House of Representatives

Explanatory Memorandum

(Circulated by authority of the Minister for Employment, Skills, Small and Family Business, Senator the Hon Michaelia Cash)

Schedule 2 - HELP Tuition Protection

Summary

Schedule 2 to the Bill comprises two parts. Division 1 of Part 1 sets out the main amendments to HESA, which repeal all provisions in HESA that relate to the existing tuition protection requirements and inserts new provisions that provide for the new requirements relating to tuition protection for students. Division 2 of Part 1 sets out the application and transitional provisions, which ensure the repealed provisions of HESA continue to apply where a higher education provider ceased to provide a unit of study prior to the commencement of Part 1. Part 2 replaces references to FEE-HELP balance with references to HELP balance, an amendment which is due to commence on 1 January 2020.

Detailed Explanation

Part 1 - Main amendments

Division 1 - Amendments

Higher Education Support Act 2003

Item 1 - Subsection 5-1(2)

Item 1 inserts a new table item 2A in the 'Application of Act to Table C providers' table. This table item states that section 19-66A (tuition protection requirements) applies to the Australian branch of Table C providers, and to students undertaking or proposing to undertake units of study at those branches. This is a consequence of the repeal of section 19-40 (in Subdivision 19-D of HESA) and the enactment of a new section 19-66A in its place (in Subdivision 19-E of HESA).

Item 2 - Paragraph 16-25(1)(c)

Item 2 repeals paragraph 16-25(1)(c), and substitutes a new paragraph 16-25(1)(c) requirement that the Minister may approve a body as a higher education provider if, amongst other things, the Minister is satisfied that a body will meet the tuition protection requirements (if applicable).

Item 3 - Sections 16-30 and 16-31

Item 3 repeals sections 16-30 and 16-31, and substitutes a new section 16-30 that defines the new tuition protection requirements for the purposes of HESA. The tuition protection requirements are the requirements set out in Part 5-1A of HESA (including in the Higher Education Provider Guidelines made for the purposes of that Part), as well as any requirements set out in the Higher Education Provider Guidelines for the purposes of paragraph 16-30(b).

Item 4 - Section 19-40

Item 4 repeals section 19-40, which required higher education providers, other than those higher education providers which were exempt, to comply with the tuition assurance requirements. Section 19-40 is replaced by section 19-66A (see item 5).

Item 5 - Before section 19-67

Item 5 inserts a new section 19-66A in subdivision 19-E of Division 19 of HESA.

New subsection 19-66A(1) provides that a higher education provider to whom Part 5-1A applies must comply with the tuition protection requirements.

A note explains that section 166-5 identifies providers to whom Part 5-1A applies.

Contravention of subsection 19-66A(1) carries a civil penalty of 60 penalty units.

New subsection 19-66A(2) requires a higher education provider to whom Part 5-1A applies to pay the HELP tuition protection levy and any penalty for late payment of the HELP protection levy. A note explains that the HELP tuition protection levy is imposed by the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (once enacted), and that amounts of levy for a year are either determined before, or indexed on, 1 August in the year. A provider that fails to pay the levy or late payment penalty when it is due and payable is breaching a quality and accountability requirement under HESA, for which action can be taken by the Minister against the provider under Subdivision 22-B of the Act.

New subsection 19-66A(3) states that the Higher Education Provider Guidelines may make provision for, or in relation to, a number of matters including:

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issuing notices setting out the amount of the HELP tuition protection levy payable by a provider;

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when the HELP tuition protection levy is due and payable;

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issuing notices extending the time for payment of HELP tuition protection levy and late payment penalties;

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the refund, remission or waiver of the HELP tuition protection levy and any late payment penalties; and

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the review of decisions made under the Higher Education Provider Guidelines in relation to the collection or recovery of HELP tuition protection levy.

These matters will be dealt with in the Higher Education Provider Guidelines rather than in the primary legislation, as these are primarily matters of administration and process regarding the collection and recovery of the levy amounts. They do not impact on the setting of the levy amounts payable by the providers. The nature of any reviewable decisions that may be provided for in the Guidelines will be decisions on relatively minor or administrative issues, such as whether a provider's late payment penalty should be waived or errors in the calculation of the levy. It is anticipated these decisions will be dealt with through internal review and will not be subject to external merits review given they should not impact significantly on the rights of any provider and it could be disproportionately costly and time consuming if a provider were able to pursue the issue in the Administrative Appeals Tribunal.

Item 6 - Paragraph 36-20(3)(a)

Item 7 - Subsection 36-20(4)

Item 8 - Section 36-24A (heading)

These items replace words and phrases in HESA with new terminology reflecting the principal amendments to the Act.

Item 9 - Subsection 36-24A(1)

Item 9 repeals and substitutes a new subsection 36-24A(1). The new subsection 36-24A(1) provides the circumstances in which a higher education provider must determine that the section applies to a person.

New subsection 36-24A(1) states that a higher education provider must, on the Secretary's behalf, determine that the section applies to a person if:

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the person has been enrolled as a Commonwealth supported student with the provider in a unit of study; and

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the unit would, if completed, form part of a course of study undertaken with the provider; and

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the person has not completed the requirements for the unit during the period during which the person undertook, or was to undertake, the unit because the provider defaulted in relation to the person; and

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Part 5-1A applied to the provider at the time of default; and

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either the HELP Tuition Protection Director decides, under paragraph 166-25(1)(b), that they are not satisfied that there is a suitable replacement course for the person, or the person elects, under subparagraph 166-25(3)(a)(iii), to have an amount equal to the amounts of HECS-HELP assistance that the person received for the unit re-credited to the student's HELP balance.

A note explains that the HECS-HELP debt of a person to whom this section applies is remitted under subsection 137-5(4) of HESA.

Item 10 - Section 104-42 (heading)

Item 13 - Paragraph 110-5(1A)(b)

Item 14 - Subsection 110-5(1B)

These items replace words and phrases in HESA with new terminology reflecting the principal amendments to the Act.

Item 11 - Paragraphs 104-42(1)(b), (c) and (d) (not including the note)

Item 11 repeals the paragraphs, and substitutes paragraphs which require a higher education provider, on the Secretary's behalf, to re-credit a student's FEE-HELP balance for a unit of study the person has been enrolled in with the provider if:

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the person has not completed the requirements for the unit during the period during which the person undertook, or was to undertake, the unit because the provider defaulted in relation to the person; and

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Part 5-1A applied to the provider at the time the provider defaulted in relation to the person; and

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either the HELP Tuition Protection Director decides, under paragraph 166-25(1)(b), that the Director is not satisfied that there is a suitable replacement course for the person, or the person elects, under subparagraph 166-25(3)(a)(iii), to have an amount equal to the amounts of FEE-HELP assistance that the person received for the unit re-credited to the student's HELP balance.

Item 12 - Subsection 104-42(2)

Item 12 repeals subsection 104-42(2) and substitutes a new subsection. This change provides that the Secretary may re-credit a person's HELP balance under subsection 104-42(1) where the Secretary is satisfied that the higher education provider has failed to do so within a reasonable period.

Item 13 - Paragraph 110-5(1A)(b)

Item 13 provides that "unit in circumstances that make it a replacement unit within the meaning of the *tuition assurance requirements" is to be substituted with "unit as a *replacement unit". This is because "replacement unit" is now a defined term.

Item 14 - Subsection 110-5(1B)

Item 14 provides that "the tuition assurance requirements" is to be substituted with "the *tuition assurance requirements". This is because "tuition assurance requirements" is a defined term.

Item 15 - Section 159-1

Item 15 inserts two new items in the table in section 159-1 of HESA, to specify that Chapter 5 of the Act also deals with the following matters:

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tuition protection (in Part 5-1A); and

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the HELP Tuition Protection Fund, the HELP Tuition Protection Director and the HELP Tuition Protection Fund Advisory Board (in Part 5-1B).

Item 16 - After Part 5-1

Item 16 inserts new Parts 5-1A and 5-1B into HESA. Part 5-1A sets out the arrangements relating to tuition protection.

Part 5-1A - Tuition protection

New Part 5-1A comprises two divisions. Division 1 provides which approved providers the new tuition protection arrangements apply to and defines when a provider defaults in relation to a student. Division 2 sets out the obligations of various persons when a provider defaults, including those of the provider, the HELP Tuition Protection Director and a replacement provider.

Division 1 - Preliminary

Section 166-1 - What this Part is about

New section 166-1 provides an outline for the purpose of Part 5-1A.

Section 166-5 - Application of this Part

New section 166-5 provides that Part 5-1A applies to all higher education providers other than Table A providers or providers of a kind prescribed by the Higher Education Provider Guidelines.

Table A providers have been excluded from the application of Part 5-1A because, as a class of providers, they are considered to be at very low risk of defaulting and in the event that they do default, should have the capacity and capability to place students in suitable replacement courses without the assistance of the HELP Tuition Protection Director. Other kinds of providers prescribed by the Guidelines may also be exempt from the application of Part 5-1A. This is to provide for flexibility should it become apparent that the risk of another class of providers defaulting is also low with adequate processes and procedures in place to provide tuition protection to their students. This approach allows the tuition protection arrangements to evolve responsively based on evidence and experience.

New subsection 166-5(2) provides that the Minister may determine that Part 5-1A applies, or does not apply, to specified higher education providers. New subsection 166-5(3) provides that a determination made under subsection 166-5(2) may be made either unconditionally or subject to conditions, and may be expressed to be in force indefinitely or for a specified period.

This is to provide for additional flexibility should it become apparent that the risk of a particular provider defaulting is low, and in circumstances where that provider has demonstrated that it has adequate processes and procedures in place to provide tuition protection to their students. For example, currently one Table B provider is exempt from the tuition assurance requirements.

New subsection 166-5(4) provides that a determination made under subsection 166-5(2) is not a legislative instrument.

The ability to exempt providers from the tuition protection requirement by class through the Guidelines, or individually by administrative decision by the Minister reflects the current arrangements under sections 16-31 and 19-40 of HESA.

New subsection 166-5(5) provides that, despite subsection 166-5(1), sections 166-27 and 166-30 apply to all higher education providers. A note explains that section 166-27 deals with provider obligations to provide information about replacement courses, and that 166-30 deals with obligations of providers of replacement courses.

Section 166-10 - When a higher education provider defaults in relation to a student

New section 166-10 sets out the circumstances in which a provider defaults in relation to a student. These circumstances include where the provider:

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fails to start to provide a unit of study to the student on the day on which the unit was scheduled to start; or

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ceases to provide a unit of study on a day after the unit starts but before it is completed; and

the student has not withdrawn before that day, and the student was entitled, or would have been entitled, to FEE-HELP assistance or HECS-HELP assistance for the unit of study.

It is a matter of fact based on the circumstances whether or not a provider defaults. Similarly, the cause of the default does not matter, whether it occurs because the provider of their own accord ceases to provide a course or whether it is the result of compliance action taken against the provider, such as the provider's approval being suspended or revoked.

New subsection 166-10(3) enables the Higher Education Provider Guidelines to prescribe circumstances which, if they occur, will mean that a provider is in default. This provision is not intended to extend the broad circumstances described in subsections 166-10(1) and (2) but rather allow for greater precision and clarity in respect of what situations will, in practice, give rise to a default. For example, the Guidelines may provide that if the provider enters into liquidation, the provider is taken to be in default, since this is a circumstance which inevitably means the provider can no longer be delivering the unit of study to a student.

Division 2 - Obligations when a provider defaults in relation to a student

Section 166-15 - Higher education providers must give notice of default to HELP Tuition Protection Director

This new section applies if a higher education provider defaults in relation to a student.

New subsection 166-15(2) requires a higher education provider to give written notice to the HELP Tuition Protection Director of the circumstances of a default within 24 hours of the default occurring. Being aware of the default as soon as possible will allow the HELP Tuition Protection Director to begin assisting students.

New subsection 166-15(3) requires a higher education provider within 3 business days of defaulting to give written notice to the HELP Tuition Protection Director specifying the following information for each student to whom the provider has defaulted:

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the student's full name and contact details;

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the units of study and the course of study that the student was enrolled in at the time of the default;

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the amount of the tuition fees for each unit of study in which the student was enrolled in at the time of the default;

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details about the payment of those tuition fees; and

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any other matter prescribed by the Guidelines.

The above information is necessary for the HELP Tuition Protection Director to liaise with students and possible replacement providers and identify whether there are any suitable replacement units of study for the students. Providers are already required to keep and maintain this information and so they should be able to collate the material for each student without undue burden and within the 3 business day timeframe.

New subsection 166-15(4) requires a higher education provider, if requested in writing by the HELP Tuition Protection Director, to give to the Director for a student in respect of whom the provider has defaulted a copy of a student's record of results for the units of study that the student has completed.

A notice given under new subsection 166-15(4) must comply with any requirements prescribed by the Higher Education Provider Guidelines. For example, the Guidelines may prescribe the manner by which the information is to be delivered.

Failure to comply with new section 166-15 gives rise to a civil penalty and it is also an offence of strict liability. In both instances, the penalty is 60 penalty units.

Strict liability for this offence is appropriate (having regard to the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers) because the offence:

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is subject to an infringement notice scheme (see proposed amendment to section 215-20 of HESA);

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is punishable by a fine of up to 60 penalty units and it is not punishable by imprisonment; and

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will enhance the effectiveness of the enforcement regime under HESA in deterring non-compliance.

Section 166-20 - Higher education providers must give notice of default to affected students

This new section applies if a higher education provider defaults in relation to a student.

The higher education provider is required to give written notice of the default to students in relation to whom the provider has defaulted within 24 hours. It is important students are notified as soon as possible of the default. The notice must comply with any requirements prescribed by the Higher Education Provider Guidelines. It is appropriate these matters are prescribed in the Guidelines since they are likely to be of an administrative nature.

Contravention of section 166-20 gives rise to a civil penalty and is also an offence of strict liability. In both instances the penalty is 60 penalty units. Strict liability for this offence is appropriate for the same reasons described in relation to new section 166-15 above.

Section 166-25 - Student placement service

This new section provides that, when a higher education provider defaults in relation to a student, the HELP Tuition Protection Director must decide whether there are any suitable replacement courses for the student.

The matters the HELP Tuition Protection Director must have regard to in deciding whether they are satisfied that there is a suitable replacement course are:

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whether the replacement course leads to the same or a comparable qualification as the original course;

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what course credits the student may receive for the units of study of the original course successfully completed by the student;

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whether the mode of delivery of the replacement course is the same as the mode of delivery of the original course;

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the location where the replacement course will be primarily delivered;

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whether a student will incur additional fees for the replacement course that are unreasonable;

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whether the student will be able to attend the replacement course without unreasonably impacting on the student's prior commitments; and

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any other matters prescribed by the Guidelines.

A course that is a suitable replacement course for one student affected by a provider's default may not be a suitable replacement course for another student affected by the same default.

In some circumstances, a course may still be a suitable replacement course even where not all of the above matters are met; for example, the HELP Tuition Protection Director may consider that a replacement course delivered online is suitable despite the original course being delivered face-to-face. An example of when a replacement course may unreasonably impact on a student's prior commitments is if the teaching hours for the replacement course interfere with the student's prior work commitments.

If the HELP Tuition Protection Director is satisfied that there is one or more suitable replacement courses, the HELP Tuition Protection Director must give a written notice to the student. Amongst other requirements, this notice must include:

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a description of each suitable replacement course including the qualification it leads to;

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the contact details of the provider of each suitable replacement course;

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an explanation that, if tuition fees have already been paid for the affected unit of the original course, tuition fees would not be payable for the replacement unit of a replacement course;

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an explanation that, if the student chooses to enrol in another course, there is no obligation on the provider of the other course to offer a replacement unit without charge to the student;

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an explanation of the matters the Director must have regard to in deciding there is a suitable replacement course;

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anything else required by the Higher Education Provider Guidelines.

The inclusion of the above information is to ensure that a student is given information about the replacement course options available, the contact details of the proposed replacement providers so that the student can undertake their own enquiries, and details to assist the student should they seek a review of the decision that a course is a suitable replacement course.

The student will then contact the provider of the preferred suitable replacement course and the formal offer and acceptance of enrolment will be dealt with between the student and the replacement provider.

If the HELP Tuition Protection Director is not satisfied that there is a suitable replacement course, the HELP Tuition Protection Director is required to give the student a notice that:

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explains the matters the Director must have regard to in determining whether there were any suitable replacement courses;

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explains the student's right to request a review of the decision within 28 days;

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an explanation that the student's HELP balance will be re-credited if they do not seek review of the Director's decision;

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a statement that, to facilitate early remittal or re-crediting, the student can notify the HELP Tuition Protection Director in writing at any time during the 28 days that they will not seek review of the decision.

If a student notifies the Director prior to the expiry of the 28 days that they will not seek review of the decision, this does not mean that the actual re-crediting will occur within the 28 days but rather that the process to facilitate the remittance or re-credit will occur sooner.

Section 166-27 - Obligations of providers to provide information about replacement courses

This new section provides that the HELP Tuition Protection Director may, by notice in writing, require a higher education provider to provide such information that the Director reasonably requires to enable the Director to make a decision regarding suitable replacement courses for a student in relation to whom a provider has defaulted.

The information must be provided in a form (if any) approved by the HELP Tuition Protection Director and in accordance with such other requirements as the Director makes.

Contravention of section 166-27 gives rise to a civil penalty and is also an offence of strict liability. In both instances the penalty is 60 penalty units. Strict liability for this offence is appropriate for the same reasons described in respect to new section 166-15.

Section 166-30 - Obligations of replacement providers

This new section sets out the obligations that apply to a higher education provider when a student accepts an offer of a replacement course with the provider.

The provider must give written notice to the HELP Tuition Protection Director within 14 days after the student has accepted the offer of a replacement course with the provider. This is important so the Director is made aware that the student has been successfully placed in a replacement course.

The higher education provider must also ensure that the student is:

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granted course credits for units of study of the original course successfully completed by the student;

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if the student has been charged a student contribution amount or a tuition fee for an affected unit - is not charged a student contribution amount or a tuition fee for a replacement unit of the replacement course; and

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enrolled in the replacement course as soon as practicable.

There requirements ensure that the student is afforded appropriate protections when enrolling in the replacement course.

Contravention of this provision is a civil penalty and it is also an offence of strict liability. In both instances, the penalty is 60 penalty units. Strict liability for this offence is appropriate for the same reasons described in respect to new section 166-15.

Section 166-32 - Obligations of replacement providers regarding enrolment information

This new section requires a replacement provider to keep up to date records of the following in relation to affected students:

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the student's full name and contact details;

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the name of the replacement course and the units of study the student is currently enrolled in;

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any student contribution amounts or tuition fees charged to the student for any units of the replacement course;

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details of the units of study successfully completed by the student;

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details of the course credits for the units of study of the original course successfully completed by the student granted to the student.

Contravention of section 166-32 is a civil penalty and it is also an offence of strict liability. In both instances, the penalty is 60 penalty units. Strict liability for this offence is appropriate for the same reasons described in respect to new section 166-15.

Section 166-35 - Notification obligations where there is no replacement course or student elects re-crediting

This new section places notification obligations on the HELP Tuition Protection Director if a higher education provider defaults in relation to a student and either the Director decides under new paragraph 166-25(1)(b) that there is no suitable replacement course for a student, or the student elects under new subparagraph 166-25(3)(a)(iii) to have their HELP balance re-credited or the student elects under sub-paragraph 166-25(3)(a)(iii) to have an amount equal to the amounts of FEE-HELP assistance or HECS-HELP assistance that the student received for the affected unit re-credited to the student's HELP balance.

In these circumstances, the HELP Tuition Protection Director must give a written notice to the Secretary of that fact and a written notice to the provider stating that an amount equal to the amounts of FEE-HELP assistance or HECS-HELP assistance that the student received for the affected unit will be re-credited to the student's HELP balance.

Part 5-1B - HELP Tuition Protection Fund, HELP Tuition Protection Director and HELP Tuition Protection Fund Advisory Board

New Part 5-1B comprises three divisions. Division 1 establishes the HELP Tuition Protection Fund, Division 2 establishes the office of the HELP Tuition Protection Director, and Division 3 establishes the HELP Tuition Protection Fund Advisory Board.

Division 1 - HELP Tuition Protection Fund

Section 167-1 - Name of Fund

New section 167-1 establishes the HELP Tuition Protection Fund and provides that it is a special account for the purposes of the Public Governance, Performance and Accountability Act 2013.

Section 167-5 - Credits to the HELP Tuition Protection Fund

New section 167-5 provides that there must be credited to the HELP Tuition Protection Fund amounts equal to the following:

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each amount of HELP tuition protection levy received from a higher education provider;

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each amount recovered by the Commonwealth under paragraph 36-24A(2)(b) or subsection 110-5(1) because of re-crediting under section 104-42, if the balance of the Fund had previously been reduced under paragraph 167-10(1)(f) in relation to that amount. Paragraph 36-24A(2)(b) of HESA requires a defaulting provider to pay the Commonwealth an amount equal to any HECS-HELP assistance to which an affected student was entitled. Subsection 110-5(1) of HESA requires a defaulting provider to pay the Commonwealth an amount equal to any FEE-HELP assistance to which an affected student was entitled. The amounts a provider is required to pay under paragraph 36-24A(2)(b) and subsection 110-5(1) are debts due to the Commonwealth. If the re-credit occurs under section 104-42, either the Secretary or the HELP Tuition Protection Director could take action to recover the debt but if recovered, the amount is required to be credited into the HELP Tuition Protection Fund, if the balance of the Fund had previously been reduced in respect of that amount under paragraph 167-10(1)(f), any other money appropriated by the Parliament for the purposes of the HELP Tuition Protection Fund - for example this includes the initial amount appropriated by Parliament for the HELP Tuition Protection Fund;

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any penalties for late payment of HELP tuition protection levy. Details will be provided in the Guidelines regarding when a provider incurs a late payment penalty, and the calculation, recovery or waiver of any such late payment penalty;

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each amount received by the Commonwealth for the purposes of the HELP Tuition Protection Fund, for example, this covers any insurance payments received as a result of a claim made by the HELP Tuition Protection Director under any insurance policy in place for the tuition protection arrangements.

There are two notes under section 167-5 to assist the reader. The first note explains that, if any of the purposes of a special account is a purpose covered by an item in an Appropriation Act (whether or not the item expressly refers to the account), then amounts may be debited against the appropriation for that item and credited to that special account. The second note reminds the reader that the HELP tuition protection levy is imposed under the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted).

Section 167-10 - Purposes of the HELP Tuition Protection Fund

This new section sets out the purposes of the HELP Tuition Protection Fund, which are as follows:

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making payments in connection with tuition protection;

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paying or discharging the costs, expenses and other obligations incurred by the Commonwealth in the performance of the HELP Tuition Protection Director's functions, including management of the HELP Tuition Protection Fund. For example, this might include costs incurred in paying a consultant engaged to assist the HELP Tuition Protection Director perform his or her functions - it is anticipated that the Director will engage a service provider to provide case management and student placement services for students affected by a provider default. Other examples may include: paying premiums for insurance coverage for the tuition protection arrangements where the HELP Tuition Protection Fund is below its target size; and paying for actuarial advice to inform the setting of levy components;

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paying any remuneration and allowances payable to the HELP Tuition Protection Director and members of the HELP Tuition Protection Fund Advisory Board. These amounts will be as determined by the Remuneration Tribunal;

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paying any amount that is required or permitted to be repaid. This is to allow the Commonwealth to meet any legal obligation it might have to pay amounts out of the Fund;

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reducing the balance of the Fund (and therefore the available appropriation for the Fund) without making a real or notional payment. This purpose enables amounts to be transferred from the Fund (which as a special account is part of consolidated revenue) elsewhere to the Commonwealth which is also part of consolidated revenue. For example, this would enable a "payment" from the Fund to part of consolidated revenue when an amount equal to the tuition fees for an affected part of an original course is re-credited to a student's FEE-HELP balance under section 104-42. It would also enable the HELP Tuition Protection Director to repay funding appropriated by Parliament to establish the Fund once the Fund is self-sustaining.

A note underneath new subsection 167-10(1) reminds the reader that section 80 of the Public Governance, Performance and Accountability Act 2013 deals with special accounts.

New subsection 167-10(2) enables the Higher Education Provider Guidelines to make provision in relation to the purpose under new paragraph 167-10(1)(a), that is making payments in connection with tuition protection. This includes making Guidelines about the circumstances in which payments may be made; amounts of different kinds of payments; and methods for calculating different kinds of payments.

A note underneath new subsection 167-10(2) provides an example of such a payment is that a provider may receive a transfer payment if a student accepts a place in a replacement course with the provider. Another example is that the Guidelines may give the HELP Tuition Protection Director the discretion to pay a third party (for example a liquidator) to provide information required for the purpose of facilitating placement of a student in a suitable replacement course or re-crediting the student's FEE-HELP balance for the affected unit of an original course.

The power to make Guidelines in respect of these payments will facilitate greater specificity and transparency around payments that may be made to providers and other persons in connection with tuition protection. It is desirable to deal with this in the Guidelines to avoid being overly prescriptive in the primary legislation, which might inadvertently limit the HELP Tuition Protection Director's practical administration of tuition protection.

New subsection 167-10(3) specifies that the purposes of the Fund do not include paying or discharging any costs, expenses or other obligations associated with services provided to the HELP Tuition Protection Director by an employee or officer of a Commonwealth entity (within the meaning of the Public Governance Performance and Accountability Act 2013).

Division 2 - HELP Tuition Protection Director

Section 167-15 - HELP Tuition Protection Director

New section 167-15 provides that there is to be a HELP Tuition Protection Director.

New subsection 167-15(2) provides that the office of HELP Tuition Protection Director is to be held by the person who holds the office of TPS Director under section 54A of the ESOS Act. A note provides the TPS Director also holds the office of VSL Tuition Protection Director under the VET Student Loans Act 2016.

New subsection 167-15(3) clarifies that the reference in new subsection 167-15(2) to the person who holds the office of the TPS Director includes a reference to a person acting in that office because of an appointment under section 54K of the ESOS Act. This is to ensure that, where a person holding the office of TPS Director is only doing so temporarily, this person will also temporarily hold the office of the HELP Tuition Protection Director.

Section 167-20 - Functions of the HELP Tuition Protection Director

New section 167-20 sets out the functions of the HELP Tuition Protection Director which include:

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facilitating and monitoring the placement of students in relation to whom a higher education provider has defaulted;

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paying amounts out of, or reducing the balance of, the HELP Tuition Protection Fund under section 167-10;

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reporting to the Minister on the operation of Part 5-1A (tuition protection) and the financial status of the HELP Tuition Protection Fund;

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managing the HELP Tuition Protection Fund in a way that ensures that it is able to meet all its liabilities from time to time;

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making the legislative instrument each year for the purposes of section 12 of the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted);

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recommending that the Secretary take action against an approved higher education provider that has defaulted in relation to a student;

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any other function conferred by this Bill or any other law of the Commonwealth; and

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any other function that is incidental or conducive to the performance of the above functions.

New subsection 167-20(2) provides that the HELP Tuition Protection Director has power to do all things necessary or convenient to be done for, or in connection with, the performance of the Director's functions.

Section 167-25 - Administrative provisions relating to the HELP Tuition Protection Director

New section 167-25 describes administrative provisions relating to the HELP Tuition Protection Director by reference to provisions from the ESOS Act that relate to the TPS Director. Subsection 167-25(1) sets out a table that refers to a number of provisions from the ESOS Act which are set out at subsection 167-25(2).

The effect of this provision is to replicate the provisions set out in subsection 167-25(2) so that they govern the functions of the HELP Tuition Protection Director in the context of HESA in the same way as they govern the functions of the TPS Director under the ESOS Act.

These provisions apply to the offices of the HELP Tuition Protection Director, VSL Tuition Protection Director and TPS Director in the same way, as they deal with administrative issues such as: remuneration and allowances (section 54C), leave of absence (section 54D), restriction on outside employment (section 54E), disclosure of interests (54F), other terms and conditions (section 54J), consultants (54L) and application of finance law (section 54N). This is appropriate because the HELP Tuition Protection Director is the same person as the VSL Tuition Protection Director and the TPS Director.

New subsection 167-25(3) provides that for the purposes of section 54E of the ESOS Act, the Minister is take to have given approval to the TPS Director to engage in paid employment as the HELP Tuition Protection Director and vice versa. This provision is included for the avoidance of doubt, as paragraph 54E prohibits the TPS Director from engaging in paid employment outside the duties of his or her office without the Minister's approval.

New subsection 167-25(4) provides that the Minister may terminate the appointment of the TPS Director if:

•

the TPS Director engages, except with the Minister's approval, in paid employment outside the duties of his or her office as HELP Tuition Protection Director; or

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the HELP Tuition Protection Director fails, without reasonable excuse, to comply with section 54F of the ESOS Act in relation to disclosure of interests.

New subsection 167-25(5) provides that the HELP Tuition Protection Director is not personally subject to any liability to any person (other than the Commonwealth) in respect of anything done, or omitted to be done, in good faith in the exercise or performance of powers or functions under HESA or the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted).

Division 3 - HELP Tuition Protection Fund Advisory Board

Section 167-30 - Establishment and membership

New section 167-30 establishes the HELP Tuition Protection Fund Advisory Board. The members of this Board are to be the same as the members of the TPS Advisory Board appointed under the ESOS Act, including acting members.

The Chair (including any person acting in this role) and Deputy Chair of the Tuition Protection Fund Advisory Board are the Chair and Deputy Chair of the TPS Advisory Board.

New subsection 167-30(7) provides that, despite subsection 55(2) of the ESOS Act, a person is eligible to be appointed to the TPS Advisory Board if the Minister is satisfied that the person has qualifications or experience that the Minister considers relevant to the performance of the HELP Tuition Protection Fund Advisory Board's functions.

Subsection 55(2) of the ESOS Act provides that a person is not eligible for appointment as a Board member under paragraph 55(1)(b) unless the Minister is satisfied that he or she has qualifications or experience that the Minister considers relevant to the performance of the Board's functions. The purpose of subsection 167-30(7) is to recognise that given HELP Tuition Protection Fund Advisory Board members will also be members of the VSL Tuition Protection Fund Advisory Board and the TPS Advisory Board, in some cases the member may have been appointed for his or her specific qualifications or experience that is most relevant to one, or two, but not all three Advisory Boards.

Section 167-35 - Function of the HELP Tuition Protection Fund Advisory Board

New section 167-35 provides that the function of the HELP Tuition Protection Fund Advisory Board is to provide advice and make recommendations in relation to the making of a legislative instrument each year under section 12 of the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted). The advice and recommendations can be on its own initiative or following a request from the HELP Tuition Protection Director. The limited function of the HELP Tuition Protection Fund Advisory Board is the same as that which applies to the TPS Advisory Board.

Section 167-40 - Administrative provisions relating to the HELP Tuition Protection Fund Advisory Board

New section 167-40 describes administrative provisions relating to the HELP Tuition Protection Fund Advisory Board by reference to provisions from the ESOS Act that relate to the TPS Advisory Board. Subsection 167-40(1) sets out a table that refers to a number of provisions from the ESOS Act which are set out at subsection 167-40(2).

The effect of the section is to replicate the provisions set out in subsection 167-40(2) so that they govern the functions of the HELP Tuition Protection Fund Advisory Board in the context of HESA in the same way as they govern the functions of the TPS Advisory Board under the ESOS Act.

These provisions apply across the three Advisory Boards in the same way as they deal with the following administrative issues: remuneration and allowances (section 55E), disclosure of interests (section 55H), disclosure of interests to the Board (section 55J) and meetings of the Board (sections 56A - 56G).

New subsection 167-40(3) provides that the a member of the HELP Tuition Protection Advisory Board is not personally subject to any liability to any person (other than the Commonwealth) in respect of anything done, or omitted to be done, in good faith in the exercise or performance or powers of functions under HESA and the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted).

Item 17 - Subsections 169-15(1A) and (2A)

Item 170 omits "in circumstances that make it a replacement unit within the meaning of the *tuition assurance requirements" and substitutes "that is a *replacement unit".

Item 18 - Subsection 169-15(4)

Item 18 repeals subsection 169-15(4) and substitutes a new subsection 169-15(4) which specifies that subsection 169-15(3) does not apply in circumstances where a student is no longer enrolled in a unit at the end of a census date because the provider defaulted in relation to the student and the student accepts an offer of a place in a replacement course.

Item 19 - Section 206-1 (at the end of the table)

Item 19 adds 3 table items to the table of reviewable decisions in HESA in section 206-1. These table items outline that the following are reviewable decisions under HESA:

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a determination by the Minister that Part 5-1A applies, or does not apply, to a specified higher education provider (subsection 166-5(2));

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a decision by the HELP Tuition Protection Director that the Director is satisfied that there are one or more suitable replacement courses for a student (paragraph 166-25(1)(a)); and

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a decision by the HELP Tuition Protection Director that the Director is not satisfied that there is a suitable replacement course for a student (paragraph 166-25(1)(b).

Item 20 - After section 209-10(4)

Item 20 inserts a new section after subsection 209-10(4) that provides that the reviewer of a reviewable decision is not required to reconsider the decision if the decision was made under paragraph 166-25(1)(b), and a person whose interests were affected by that decision gives a notice in writing under paragraph 166-25(4)(c) that the person would not seek reconsideration of the decision.

Item 21 - Section 212-1

Item 22 - At the end of section 212-1

Items 21 and 22 insert a new subsection 212-1(2) which indicates that, despite subsection 212-1(1), an application to the Administrative Appeals Tribunal cannot be made for the review of a decision made under paragraph 166-25(1)(a) or (b) (about suitable replacement courses).

The reasons for the absence of external merits review are:

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clear parameters are set out at new subsection 166-25(2) about what the HELP Tuition Protection Director must have regard to in determining whether a course is a suitable replacement course. This is intended to ensure that the first instance decision is reasonable and justifiable, in respect of which students may seek internal review;

•

in practice, the Director will actively work with providers and students to identify suitable replacement courses for a student. It is intended that, to the extent possible, a student would be provided with the option of several suitable replacement courses to choose between;

•

when a provider defaults, it would be in the best interests for students to receive a resolution of the issue of whether or not there is a suitable replacement course as soon as practicable to allow them to continue their studies. Engaging in the potentially lengthy external merits review process may mean that students are unable to continue their studies until the matter is resolved;

•

in respect of a decision that there is no suitable replacement course for a student - the student will receive a re-credit of his or her HELP balance for the affected part of their course which means they should not be financially disadvantaged should there not be a suitable replacement course. Further, legislation does not compel a replacement provider to enrol a student in a replacement course which means practically, if an external merits review may consider there are potentially suitable replacement courses, it cannot assist the students if no providers are prepared to deliver that course to the student.

Item 23 - At the end of section 215-15

Section 215-15 of HESA provides that each civil penalty provision of the Act is enforceable under Part 4 of the Regulatory Powers Act. Part 4 of that Act allows a civil penalty provision to be enforced by obtaining an order for a person to pay a pecuniary penalty for the contravention of the provision.

Item 23 adds a new subsection 215-15(3) to provide that the HELP Tuition Protection Director is an authorised applicant for the purposes of Part 4 of the Regulatory Powers Act as it applies in relation to Part 5-1A - that is, he or she can apply to a relevant court for a civil penalty order against a person for a contravention of a civil penalty provision in Part 5-1A.

Item 24 - At the end of section 215-20

Section 215-20 of HESA provides that an offence or civil penalty provision of the Act is subject to an infringement notice under Part 5 of the Regulatory Powers Act. Part 5 of that Act creates a framework for using infringement notices in relation to provisions. A person given an infringement notice has the choice of paying the amount specified as an alternative to having court proceedings brought against them for the contravention.

Item 24 adds a new subsection 215-20(3) to provide that, for the purposes of Part 5 of the Regulatory Powers Act, as it applies in relation to Part 5-1A, the HELP Tuition Protection Director is both an infringement officer and the relevant chief executive - that is he or she, can issue, extend the time to pay, and withdraw infringement notices for contraventions of offence and civil penalty provisions in Part 5-1A.

Item 25 - After subsection 215-40(1)

Item 25 inserts a new subsection 215-40(1A) to provide that the HELP Tuition Protection Director may, in writing, delegate his or her powers and functions under the Regulatory Powers Act as it applies in relation to Part 5-1A, to an SES employee, or an acting SES employee, in the Department. The power to delegate ensures that the HELP Director's regulatory powers under the Act are able to be carried out efficiently and effectively should the Director not have the capacity to undertake all the regulatory functions or powers in a timely fashion. Subsection 215-40(3) provides appropriate constraints on the delegate's exercise of the regulatory powers by ensuring the delegate must comply with any directions of the delegator. New subsection 215-40(1A) is consistent with the Secretary's capacity to delegate his or her powers under the Regulatory Powers Act under subsection 215-40(1).

Item 26 - After paragraph 238-5(1)(a)

Item 26 inserts a new paragraph 238-5(1)(aa), which allows the Minister to delegate to the HELP Tuition Protection Director all or any of the Minister's powers under HESA (other than under section 41-45 or section 46-40).

Item 27 - After section 238-5

Item 27 inserts a new section 238-6, which deals with delegations by the HELP Tuition Protection Director. New subsection 238-6(1) provides that the HELP Tuition Protection Director may, in writing, delegate all or any of their functions or powers under HESA (other than paragraph 167-20(1)(e)) to an APS employee who holds or performs the duties of an APS 6 position, or an equivalent or higher position, in the Department.

A note under new subsection 238-6(1) explains that paragraph 167-20(1)(e) gives the HELP Tuition Protection Director the function of making a legislative instrument under section 12 of the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted).

New subsection 238-6(2) provides that, in exercising the powers or performing the functions under a delegation made under subsection 238-6(1), the delegate must comply with any directions of the HELP Tuition Protection Director.

It is anticipated that the HELP Tuition Protection Director's powers and functions would only be delegated to departmental officers who have been allocated as resources dedicated to assisting the HELP Tuition Protection Director. It is anticipated delegated powers would primarily be exercised by departmental officers at EL1 and EL2 levels. The power to delegate to an employee at the APS 6 level has been included as:

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the current disposition of staff that will be assigned to assist the HELP Tuition Protection Director in the exercise of his or her functions has not yet been determined; and

•

the HELP Tuition Protection Director's work load may unexpectedly increase significantly, in the event of multiple provider defaults. Departmental officers at the APS 6 level may also need to exercise delegated powers to ensure that affected students are able to receive assistance as soon as practicable.

Item 28 - Section 238-7

Item 28 repeals and substitutes a new section 238-7. New section 238-7 provides that, before 1 July 2021, the Minister must commence a review into the operation ofParts 5-1A and 5-1B.

For example, such a review may examine the operations of the tuition protection arrangements, the role and functions of the HELP Tuition Protection Director and Advisory Board, the management of the HELP Tuition Protection Fund, and the use of the special accounts.

The review must be carried out in conjunction with the reviews of the tuition protection arrangements under the ESOS Act and the VSL Act. The Minister is required to cause a report of the review to be prepared and to be tabled in each House of the Parliament within 15 sitting days after the completion of the report.

Item 29 - Subsection 238-10(1) (table item 6, column headed "Chapter/Part/section")

Item 29 inserts in column 3 of table item 6, prior to section 169-17, Parts 5-1A and 5-1B as provisions of HESA that contain matters that may be prescribed in the Higher Education Provider Guidelines.

Item 30 - After subsection 238-10(1A)

Item 30 inserts a new subsection 238-10(2), which provides that the Minister may, by legislative instrument, make the Higher Education Provider Guidelines providing for matters required or permitted by the Higher Education Support (HELP Tuition Protection Levy) Act 2019 (when enacted) to be provided by the Guidelines.

Item 31 - Subclause 1(1) of Schedule 1

Item 31 inserts the following definitions into Schedule 1 of HESA:

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affected unit , of an original course, means the unit of study that a student was undertaking as part of a course of study when a higher education provider defaulted in relation to the student.

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default is defined by reference to new section 166-10, which sets out the circumstances in which a provider defaults in relation to a student.

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HELP Tuition Protection Director is defined by reference to new section 167-15. The office of the HELP Tuition Protection Director will be held by the same person who holds the office of the TPS Director. The functions of the HELP Tuition Protection Director include administering tuition protection and managing the HELP Tuition Protection Fund.

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HELP Tuition Protection Fund is defined by reference to new section 167-1, and means the fund established under that section.

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HELP Tuition Protection Fund Advisory Board is defined by reference to new section 167-30, and means the board established under that section. The members of the HELP Tuition Advisory Board are the members of the TPS Advisory Board.

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HELP tuition protection levy means the levy imposed under the Higher Education Support (HELP Tuition Protection Levy) Act 2019.

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original course means a course of study in relation to which a higher education provider has defaulted.

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replacement course means a course of study that enables a student to finish either an original course, or a course that is equivalent to an original course.

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replacement unit means a unit of study of a replacement course that replaces an affected unit of an original course.

Item 32 - Subclause 1(1) of Schedule 1 (definition of tuition assurance requirements )

Item 32 of Schedule 1 repeals the definition of tuition assurance requirements because as a result of this Bill it is no longer required.

Item 33 - Subclause 1(1) of Schedule 1

Item 33 of Schedule 1 inserts a new definition of tuition protection requirements, by reference to new section 16-30.

Division 2 - Application and transitional provisions

Item 34 - Application and transitional provisions

Certain provisions, which are to be repealed under the Bill, need to continue to apply after the commencement of this Part. This is necessary since the tuition protection arrangements for which the Bill provides only apply from 1 January 2020, and the Commonwealth is still working with higher education providers and former tuition assurance scheme operators to assist students of providers that ceased to provide courses before 1 January 2020. In addition it is important to clarify that the new and amended obligations imposed on approved course providers under this Part, apply to all providers, even if providers were approved prior to the commencement of this Part.

Subitem 34(1) provides that subsection 5-1(2) of HESA applies in relation to a Table C provider after commencement of this Part, regardless of when the provider was approved. This ensures that the application of HESA to Table C providers will continue, regardless of when the Table C provider was approved.

Subitem 34(2) provides that the amendment of section 16-25 of HESA made by this Part applies in relation to applications for approval made after the commencement of this Part, or before the commencement of this part if the application had not been decided before that commencement.

Subitem 34(3) provides that if, prior to the commencement of this Part, a provider ceased to provide a unit of study, then HESA and any instruments in force under HESA prior to commencement continue to apply after that commencement. This is necessary to ensure that former providers and former tuition assurance scheme operators are required to continue to comply with tuition assurance obligations to assist students affected by a provider default that occurred prior to the commencement of this Part.

Subitem 34(4) provides that section 19-66A and Part 5-1A of HESA, as inserted by this Part, apply in relation to a higher education provider after the commencement of this Part, regardless of when the provider was approved. This is to ensure that all approved course providers are required to comply with the new obligations imposed on providers.

Subitem 34(5) provides that the amendments of section 169-15 of HESA made by this Part apply in relation to enrolments in a unit of study that occur after the commencement of this Part.

Part 2 - Amendments commencing immediately after the commencement of HELP loan limits changes

Higher Education Support Act 2003

Item 35 - Section 97-42 (heading)

Item 36 - Paragraphs 97-42(1)(b), (c) and (d)

Items 35 and 36 amend provisions in HESA affected by Part 1 of Schedule 2 to the Bill, as a consequence of amendments made by Schedule 3 to the Higher Education Support Legislation Amendment (Student Loan Sustainability) Act 2018 , which commences on 1 January 2020. That Act amends the nomenclature of "FEE-HELP balance" to "HELP balance" throughout HESA, as a consequence of applying the FEE-HELP loan limit to HECS-HELP assistance.