFTSL. This will increase eligibility for OS-HELP assistance, particularly for students who follow a non-traditional pattern of study or who wish to undertake short periods of study overseas.

As part of the Government's response to the Australia in the Asian Century White Paper, the Bill contains additional assistance for students to undertake overseas study in Asia. The Bill increases the maximum OS-HELP loan amount for students studying in Asia to $7,500. The Bill also provides that the OS-HELP Guidelines may specify whether overseas study undertaken at a particular place is undertaken in Asia.

The Bill further provides for a supplementary loan of up to $1000 for students who undertake intensive study in an Asian language in preparation for undertaking overseas study in Asia. A student must be selected for an OS-HELP (overseas study) loan for study in Asia in order to be eligible for the supplementary loan. The Bill provides that the OS-HELP Guidelines may specify circumstances in which a student undertakes intensive study in an Asian language in preparation for undertaking overseas study in Asia.

As the increased amounts and expanded entitlements contained in the Bill will take place from 1 January 2014, in order to allow students to begin applying for OS-HELP assistance as amended by the Bill in anticipation for their study in the year 2014, the application provisions provide that:

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the amendments made to Part 3-4 of HESA apply to OS-HELP Assistance paid to a student on or after January 2014 if the student is selected by a home provider on or after 1 January 2014 for an amount for overseas study or a supplementary amount for Asian language study and the study to which the assistance relates is completed on or after 1 January 2014; and

•

the maximum loan amounts for OS-HELP for overseas study and OS-HELP for Asian language study will be indexed under Part 5-6 of HESA. As these amounts will not be paid until after 1 January 2014, the Bill will provide that they will not be indexed until 1 January 2015.

Financial impact

The amendments result in an expense of $10.59 million over four years (2013-14 to 2016-17).