Explanatory Memorandum
(Circulated by the authority of the Minister for Education and Training, Senator the Hon Simon Birmingham)Outline
The VET Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016 (the Consequential and Transitional Bill) amends the Higher Education Support Act 2003 (the HESA) and other Commonwealth laws, and contains transitional arrangements, consequential on the enactment of the VET Student Loans Act 2016 (the VET Student Loans Act).
The Consequential and Transitional Bill forms part of the Australian Government's reform of the student loan arrangements for vocational education and training (VET) courses, the full policy context and background for which is set out in the Explanatory Memorandum to the VET Student Loans Bill 2016 (the VET Student Loans Bill).
Schedule 1 to the Consequential and Transitional Bill amends the HESA to wind down the existing VET FEE-HELP assistance scheme under Schedule 1A to that Act.
It does this by, firstly, precluding the Minister from approving any new VET providers under Schedule 1A to the HESA after 4 October 2016 (i.e. when the Government announced its reforms to VET student loan arrangements).
Secondly, students will not be entitled to VET FEE-HELP assistance under Schedule 1A to the HESA in relation to units of VET courses which have census days on or after 1 January 2017, unless they are "grandfathered students".
Grandfathered students - students who had commenced VET courses before the end of 2016, have already received VET FEE-HELP assistance for units of those courses, who remain enrolled in those courses with their original provider, and who choose to be grandfathered - will be entitled to VET FEE-HELP assistance under Schedule 1A to the HESA for units with census days before 1 January 2018.
The effect of these amendments is to:
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- close down access to VET FEE-HELP assistance to new VET providers from 5 October 2016; and
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- close down access to VET FEE-HELP assistance to new students for units from 1 January 2017; but
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- enable existing and active students enrolled with existing VET providers to continue to access VET FEE-HELP assistance for units that start before 1 January 2018.
Schedule 1 also amends the HESA to provide for loan debt calculation and repayments arising from the granting of VET student loans under the VET Student Loans Act. Payment of amounts of VET student loans will give rise to HELP debts under Chapter 4 of the HESA, which will be dealt with the same as other HELP debts under the HESA (including how re-crediting of students' FEE-HELP balances affects those debts, and how the debts are repaid voluntarily or through the tax system).
Schedule 1 also makes a number of consequential amendments to the National Vocational Education and Training Regulator Act 2011 (the NVETR Act) and the Student Identifiers Act 2014 (the Student Identifiers Act) to assist in the administration and enforcement of the VET student loans program.
The NVETR Act is amended to make it clear that it is a condition of an NVR RTO's registration under that Act that it comply with the HESA and the VET Student Loans Act. This will clarify the capacity of the National Vocational Education and Training Regulator (the Australian Skills Quality Authority, or ASQA) to take action under the NVETR Act for breaches of the HESA and the VET Student Loans Act.
The Student Identifiers Act is amended to make it clear that student identifiers can be collected, used and disclosed for the purposes of the VET Student Loans Act.
Schedule 2 to the Consequential and Transitional Bill will provide access to the new VET student loans program to certain registered training organisations (RTOs) that are currently approved as VET providers under Schedule 1A to the HESA.
Australian universities - Table A providers and Table B providers under the HESA - as well as TAFEs and other publicly-owned RTOs approved under Schedule 1A to the HESA, will be automatically approved for the purposes of the VET student loans program from 1 January 2017, enabling students enrolled in approved courses at those providers to access VET student loans from the start of next year.
Other RTOs that are currently approved as VET providers under Schedule 1A to the HESA can be approved for the purposes of the VET student loans program for the period from 1 January to 30 June 2017, if the Secretary is satisfied that they meet transitional suitability requirements, and are not excluded because of non-compliance, in accordance with rules made by the Minister.
Current VET providers that don't meet these criteria will not be approved for the purposes of the VET student loans program from 1 January 2017, and will have to seek approval under the VET Student Loans Act as normal - with any such approval not commencing before 1 July 2017.
Financial Impact Statement
The financial impact of the Government's VET student loans program is set out in the Explanatory Memorandum for the VET Student Loans Bill 2016.
Regulation Impact Statement
The Regulation Impact Statement for the Government's VET student loans program appears in the Explanatory Memorandum for the VET Student Loans Bill 2016.
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