House of Representatives

Explanatory Memorandum

Circulated By Authority of the Minister for Tertiary Education, Skills, Jobs and Workplace Relations

Schedule 2 - Amendments relating to Student Learning Entitlement

Summary

Schedule 2 of the Bill will repeal Part 3-1 of HESA and amend other provisions of the Act to remove Student Learning Entitlement (SLE) from HESA. These amendments will have the result that higher education students will not have a limit placed on how much study they can undertake as a Commonwealth supported student.

Savings and transitional provisions related to the abolition of SLE will make clear that the fact that a person has used some or all of his or her SLE will have no impact whatsoever on his or her capacity to be a Commonwealth supported student under HESA as amended.

Savings and transitional provisions will preserve the operation of the former provisions of HESA, including any rights and obligations in relation to any reviewable decision under HESA in respect of a year prior to 2012.

Background

The SLE is a mechanism for limiting people's eligibility to undertake higher education study as a Commonwealth supported student. Generally, an eligible person starts with an SLE equivalent to seven years full-time study. This is progressively reduced as the person completes units of study in which he or she is enrolled as a Commonwealth supported student. HESA also provides various ways in which a person may obtain more SLE.

With the abolition of SLE and the consequential removal of concepts that were dependent on or influenced by SLE, Division 36 is being restructured to focus instead on methodologies for refunding student contribution amounts. This previously was achieved through provisions dealing with the re-crediting of SLE. The concept of re-crediting SLE will no longer have any relevance.

Some concepts currently within Chapter 3, such as EFTSL are being relocated to other parts of HESA because they need to be retained. The concept of EFTSL is an integral part of the Commonwealth Grant Scheme and HELP schemes.

Division 36 as amended also includes slightly revised provisions dealing with tuition assurance arrangements including where replacement units are a possible alternative to refunding student contributions and Commonwealth contributions. These provisions are intended to have the same effect in respect of refunding student contribution amounts as in HESA prior to the amendments to be made by this Bill.

Higher education providers are responsible for deciding which students are Commonwealth supported, but must do so in accordance with the rules laid out in HESA. One of these rules is that a provider may only advise a student that they are Commonwealth supported in a unit of study if the student has an amount of SLE equivalent to or greater than the equivalent full-time student load (EFTSL) value of the unit of study.

Under HESA, the Commonwealth pays a higher education provider a subsidy in respect of the units of study in which a Commonwealth supported student is enrolled (through the Commonwealth Grant Scheme) and the student is required to pay a 'student contribution amount' in respect of those units. The student thus only makes a contribution to the cost of their study. They are not required to pay the 'full cost'.

Commonwealth supported students can obtain assistance to pay their 'student contribution amounts' under the HECS-HELP scheme. In contrast, students who are not Commonwealth supported are required to pay the full cost of their study (the 'tuition fee') and, if eligible, may obtain assistance to pay these fees under the FEE-HELP scheme.

Detailed explanation

Part 1 - Amendments

Higher Education Support Act 2003

Item 1 - Section 3-10

Section 3-10 of HESA outlines the assistance to students that is covered by Chapter 3 of HESA . Item 1 amends section 3-10 by omitting the reference to the Student Learning Entitlement.

Items 2 and 3 - Subparagraph 19-45(1)(c)(i) and Paragraph 19-45(4)(a)

Section 19-45 of HESA requires higher education providers to have grievance and review procedures . Items 2 and 3 omit the references to section 36-22 in subparagraph 19-45(1)(c)(i) and paragraph 19-45(4)(a) and replaces them with a reference to section 36-20. This is a consequential amendment to Item 9 which repeals sections 36-20, 36-22, 36-22A and 36-23 and replaces them with new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B, and 36-24C.

The new section 36-20 requires higher education providers to repay certain amounts to students and the Commonwealth if students are unable, due to special circumstances, to complete the requirements of units of study.

Items 4 and 5 - Paragraphs 19-50(1)(a) and 19-50(2)(c)

Section 19-50 of HESA requires a higher education provider to appoint review officers to undertake reviews of decisions made by the provider . Items 4 and 5 omit the references to section 36-22 in paragraphs 19-50(1)(a) and 19-50(2)(c) and replace them with a reference to section 36-20. This is a consequential amendment to Item 9 which repeals sections 36-20, 36-22, 36-22A and 36-23 and replaces them with new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B, and 36-24C.

The new section 36-20 requires higher education providers to repay certain amounts to students and the Commonwealth if students are unable, due to special circumstances, to complete the requirements of units of study.

Item 6 - Subsection 19-60(1)

Subsection 19-60(1) of HESA requires a higher education provider to comply with the information privacy principles contained in section 14 of the Privacy Act 1988 with respect to certain personal information it obtains . Item 6 omits the reference to section 36-22 in subsection 19-60(1) and replaces it with a reference to section 36-20. This is a consequential amendment to Item 9 which repeals sections 36-20, 36-22, 36-22A and 36-23 and replaces them with new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B, and 36-24C.

The new section 36-20 requires higher education providers to repay certain amounts to students and the Commonwealth if students are unable, due to special circumstances, to complete the requirements of units of study.

Item 7 - Paragraph 33-30(2)(b)

Section 33-30 of HESA covers how to work out the number of Commonwealth supported places a higher education provider provides during a year . Item 7 omits the reference to subsection 73-15(2) in paragraph 33-30(2)(b) and replaces it with a reference to subsection 169-28(2). This is a consequential amendment to Item 20 which inserts new sections 169-27 and 169-28 into HESA. New section 169-28 (which replicates section 73-15, which is repealed by Item 14) sets out the meaning of EFTSL value.

Item 8 - Paragraph 36-10(1)(d)

Pursuant to subsection 36-10(1) of HESA, a higher education provider must not advise a person that he or she is a Commonwealth supported student in relation to a unit of study unless certain criteria are satisfied. This includes the criteria in paragraph 36-10(1)(d), which are that the unit:

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is covered by a person's Student Learning Entitlement; or

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wholly consists of work experience in industry; or

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is undertaken as part of an enabling course.

Item 8 repeals paragraph 36-10(1)(d) in its entirety. This is a consequential amendment to Item 14 that repeals Part 3-1 about the Student Learning Entitlement in its entirety. Additionally, work experience in industry and enabling courses do not fall within a person's Student Learning Entitlement and so, with the abolition of the Student Learning Entitlement, no longer need to be included within paragraph 36-10(1)(d).

Item 9 - Sections 36-20, 36-22, 36-22A and 36-23

Item 9 repeals sections 36-20, 36-22, 36-22A and 36-23 and substitutes new sections 36-20, 36-21, 36-22, 36-23, 36-24A, 36-24B and 36-24C.

With the abolition of the SLE and because work experience in industry and enabling courses do not fall within a person's SLE, sections 36-20 (Providers to repay amounts if Student Learning Entitlement is re-credited), 36-22 (Providers to repay amounts etc. for units wholly consisting of work experience in industry - special circumstances), 36-22A (providers to repay amounts etc. for units wholly consisting of work experience in industry - provider ceases to provide course) and 36-23 (Providers to repay amounts etc. for units wholly consisting of work experience in industry - no tax file numbers) are no longer required.

Important concepts that are currently set out in these provisions are being retained in the new provisions.

These concepts relate to what happens when a student remains enrolled in a unit of study at the end of the 'census date' but is unable to complete the unit in prescribed circumstances.

The new provisions are as follows:

36-20 Providers to repay amounts-special circumstances

New section 36-20 concerns when higher education providers must repay student contribution amounts to a student and HECS-HELP assistance to the Commonwealth in circumstances where special circumstances apply to the student.

Given that SLE will be abolished, where special circumstances apply to a student, the re-crediting of that person's SLE in respect of a unit of study (under the current Division 79) no longer applies to give effect to:

(a)

the reduction of any HECS-HELP debt of a Commonwealth supported student relating to that unit of study; or

(b)

a higher education provider's obligation to repay any student contribution amounts or payments it receives in respect of the HECS-HELP assistance for the unit.

Therefore the provisions under the new section 36-20 now give effect to those requirements.

Additionally, under the SLE regime, units of study wholly consisting of work experience in industry (WEI units) did not reduce a person's SLE. These amendments also give effect to the new regime where re-crediting debts associated with WEI units are to be addressed in the same manner as other units of study.

New subsection 36-20(5) clarifies that if a determination made under subsection 36-20(1) (that section 36-20 applies to a person) is made in writing the determination is not a legislative instrument.

Subsection 36-20(5) is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The subsection is merely declaratory of the law.

36-21 Special circumstances

New section 36-21 sets out what will constitute 'special circumstances' for the purposes of new section 36-20. The content of the special circumstances requirements in new subsection 36-21(1) are as follows:

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the circumstances are beyond the person's control; and

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the circumstances do not make their full impact on the person until on or after the census date for the unit of study in question; and

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these circumstances make it impracticable for the person to complete the unit of study during the relevant semester.

New subsection 36-21 provides that the Administration Guidelines may set out the circumstances whereby a higher education provider may be satisfied that these special circumstances criteria have been met. New subsection 36-21 also provides that a provider's decision on special circumstances must be in accordance with these Guidelines. A note to new subsection 36-21 states that the Guidelines would also have effect for the purposes of re-crediting a person's FEE-HELP balance (see new subsection 104-30(2) to be inserted by Item 16).

It is intended that relevant information about special circumstances from the Student Learning Entitlement Guidelines will be transferred into revised Administration Guidelines for registration on the Federal Register of Legislative Instruments and tabling in Parliament prior to the commencement of Schedule 2 from 1 January 2012.

36-22 Application period

New section 36-22 sets out the application period for the purposes of a person applying to a higher education provider for repayment of his or her student contribution amount, or remission of his or her HECS-HELP debt in respect of a unit of study.

If the person has withdrawn his or her enrolment and the provider has given the person notice that the withdrawal has taken effect from a particular day then the application period is 12 months after the day specified in a notice given to the person by the provider as the day when the withdrawal takes effect.

If the person has not withdrawn his or her enrolment or the provider does not give the person a notice that the withdrawal has taken effect from a particular day, then the application period is 12 months after the end of the period when the person undertook or was to have undertaken the unit.

These timeframes are the same as those specified in to be repealed subsections 36-22(5) and (6).

36-23 Dealing with applications

New section 36-23 sets out how higher education providers are to consider special circumstances applications. The application is to be considered as soon as possible and a statement of reasons for the decision is to be provided. New section 36-23 contains the same requirements as the to be repealed subsections 36-22(7) and (8).

36-24A Providers to repay amounts - provider ceases to provide course

New subsection 36-24A requires higher education providers, in the event that they cease to provide the course, to repay student contribution amounts to Commonwealth supported students and to repay HECS-HELP assistance amounts to the Commonwealth.

Given that SLE will be abolished, where a provider ceases to provide a course of which a unit forms part, the re-crediting of a person's SLE in respect of that unit of study (under the current Division 79) no longer applies to give effect to:

(a)

the reduction of any HECS-HELP debt of a Commonwealth supported student relating to that unit of study; or

(b)

a higher education provider's obligation to repay any student contribution amounts or payments it receives in respect of the HECS-HELP assistance for the unit.

Therefore the provisions under the new section 36-24A now give effect to those requirements.

Additionally, under the SLE regime, units of study wholly consisting of work experience in industry (WEI units) did not reduce a person's SLE. These amendments also give effect to the new regime where re-crediting debts associated with WEI units are to be addressed in the same manner as other units of study.

New subsection 36-24A(3) clarifies that if a determination made under subsection 36-24A(1) (that section 36-24A applies to a person) is made in writing, the determination is not a legislative instrument.

Subsection 36-24A(3) is included to assist readers, as the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The subsection is merely declaratory of the law.

A provider's discretion under this provision is contained. The provider must apply the provision in defined circumstances. On that basis, the decision is not reviewable.

36-24B - Providers to repay amounts-no tax file numbers

New subsection 36-24B requires higher education providers, in the event that they cancel a person's enrolment under subsection 193-5(1) (which concerns there being no entitlement to HECS-HELP assistance for students who do not have a tax file number), to repay student contribution amounts to the person and to repay HECS-HELP assistance amounts to the Commonwealth.

Given that SLE will be abolished, where a provider cancels a person's enrolment in a unit of study under subsection 193-5(1) of the Act, the re-crediting of that person's SLE in respect of that unit of study (under the current Division 79) no longer applies to give effect to:

(a)

the reduction of any HECS-HELP debt of a Commonwealth supported student relating to that unit of study; or

(b)

a higher education provider's obligation to repay any student contribution amounts or payments it receives in respect of the HECS-HELP assistance for the unit.

Therefore the provisions under the new section 36-24B now give effect to those requirements.

36-24C - Secretary may act if provider is unable to

New section 36-24C provides that if a higher education provider cannot act for one of the purposes set out in the following (new) provisions, then the Secretary may act as though the references in those provisions to the provider are instead references to the Secretary:

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subsection 36-20(1)

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section 36-21

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section 36-22

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section 36-23

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subsection 36-24A(1)

Item 10 - Paragraph 36-30(1)(a)

Subsection 36-30(1) of HESA concerns the requirement for higher education providers to enrol a person as a Commonwealth supported student in a unit of study where certain criteria are satisfied . Item 10 amends subsection 36-30(1) to remove the reference in paragraph 36-30(1)(a) to the requirement that the unit of study be covered by the person's SLE.

Item 11 - Paragraph 36-30(3)

Subsection 36-30(3) of HESA concerns the requirement for higher education providers to enrol a person as a Commonwealth supported student in a unit of study where certain criteria are satisfied . Item 11 amends subsection 36-30(3) to remove the reference in paragraph 36-30(3) to the requirement that the unit of study be covered by the person's SLE.

Items 12 and 13 - Section 65-1

Section 65-1 of HESA explains what Chapter 3 of HESA (assistance to students) is about . Item 12 amends the first paragraph of section 65-1 so that it will read " This Chapter provides for 3 kinds of assistance that the Commonwealth provides to students " (ie removing the reference to the SLE).

Item 13 deletes the second paragraph of section 65-1 (ie omits the words " A sufficient Student Learning Entitlement is required for a student to access HECS-HELP assistance under this Chapter. It also enables a student to access places that are funded under Part 2-2 (Commonwealth Grant Scheme) ").

Item 14 - Part 3-1

Item 14 repeals Part 3-1 of HESA which deals with the SLE.

Item 15 - Paragraph 90-1(d)

Section 90-1 of HESA sets out criteria concerning a student's entitlement to HECS-HELP assistance for a unit of study . Item 15 repeals paragraph 90-1(d) to remove the redundant criterion that the unit of study be covered by the student's SLE or consist wholly of work experience in industry.

Item 16 - Subsection 104-30(2)

Section 104-30 concerns special circumstances for the purposes of paragraph

104-25(1)(c) - re-crediting a person's FEE-HELP balance. These special circumstances are specified in subsection 104-30(1) and are as follows:

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the circumstances are beyond the person's control; and

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the circumstances do not make their full impact on the person until on or after the census date for the unit of study in question; and

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these circumstances make it impracticable for the person to complete the unit of study during the relevant semester.

Item 16 repeals and substitutes a new subsection 104-30(2) to provide that, if the Administration Guidelines (instead of the Student Learning Entitlement Guidelines) set out the circumstances whereby a higher education provider may be satisfied that special circumstances criteria have been met for the purposes of new paragraphs 36-21(1)(a), (b), or (c) (see Item 9), then these circumstances will also apply to decisions made by a provider under section 104-30.

The note to new subsection 104-30(2) also makes it clear that the special circumstances criteria in new paragraphs 36-21(1)(a), (b), and (c) are identical to the special circumstances criteria in amended paragraphs 104-30(1)(a), (b) and (c).

It is intended that relevant information about special circumstances from the Student Learning Entitlement Guidelines will be transferred into revised Administration Guidelines for registration on the Federal Register of Legislative Instruments and tabling in Parliament prior to the commencement of Schedule 2 for 1 January 2012.

Item 17 - Subsections 137-5(4) and (5)

Section 137-5 of HESA concerns HECS-HELP debts and subsections 137(4) and (5) concern the remission of HECS-HELP debts where a person's SLE is re-credited or where the person's unit of study consists wholly of work experience in industry.

Item 17 repeals subsections 137(4) and (5) to remove the redundant references to the SLE and work experience in industry and substitutes a new subsection 137-5(4). The new subsection 137-5(4) provides that a person's HECS-HELP debt for a unit of study is taken to be remitted if the (new) sections 36-20, 36-24A, or 36-24B apply (see Item 9) - even if subsection 36-20(3) applies to the person's higher education provider . Item 17 also inserts a new subheading that reads " Remission of HECS-HELP debts " at the start of new subsection 137-5(4).

Item 18 - Subsection 169-5(4)

Section 169-5 of HESA concerns the notices that higher education providers must give as required by the Administration Guidelines . Item 18 amends subsection 169-5(4) to remove the redundant reference to the SLE.

Item 19 - Subsection 169-10(5)

Section 169-10 of HESA concerns the correction of notices given under section 169-5 . Item 19 amends subsection 169-10(5) to remove the redundant reference to the SLE.

Item 20 - After section 169-25

Item 20 inserts new sections 169-27 (Meaning of EFTSL) and 169-28 (Meaning of EFTSL value) after section 169-25.

Item 14 repeals Part 3-1 of HESA in its entirety (Student Learning Entitlement). This includes section 73-10 and 73-15 which, with one exception, are identical to new sections 169-27 and 169-28 respectively. This exception is that the reference to the (redundant) Student Learning Entitlement Guidelines in subsection 73-15(4) is changed to a reference to the Administration Guidelines in new subsection 169-28(4).

In essence, therefore , Item 20 moves sections 73-10 and 73-15 to become new sections 169-27 and 169-28 respectively. The concepts of EFTSL and EFTSL value need to be retained as they are central to the operation of the demand driven funding system under Part 2-2 of HESA and to the HECS-HELP scheme.

Item 21 - Subsection 193-5(1) (notes 1 and 2)

Section 193-5 concerns there being no entitlement to HECS-HELP assistance for students who do not have tax file numbers.

Item 21 repeals the two notes to subsection 193-5(1) thereby removing the redundant references to SLE and work experience in industry and inserts a new note. The new note states that if a person's enrolment is cancelled under section 193-5, the higher education provider may still have payment obligations by virtue of (new) section 36-24B (see Item 9).

Item 22 - Section 206-1 (table items 1A and 1)

The table at section 206-1 sets out those decisions under HESA that are reviewable decisions and the decision maker for those reviewable decisions.

Item 22 amends the table to repeal items 1A and 1 and to substitute a new item 1A.

Repealed table item 1A concerns decisions that section 36-22 does not apply to a person. Section 36-22 is being repealed by Item 9 and concerns special circumstances for units of study consisting wholly of work experience in industry.

Repealed table item 1 concerns decisions under section 79-1 to refuse to re-credit a person's SLE. Section 79-1 is in Part 3-1 of HESA which is to be repealed by Item 14.

Substituted table item 1A provides that a decision that section 36-20 does not apply to a person is a reviewable decision and that the decision maker is either the person's higher education provider, or the Secretary (if the Secretary made that decision). Section 36-20 is to be inserted by Item 9.

Item 23 - Subsection 209-1(2) (note 1)

Section 209-1 specifies who the reviewer of a reviewable decision is. Note 1 to subsection 209-1(2) states that the Secretary may delegate to a higher education provider's review officer powers to reconsider decisions under section 36-22 or Chapter 3.

Item 23 amends this note to change the reference to section 36-22 to section 36-20. This is a consequential amendment to Item 9 which repeals section 36-22 and reinserts it as new section 36-20 (with a few minor changes).

Item 24 - Paragraph 238-1(2)(a)

Section 238-1 provides for delegations by the Secretary of the Secretary's powers under HESA. Subsection 238-1(2) provides that the Secretary may in writing delegate to a higher education provider's review officer the Secretary's powers under Division 209 to reconsider the provider's decisions under section 36-22 or Chapter 3.

Item 24 amends this note to change the reference to section 36-22 to section 36-20. This is a consequential amendment to Item 9 which repeals section 36-22 and reinserts it as new section 36-20 (with a few minor changes).

Items 25 and 26 - Subsection 238-10(1) (table item 1) and (table item 10)

Subsection 238-10 contains a table setting out the Guidelines the Minister may make under HESA. Column 3 of this table sets out the chapter/part/section of HESA for which the Guidelines listed in Column 2 of the table can be made.

Item 25 amends column 3 of item 1 of the table to add in a reference to section 36-21 with respect to the Administration Guidelines. This is a consequential amendment to Item 9 which inserts a new section 36-21.

Item 26 repeals table item 10 of the table which provided for the redundant Student Learning Entitlement Guidelines.

Items 27, 28, 29, 32, 33, 34, 35 and 36 - Subclause 1(1) of Schedule 1 - definitions of additional SLE; available; covered; eligible person; life long SLE; ordinary SLE; SLE; and Student Learning Entitlement

These items amend the dictionary at subclause 1(1) of Schedule 1 of HESA to repeal the following definitions that will be redundant with the abolition of the SLE:

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additional SLE

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available

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covered

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eligible person

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life long SLE

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ordinary SLE

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SLE

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Student Learning Entitlement

Items 30 and 31 - Subclause 1(1) of Schedule 1 - definitions of EFTSL and EFTSL value

Items 30 and 31 amend the dictionary at subclause 1(1) of Schedule 1 of HESA to correct the definitions of EFTSL and EFTSL value by inserting reference to the new relevant provisions relating to these terms as follows:

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for EFTSL the correct reference should be section 169-27 and not section 73-10 (see Item 20); and

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for EFTSL value the correct reference should be section 169-28 and not section 73-15 (see Item 20).

Part 2 - Application, savings and transitional provisions

Item 37 - Definitions

Item 37 provides that in Part 2 of Schedule 2:

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commencement means the commencement of Schedule 2

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new Act means HESA as it will be in force on and after the commencement of Schedule 2

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old Act means HESA as it was in force immediately before the commencement of Schedule 2.

These definitions therefore apply Items 39, 40 and 41 of Part 2 of Schedule 2.

Item 38 - Application of amendments - general

Item 38 makes it clear that the amendments made by Schedule 2 in relation to the SLE apply in relation to units of study which have census dates that fall on or after 1 January 2012. This means that the current (old) provisions would continue to apply to units of study with a census date before 1 January 2012 and that these (old) provisions relating to re-crediting (Division 79 - In what circumstances can a person's Student Learning Entitlement be re-credited ?) and requirements placed on providers relating to re-crediting (eg 'old' section 36-22) would still apply to those units of study.

Item 39 - Saving - review procedures and appointments of review officers

The effect of Item 39 is to save review procedures and appointments of review officers that were in force immediately before the commencement of Schedule 2 (in so far as they relate to review of decisions made under section 36-22 of the old Act) so that those procedures and appointments have effect on and after commencement of Schedule 2 as if the procedure or appointment relates to decisions made under section 36-20 of the old Act.

Item 40 - Saving - determination of EFTSL values

The effect of Item 40 is to save a determination of an EFTSL value of a unit of study that was in force immediately before commencement of Schedule 2 under section 73-15 of the old Act so that a determination has effect on or after commencement of Schedule 2 as if a determination were made in accordance with section 169-28 of the new Act.

Item 41 - Effect of abolition of SLE on persons who have used some or all of their SLE

Item 41 clarifies that the amendments made by Schedule 2 do not in any way serve to prevent anyone being enrolled as a Commonwealth supported student in the future, even though they may have used up all of some of their SLE before commencement.