House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Education, the Honourable Dan Tehan MP)

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Education Legislation Amendment (Up-front Payments Tuition Protection) Bill 2020

The Education Legislation Amendment (Up-front Payments Tuition Protection) Bill 2020 is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Bill

The principal purpose of the Education Legislation Amendment (Up-front Payments Tuition Protection) Bill 2020 ( Bill ) is to amend the Tertiary Education Quality and Standards Agency Act 2011 ( TEQSA Act ) and the Higher Education Support Act 2003 ( HESA ) to implement the expansion of the Australian Government's Tuition Protection Service ( TPS ) to include domestic up-front fee paying higher education students. The Bill ensures domestic up-front fee paying students and students who access FEE-HELP or HECS-HELP assistance ( HELP students ) at private higher education providers receive the same tuition protection. The Bill will be introduced with the Higher Education (Up-front Payments Tuition Protection Levy) Bill 2020 ( Levy Bill ).

Tuition protection aims to ensure students are protected and supported in the event that their provider defaults - that is, where the student has not withdrawn from a unit of study and either:

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

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the provider ceases to provide a unit to the student on a day after the unit starts but before it is completed.

From 1 January 2020, TPS arrangements were expanded to students accessing VET Student Loans, FEE-HELP and HECS-HELP assistance at private education providers through the Education Legislation Amendment (Tuition Protection and Other Measures) Act 2019. The proposed tuition protection arrangements in this Bill are modelled on the TPS arrangements for HELP students at a private higher education provider under HESA, and international students under the Education Services for Overseas Students Act 2000 ( ESOS Act ). For many years now, Australia has been a world leader in supporting international students studying in Australia in instances of provider closures.

The expansion of the successful TPS model to domestic students enrolled at private higher education providers who pay their tuition fees up-front is part of the Government's ongoing commitment to safeguarding students who are affected by a provider default, and providing the same protection as HELP students.

The Bill provides new tuition protection arrangements for domestic up-front fee paying students, which will:

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rename the 'HELP Tuition Protection Director' to be the 'Higher Education Tuition Protection Director' ( TP Director ) to have a single TP Director administering tuition protection for domestic up-front fee paying students and HELP students across the higher education sector. The TP Director is the same person as the independent TPS Director appointed under the ESOS Act;

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rename the 'HELP Tuition Protection Fund Advisory Board' to be the 'Higher Education Tuition Protection Fund Advisory Board' ( Advisory Board ), to have the same Advisory Board providing support, advice and recommendations to the TP Director on tuition protection arrangements for domestic up-front fee paying students and HELP students. The Advisory Board has the same members as those appointed to the TPS Advisory Board under the ESOS Act, who are a combination of sector and government representatives to ensure there is a diverse range of views factored into decision making;

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require private higher education providers to contribute annual levies, commensurate with their size and risk, under the Levy Bill. The levy system ensures the new arrangements are sustainable and can respond to trends in the higher education sector;

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rename the existing 'HELP Tuition Protection Fund' established under subsection 167-1(1) of HESA, to be the 'Higher Education Tuition Protection Fund'. This special account will be used to make payments in relation to the arrangements to support affected domestic students in the higher education sector, regardless of whether they pay their tuition fees up-front or defer them through a HELP loan and for the remuneration and allowances of the TP Director and Advisory Board;

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impose a new condition of registration on registered higher education providers under the TEQSA Act to comply with the new tuition protection requirements, including the requirement to keep records and provide information to the Secretary to support the administration of tuition protection;

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allow the Minister to make the Up-front Payments Guidelines ( Guidelines ) to prescribe matters relevant to the administration of tuition protection;

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provide assistance to domestic students who may complete their studies with another provider or may have their tuition fees that were paid up-front refunded for units of study that fail to commence or commenced but were not completed due to the provider's default:

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students will be able to choose between continuing their studies in a suitable replacement unit or course with a replacement provider (if available), or a refund of the amount of tuition fees paid up-front by the student for the affected unit. This reflects the small and diverse nature of the sector, where it can be difficult for a student to find a suitable replacement unit or course;

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require providers to discharge their tuition protection obligations upon default in relation to their affected students, and if not discharged then the TP Director must assist the affected students. This requirement is also being included under the existing TPS arrangements for HELP students through amendments to HESA to ensure the tuition protection process is consistent for all affected higher education students, regardless of if they pay their tuition fees up-front or defer them through a HELP loan;

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impose obligations on defaulting providers to notify the TP Director and students of the default in a timely manner, and cooperate with the TP Director;

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impose obligations on replacement providers to enrol students as soon as practicable, give the student course credits in recognition of their prior completed studies as appropriate, and not charge students for the replacement unit of the replacement course. These requirements facilitate efficient and fair treatment of students to allow them to continue their studies with minimal disruption;

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authorise the collection, use and disclosure of personal information between relevant parties (e.g. Department of Education, Skills and Employment ( Department ), TP Director and Tertiary Education Quality and Standards Agency) for the purposes of performing functions or exercising powers under the TEQSA Act and HESA as it relates to tuition protection;

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apply the Regulatory Powers (Standard Provisions) Act 2014 ( Regulatory Powers Act ) to new Part 5A (about tuition protection) of the TEQSA Act.

The Bill provides for the new tuition protection arrangements to commence on 1 January 2021. Consistent with previous tuition assurance arrangements, the proposed arrangements do not apply to Table A providers (i.e. public universities), TAFEs or Government funded providers and students enrolled with them are not included in the scope of TPS, since those providers are assessed to have a low risk of default. This does not prevent Table A providers, TAFEs or Government funded providers from enrolling displaced students as replacement providers. However, the Minister will have the power to determine that the new tuition protection requirements apply or do not apply to specific registered higher education providers having regard to matters set out in proposed section 62B of the TEQSA Act (explained further below in the detailed explanation).

Expanding the Australian Government's TPS to domestic up-front fee paying students will also ensure that private higher education providers are no longer required to maintain burdensome and costly arrangements to cover these students. Instead, they will pay levies to the Australian Government's managed TPS fund.

Analysis of human rights implications

The Bill engages the following human rights:

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the right to education - Article 13 of the International Covenant on Economic, Social and Cultural Rights ( ICESCR )

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the right to privacy - Article 17 of the International Covenant on Civil and Political Rights ( ICCPR )

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the right to equality and non-discrimination - Article 26 of the ICCPR

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the right to a fair and public hearing - Article 14 of the ICCPR

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the right to be presumed innocent - Article 14 of the ICCPR

Right to Education

The Bill engages the right to education, which is set out in Article 13 of the ICESCR. Article 13 recognises the important personal, societal, economic and intellectual benefits of education.

Article 13 provides that secondary education in its different forms, including higher education, shall be made generally available and accessible to all by every appropriate means.

The intent of the Bill is to implement a new tuition protection arrangement for domestic students who pay their tuition fees up-front for units of study at a private higher education provider. The Bill aims to ensure that these students are protected and supported in the event that their private higher education provider defaults - that is where the student has not withdrawn from a unit of study and:

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

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the provider ceases to provide a unit to the student on a day after the unit starts but before it is completed.

The Bill promotes the right to education as it is designed to ensure that in the event that a student's provider defaults, the student will be assisted to continue their studies in a suitable replacement unit or course or receive a refund of their tuition fees paid up-front in respect of the affected units of the course. Where students receive a refund, they will be able to independently seek alternative units or a course of study in order to continue their education and obtain a qualification.

The Bill also imposes obligations on providers in the event that they default - such as a requirement to notify students and the TP Director of the default, and a requirement to discharge their obligations to students within the period of 14 days after the day the provider defaulted in relation to the student. It also imposes obligations on providers in their capacity as replacement providers - such as to enrol the students in the replacement courses as soon as practicable, to give them course credits as appropriate and to not charge them tuition fees for the replacement units of a course. These obligations ensure defaulting providers support their affected students to carry on their higher education learning without disruption.

This Bill is compatible with and promotes the right to education.

Right to Privacy

The Bill engages the right to privacy, which is set out in Article 17 of the ICCPR. Article 17 provides that no one shall be subjected to arbitrary or unlawful interference with their privacy, family, home or correspondence, nor to unlawful attacks on their honour and reputation and that everyone has the right to the protection of the law against such interference or attacks.

The right to privacy can be permissibly limited in order to achieve a legitimate objective and where the limitations are lawful and not arbitrary. Authorised disclosure of personal information also invokes the exception in Australian Privacy Principle ( APP ) 6.2(b) in Schedule 1 to the Privacy Act 1988 ( Privacy Act ), which permits the disclosure of an individual's personal information for a secondary purpose where the disclosure is authorised by law.

In this case, the legitimate objective is the protection and support of domestic up-front fee paying students in the event that their private higher education provider defaults, through the Australian Government's TPS arrangements, which the Bill expands to encompass these students.

Registered higher education providers under the TEQSA Act will have obligations to keep records and provide personal information to the Department about their students (including in relation to contact details, information about enrolled units and tuition fees) in accordance with requirements set out in the Guidelines. This information will be collected by the Secretary and provided to the TP Director for the purposes of assisting students when a provider defaults. The Secretary's collection, use and disclosure of personal information from providers about domestic up-front fee paying students under this requirement is reasonable, proportionate and necessary to support the effective administrative of tuition protection to quickly and effectively assist students when a provider defaults. The Secretary and TP Director are also required to comply with the relevant APPs regarding the collection, use and disclosure of this personal information.

The meaning of 'personal information' under HESA will be expanded to include personal information obtained or created by an officer (as defined in HESA) for the purposes of Part 5-1A of HESA (about tuition protection) and proposed section 26A and Part 5A of the TEQSA Act (about tuition protection). Commonwealth officers within the meaning of HESA (including Departmental officers and the TP Director) and officers of registered higher education providers will be authorised to disclose personal information so long as the disclosure is for the performance of duties or functions, or the exercise of powers under or for the purposes of the TEQSA Act, HESA, Higher Education Support (HELP Tuition Protection Levy) Act 2020 ( HELP Tuition Protection Levy Act ) or the proposed Levy Bill.

HESA will also be amended to authorise the disclosure of information from Commonwealth officers (i.e. Departmental officers) to persons providing actuarial services (e.g. Australian Government Actuary) in connection with assisting that officer to perform duties or functions or exercise powers under the TEQSA Act, HESA, HELP Tuition Protection Levy Act or the proposed Levy Bill.

The TP Director will also have a new power under HESA and the TEQSA Act to require, by written notice, that higher education providers provide information relevant to tuition protection to the TP Director. It is important that the TP Director can obtain necessary information from providers in order to quickly and effectively assist displaced students when a provider defaults.

TPS is a successful proven tuition protection model that safeguards students from disruption in their studies, or disadvantage, as a result of their provider defaulting and being unable to deliver their unit of study or course of study. Higher education students paying their tuition fees up-front will benefit from the TPS expansion arrangements, as they will have the option in the event of a provider default to take up a replacement course, or receive a refund for payment made on incomplete units of study that the defaulting provider has failed to deliver. For private higher education providers that are also approved to offer HELP loans, it will reduce the burden of having to maintain separate protection arrangements for these up-front paying students, as they will be covered by the same tuition protection scheme.

Access to quality higher education student data on an ongoing basis is reasonable, necessary and proportionate to achieve the policy objective, which is to protect higher education students when their provider defaults through the TPS, in order for the students to continue their higher education studies.

The TP Director, and the members of the Advisory Board are also considered an 'agency' for the purposes of the Privacy Act and must comply with the APPs in the Privacy Act, including in relation to the collection, use or disclosure of personal information. Thus, the use of personal information under the Bill, collected for the purposes of the expanded TPS arrangements will apply to these entities. This is necessary to ensure that the TP Director and Advisory Board have the relevant information in order to carry out their powers and functions in relation to the TPS arrangements. In the case of the TP Director, this includes assisting students whose provider has defaulted and in the case of the Advisory Board members, this includes providing advice to the TP Director regarding the up-front payments tuition protection levy.

These entities are subject to the limitations and offences in respect of the use of information set out in the Privacy Act and Division 179 of HESA (protection of personal information). This protects the personal information of students and other parties.

The Department has also undertaken a Privacy Impact Assessment ( PIA ) to inform the drafting of the Bill and recommendations were implemented through the amendments. The PIA process will also assist to identify potential privacy impacts that the expansion might have on individuals in order to implement strategies to manage, minimise or eliminate those impacts.

The Bill is compatible with and promotes the right to privacy by ensuring that appropriate safeguards and limitations apply to persons who use and disclose personal information collected under this Bill.

Right to Equality and Non-discrimination

This Bill engages Article 26 of the ICCPR which states that 'the law shall prohibit any discrimination and guarantee to all persons equal protection against discrimination on any ground such as race, colour, sex, language, religion, political or other opinion, national or social origin, property, birth or other status'.

The Bill promotes the right to equality and non-discrimination through expanding the existing Government-backed tuition protection service to cover domestic up-front fee paying students enrolled at private higher education providers, which will enable these students to receive the same high quality tuition protection as students that access a HELP loan. Thereby ensuring all higher education students enrolled at private higher education providers are equally protected in the event of a provider default.

The Bill is compatible with the right to equality and non-discrimination.

Right to a Fair and Public Hearing

Article 14 of the ICCPR ensures that everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law.

The Bill engages the right to a fair and public hearing, including through ensuring that infringement notices can be issued in respect of certain contraventions of civil penalty provisions set out in proposed new Part 5A of the TEQSA Act.

Recipients of an infringement notice can, by paying a financial penalty, be effectively forgiven of the contravention. If a recipient chooses not to pay the financial penalty, the person can access a fair public hearing, should civil penalty proceedings be commenced in respect of the alleged contravention.

The provisions of the Regulatory Powers Act which are triggered by the Bill also specify requirements for what must be included in an infringement notice, ensuring that a person issued with an infringement notice is aware of the person's right to have the matter heard by a court.

The Bill also invokes the provisions of Part 4 of the Regulatory Powers Act for the enforcement of civil penalty provisions. The civil penalties allow a higher education provider to be penalised for contraventions without the need to impose a criminal penalty. The size of the civil penalties capable of being imposed is sufficient to act as a deterrent.

The Bill also provides for strict liability offences, including in relation to:

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provider discharging its obligations to students within the period of 14 days after the day the provider defaulted in relation to the student;

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provider giving notice to the TP Director (as relevant) and students in relation to a default;

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replacement provider when providing a replacement course to students: granting students course credits as appropriate, not charging them tuition fees for the replacement units of their course, enrolling them in the course as soon as practicable, and keeping up to date enrolment information records;

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complying with requests for information from the TP Director (as relevant);

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arrangements for payments between providers for courses or units that are provided jointly with one or more other registered higher education providers (as relevant).

Compliance by providers with these provisions is necessary to ensure the integrity of the tuition protection arrangements. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers. If a provider is prosecuted through criminal proceedings in relation to these offences, they will still be able to mount a fair and public defence in relation to the factual elements of the relevant offence.

The Bill is compatible with the right to a fair and public hearing.

Right to be Presumed Innocent

Article 14 of the ICCPR requires that, in the determination of any criminal charge, everyone shall be entitled to a set of minimum guarantees and that anyone convicted will have the right to review and compensation if the conviction is not upheld. Article 14 of the ICCPR also requires that anyone charged with a criminal offence shall have the right to be presumed innocent until proved guilty according to the law.

As mentioned above, the Bill creates a number of new strict liability offences that apply to factual scenarios, including in relation to:

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provider discharging its obligations to students within the period of 14 days after the day the provider defaulted in relation to the student;

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giving notice to the TP Director (as relevant) and students in relation to a default;

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replacement provider when providing a replacement course to students: granting students course credits as appropriate, not charging them tuition fees for the replacement units of their course, enrolling them in the course as soon as practicable, and keeping up to date enrolment records;

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complying with requests for information from the TP Director (as relevant);

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arrangements for payments between providers for courses or units that are provided jointly with one or more other registered higher education providers (as relevant).

Although these are strict liability offences, in respect of which mental elements do not need to be proven by a prosecution, as above, a provider can still mount a defence based on the factual elements of the offence. The standard of proof in relation to those factual elements will remain as the normal criminal standard, with the result that a prosecution will bear the onus of proving the relevant factual elements. These offences are proportionate to the value of maintaining adequate safeguards in relation to the students' and providers' participation in the legislative tuition protection arrangements. It is considered reasonable in these cases to impose strict liability offences to ensure the integrity of the tuition protection arrangements and to facilitate students being able to continue their education with minimal disruption in the event of their provider defaulting. Each of these offences can also be enforced through less serious measures, including by issuing infringement notices, or simply issuing warnings without prosecution, where appropriate. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.

Establishing a strong civil enforcement regime better facilitates students obtaining value and quality outcomes from their investment in education and allows them to continue their higher education with minimal disruption in the event of a provider default.

The Bill is compatible with the right to be presumed innocent.

Conclusion

The Bill is compatible with human rights because, to the extent that it may limit human rights, the limitations are reasonable, necessary and proportionate.