Explanatory Memorandum
(Circulated by the authority of the Minister for Education and Youth, the Honourable Alan Tudge MP)OUTLINE
The purpose of the Education Legislation Amendment (2021 Measures No. 2) Bill 2021 (the Bill) is primarily to amend the Higher Education Support Act 2003 (HESA) and make minor amendments to the Education Services for Overseas Students Act 2000 (ESOS Act).
The HESA amendments enable former permanent humanitarian visa holders who transition to a resident return visa to retain their eligibility for Higher Education Loan Program (HELP) assistance. 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.
HESA is the main piece of legislation governing Commonwealth funding of higher education in Australia. HESA facilitates the provision of Commonwealth financial support to higher education providers through Government subsidies and provides loans to higher education students to cover their tuition and other fees.
Schedule 1, Part 1 of the Bill amends the citizenship or residency requirements for HELP under HESA to allow the Minister to extend the availability of HELP from 1 January 2022, via legislative instrument, to holders of certain visas (such as resident return visas), who previously held permanent humanitarian visas, where that visa was not cancelled.
HELP is available to higher education students meeting the citizenship or residency requirements of HESA, which includes permanent humanitarian visa holders. Permanent humanitarian visa holders who travel outside of Australia outside of the travel facility of their visa must apply for a resident return visa to continue to have permanent residence in Australia on their return. The resident return visa is a permanent visa, and permanent visa holders are not generally eligible for HELP. As a permanent humanitarian visa holder in this situation would have retained their HELP eligibility if they had not travelled outside of their travel facility, this measure allows commencing or continuing students who are former permanent humanitarian visa holders to retain their eligibility for HELP loans.
Schedule 1 of the Bill also includes the following minor and technical amendments to HESA:
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- Part 2 amends Division 36 of HESA to make it a condition of a provider's Part 2-2 (Commonwealth Grant Scheme) funding that, if a person'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 person and must repay the Commonwealth any payment it received related to the person's re-credited HELP loan. This Part also repeals section 96-5 of HESA which is no longer required due to the amendments being made to Division 36 and makes other minor consequential amendments to HESA;
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- Part 3 amends Division 41 of HESA to streamline the provision of grants under Part 2-3 of HESA. Specifically, this Part:
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- amends section 41-25 of HESA to provide that a grant made under Part 2-3 of HESA may be made on conditions set out in the Other Grants Guidelines and on any conditions determined by the Minister (previously conditions had to be set out in the Other Grants Guidelines or as determined by the Minister, but could not be both);
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- amends section 41-40 of HESA to provide that any unspent Part 2-3 grant amounts for a year will be rolled over automatically unless the Secretary of the Department of Education, Skills and Employment (Department) determines otherwise (previously the Secretary had to determine that a grant amount for a year could be rolled over); and
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- 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 (noting a similar instrument is already required under subsection 41-45(1B));
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- Part 4 amends section 46-35 of HESA to provide that any unspent Part 2-4 grant amounts for a year will be rolled over automatically unless the Secretary of the Department determines otherwise (previously the Secretary had to determine that a grant amount for a year could be rolled over); and
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- Part 5 amends:
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- 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 makes a technical correction and ensures these measures are extended to all providers under HESA;
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- sections 30-15, 33-10 and 93-10 of HESA to replace the words 'Foreign Languages' with 'Indigenous and Foreign Languages' - this makes a technical correction to clarify that Indigenous languages are included in funding cluster 3 and that Indigenous languages are not foreign languages; and
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- Schedule 1 of HESA to update the definition of 'grandfathered student' to clarify that an 'ongoing course' includes a course that has been restructured by a higher education provider and to ensure that students do not lose their status as grandfathered students as a result of a default by a provider.
Schedule 2 of the Bill amends the ESOS Act to clarify and extend its application to former registered providers, and make other minor and technical amendments.
The Tuition Protection Service (TPS) assists overseas students in instances when an education provider is unable to fully deliver a course of study. The TPS assists students either to complete their studies with an alternative education provider, or receive a refund of unspent tuition fees. The TPS Director is appointed by the Minister and oversees the operation of the TPS.
Education providers are required to retain student tuition fees they receive before the student commences the course, as a protected amount in an account maintained in accordance with section 28 of the ESOS Act. This ensures there is a sufficient amount of funds in a provider's account to meet their tuition fee repayment obligations under the ESOS Act. Providers must have sufficient financial resources to repay all paid tuition fees from every overseas or intending overseas student who has not yet begun their course. This ensures that, if the student does not proceed or if a provider closes, funds are available to repay their prepaid tuition fees.
This Bill strengthens the operation of the ESOS Act by clarifying and extending its application to former registered providers, enabling matters that arose during a provider's Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS) registration period (as a registered provider) to be resolved after CRICOS registration has ceased. Former registered providers will still be required to meet certain obligations under the ESOS Act. These obligations include maintaining the protected amount beyond their CRICOS registration to enable refunds of overseas student tuition fees. This means that obligations to provide assistance to students cannot be extinguished by a provider ending their CRICOS registration.
The Bill also clarifies the policy intention for the protected amount to be used to repay any debts to the TPS Director that have arisen due to the TPS Director having provided refunds to students where a provider failed to meet an obligation to do so. If there is not sufficient money held in the account, providers and liquidators will still be required to pay the amount through other means.
Requiring providers in liquidation to pay back the TPS Director, from the protected amount, for refunds the Director paid from the Overseas Students Tuition Fund will reduce imposts on the Overseas Students Tuition Fund, increasing its sustainability over time and limiting the likelihood that it will need to be 'topped up' from the public purse.
Other minor amendments will facilitate the efficient functioning of the ESOS legislative framework. The Bill repeals section 20 which had become redundant after a change in student visa policy from an automatic to discretionary cancellation of a 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), which explicitly forbade the sending of the notices, but this approach has caused confusion among providers. A student's visa will continue to be considered for cancellation under the existing discretionary visa cancellation framework in the Migration Act 1958 if they do not meet the course attendance or progress conditions of their visa. Repealing section 20 is a more appropriate legislative approach to enact this policy intent and end provider confusion.
To inform the operation of the discretionary visa cancellation framework, providers will continue to have an obligation to report students who do not comply with the course attendance or course progress requirements through the Provider Registration and International Student Management System. Students must continue to be informed in writing of the intention to report and be able to access a complaints and appeals process under the National Code of Practice for Providers of Education and Training for Overseas Students 2018.
The Bill also makes a technical amendment to section 8 of the ESOS Act to clarify the elements of the offence of providing or promoting a course without a registered provider, including that it is the responsibility of the prosecution to prove that a provider is not registered to deliver a course at a particular location. This amendment clarifies the Government's existing policy intent for the application of this provision.
FINANCIAL IMPACT STATEMENT
The amendments to the Higher Education Support Act 2003 have negligible financial implications. There are no financial impacts associated with the amendments to the Education Services for Overseas Students Act 2000.