House of Representatives

Explanatory Memorandum

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

Schedule 2 - Amendment of the Higher Education Support Act 2003

Summary

Part 1 of Schedule 2 amends HESA to reflect the following definitional changes made by the Bill:

Updating the above terms in HESA, will allow the single TP Director, Fund and Advisory Board to administer and govern tuition protection under HESA and the TEQSA Act as it applies to domestic up-front fee paying students and students entitled to HELP in the higher education sector. This will enable tuition protection arrangements to operate more effectively and efficiently, and ensure that consideration can be given to both schemes by the TP Director and Advisory Board, as many private higher education providers have both domestic up-front paying and HELP students.

Part 2 of Schedule 2 amends HESA to authorise:

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the collection, use and disclosure of personal information between relevant parties (e.g. Department, TP Director and TEQSA) 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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the disclosure of information from Commonwealth officers (i.e. Departmental officers) to the Australian Government Actuary (AGA) for the purposes of obtaining services from AGA to assist Departmental officers to perform duties or functions or exercise powers under the TEQSA Act, HESA, HELP Tuition Protection Levy Act or proposed Levy Bill.

Consequently, these amendments to HESA in Part 2 of Schedule 2 will allow the TP Director to effectively administer the tuition protection arrangements to quickly and efficiently assist up-front fee paying students when a provider defaults, so that students can carry on their higher education studies without disruption.

Part 3 of Schedule 2 amends the existing tuition protection arrangements in HESA to include new provider obligations to assist affected students following a provider default. The defaulting provider must discharge its obligations to the student, and if not, the TP Director must assist the student to either be placed in a suitable replacement course or provided a re-credit of the student's HELP balance. These amendments provide for a consistent approach to tuition protection for HELP students and students that make up-front payments (see Schedule 1 to the Bill).

Detailed explanation

Part 1 - Amendments relating to the Higher Education Tuition Protection Fund, Higher Education Tuition Protection Director and Higher Education Tuition Protection Fund Advisory Board

Higher Education Support Act 2003

Consequential amendments relating to Higher Education Tuition Protection Fund

Section 167-1 of HESA establishes the HELP Tuition Protection Fund , which the dictionary at subclause 1(1) of Schedule 1 to HESA defines as meaning the HELP Tuition Protection Fund as established by section 167-1.

Items 13 and 14 of Schedule 2 to the Bill amend section 167-1 to continue the HELP Tuition Protection Fund, under the new name of Higher Education Tuition Protection Fund ( Fund ).

Items 67 and 68 of Schedule 2 to the Bill accordingly amend the dictionary in Schedule 1 of HESA to delete the definition of HELP Tuition Protection Fund and insert a definition of Higher Education Tuition Protection Fund (which means the Fund established by section 167-1 of HESA).

The following items in Schedule 2 to the Bill make consequential amendments to HESA to reflect the HELP Tuition Protection Fund being renamed as the Higher Education Tuition Protection Fund.

Consequential amendments relating to Higher Education Tuition Protection Fund Advisory Board

Section 167-30 of HESA establishes the HELP Tuition Protection Fund Advisory Board , which the dictionary at subclause 1(1) of Schedule 1 to HESA defines as meaning the HELP Tuition Protection Fund Advisory Board as established by section 167-30.

Items 53 and 54 of Schedule 2 to the Bill amend section 167-30 to change references to the HELP Tuition Protection Fund Advisory Board to its new name of Higher Education Tuition Protection Fund Advisory Board ( Advisory Board ).

Items 67 and 68 of Schedule 2 to the Bill accordingly amend the dictionary in Schedule 1 of HESA to delete the definition of HELP Tuition Protection Fund Advisory Board and insert a definition of Higher Education Tuition Protection Fund Advisory Board (which means the Board established by section 167-30 of HESA).

The following items in Schedule 2 to the Bill make consequential amendments to HESA to reflect the HELP Tuition Protection Fund Advisory Board being renamed as the Higher Education Tuition Protection Fund Advisory Board.

Consequential amendments relating to Higher Education Tuition Protection Director

Section 167-15 of HESA establishes the office of HELP Tuition Protection Director , which the dictionary at subclause 1(1) of Schedule 1 to HESA defines as meaning the person referred to in section 167-15.

Item 29 of Schedule 2 to the Bill repeals and substitutes section 167-15 to change references to the HELP Tuition Protection Director to the new name of Higher Education Tuition Protection Director ( TP Director ).

Items 67 and 68 of Schedule 2 to the Bill accordingly amend the dictionary in Schedule 1 of HESA to delete the definition of HELP Tuition Protection Director and insert a definition of Higher Education Tuition Protection Director (which means the person referred to in section 167-15 of HESA).

The following items in Schedule 2 to the Bill make consequential amendments to HESA to reflect the office of HELP Tuition Protection Director being renamed as the Higher Education Tuition Protection Director.

Other amendments in Part 1 of Schedule 2

Items 17, 18, 21 and 23 - Section 167-5

Section 167-5 of HESA (as amended) concerns amounts that are to be credited to the Higher Education Tuition Protection Fund.

Item 17 After paragraph 167-5(a)

Item 17 adds a new paragraph 167-5(aa), which provides that each amount of up-front payments tuition protection levy received from a registered higher education provider is to be credited to the Fund. The up-front payments tuition protection levy will be imposed through the Levy Bill.

Item 18 Paragraph 167-5(b)

Item 18 amends paragraph 167-5(b) to delete 'paragraph 167-10(1)(f)' and substitute 'paragraph 167-10(1)(g)'. This is a consequential amendment to Item 26 of Schedule 2, which repeals and substitutes subsection 167-10(1).

Item 19 After paragraph 167-5(b)

Item 19 inserts paragraph 167-5(b) to provide that each amount paid by a registered higher education provider to the TP Director under subsection 62L(2) of the TEQSA Act will be credited to the Fund.

Item 21 After paragraph 167-5(d)

Item 21 adds a new paragraph 167-5(da), which provides that any penalties for late payment of the up-front payments tuition protection levy are to be credited to the Fund (see Item 7 of Schedule 1 to this Bill).

Item 23 At the end of section 167-5

Item 23 adds Note 3 at the foot of section 167-5 to explain that the up-front payments tuition protection levy is imposed by the Higher Education (Up-front Payments Tuition Protection Levy) Act 2020 and that the Guidelines deal with the collection of the levy. The Note also refers to new subsection 26A(5) of the TEQSA Act (see Item 7 of Schedule 1 to this Bill).

Items 24 and 25 - Section 167-10

Section 167-10 of HESA (as amended) expands the purposes of the Fund to deal with tuition protection under HESA and the TEQSA Act as introduced through this Bill (refer to Schedule 1 to the Bill).

Item 25 repeals and substitutes subsection 167-10(1). New subsection 167-10(1) provides that the purposes of the Fund are:

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making payments in connection with tuition protection under HESA and the Higher Education Provider Guidelines;

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making payments in connection with tuition protection under the TEQSA Act and the Guidelines;

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paying for the Commonwealth's costs, expenses and obligations relating to the performance of the TP Director's functions (including managing the Fund);

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paying the remuneration and allowances payable to the TP Director and members of the Advisory Board;

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paying any amount that is required or permitted to be repaid;

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reducing the balance of the Fund (and therefore its available appropriation) without making a real or notional payment.

Notes to new subsection 167-10(1) draws the reader's attention to section 80 of the Public Governance, Performance and Accountability Act 2013 (about special accounts) and Part 5A of the TEQSA Act (about tuition protection - see Item 8 of Schedule 1 to this Bill).

Item 26 Subsection 167-10(2) (note)

Item 26 repeals and substitutes the Note to subsection 167-10(2) with two new Notes.

New Note 1 says, by way of example, that the Higher Education Provider Guidelines may provide that a replacement provider could receive a transfer payment if a student accepts an offer of a replacement course with that provider.

New Note 2 explains that, for the purposes of paragraph 167-10(1)(b) (making payments in connection with tuition protection under the TEQSA Act and the Guidelines), subsection 26A(6) of the TEQSA Act provides that the Guidelines may make provision for such payments (see Item 7 of Schedule 1 to this Bill).

Items 32, 34, 36, 37, 38, 39 - Subsection 167-20(1)

Subsection 167-20(1) of HESA (as amended) specifies the functions of the TP Director.

Item 32 adds a new function as paragraph 167-20(1)(aa) - namely to facilitate and monitor the placement of students under Part 5A of the TEQSA Act (as inserted into the TEQSA Act by Item 8 of Schedule 1 to this Bill) in relation to whom a registered higher education provider has defaulted (within the meaning of the TEQSA Act).

Item 34 repeals the function in paragraph 167-20(1)(c)(i) - reporting to the Minister on the operation of Part 5-1A of HESA (tuition protection) and replaces it with a new paragraph 167-20(1)(c)(i). New paragraph 167-20(1)(c)(i) provides that one of the functions of the TP Director is to report to the Minister on the operation of Part 5-1A of HESA and Part 5A of the TEQSA Act (both of which concern tuition protection).

Item 36 repeals and amends paragraph 167-20(1)(d) to remove reference to the TP Director's ability to enter into a loan agreement for the benefit of the Fund, which is no longer a necessary function. The TP Director will continue to have the function of managing the Fund in a way that ensures that it is able to meet all its liabilities from time to time.

Item 37 amends paragraph 167-20(1)(e) to omit 'for the purposes of section 12' and substitute 'under section 13'.

Item 38 adds a new paragraph 167-20(1)(ea) to provide that a further function of the TP Director is to make a legislative instrument every year under section 13 of the Higher Education (Up-front Payments Tuition Protection Levy) Act 2020.

Item 39 adds a new paragraph 167-20(1)(fa) to provide that another function of the TP Director is recommending that TEQSA take action against a registered higher education provider that has defaulted in relation to a student (within the meaning of the TEQSA Act).

Item 41 At the end of section 167-20

Item 41 adds subsection 167-20(3) at the end of section 167-20 to include that the TP Director must, in performing a function, or exercising power, under section 167-20, have regard to how the performance of that function, or exercise of that power, will affect the tuition protection requirements under HESA and the TEQSA Act.

Item 59 Subsection 167-40(3)

Subsection 167-40(3) of HESA concerns the personal liability of members of the Advisory Board. Item 59 repeals and substitutes the subsection to provide that a member of the Advisory Board is not personally liable to any person apart from the Commonwealth for anything done, or omitted to be done, in good faith in the exercise or performance of the Advisory Board's powers and functions. This simplifies the previous wording that instead related to 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 2020.

Item 63 Subsection 215-40(1A)

Item 63 repeals and substitutes subsection 215-40(1A) as it applies to the TP Director's delegation of regulatory powers. Item 63 provides that the TP Director may (in writing) delegate the TP Director's functions and powers under the Regulatory Powers Act as it applies in relation to Part 5-1A of HESA and Part 5A of the TEQSA Act to an SES employee, or an acting SES employee in the Department.

The level of delegation is limited appropriately to the level of SES employees in Department in consideration of the scope and type of power that may be delegated.

Item 65 Subsection 238-6

Section 238-6 Delegations by Higher Education Tuition Protection Director

Item 65 repeals and substitutes section 238-6 of HESA concerning delegations by the (re-named) TP Director.

Previously section 238-6 allowed the TP Director to, in writing, delegate any or all functions and powers under HESA (other than the paragraph 167-20(1)(e) legislative instrument making power) to an APS employee of the Department at the APS Level 6 or higher level).

New subsection 238-6(1) provides that the TP Director may, in writing, delegate any or all functions and powers under HESA (other than the paragraph 167-20(1)(e) and (ea) instrument making powers and Part 5-8) or under the TEQSA Act (other than Division 5 of Part 7 of that Act) to an APS employee of the Department at the APS Level 6 or higher level).

Notes to new subsection 238-6(1) explain:

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paragraphs 167-20(1)(e) and (ea) give the TP Director the function of making legislative instruments under section 13 of the Higher Education Support (HELP Tuition Protection Levy) Act 2020 and section 13 of the Higher Education (Up-front Payments Tuition Protection Levy) Act 2020;

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section 167-20 gives the TP Director certain tuition protection related functions under the TEQSA Act that may be delegated under section 238-6.

New subsection 238-6(2) introduces a safeguard by requiring that, before the TP Director delegates any powers or functions under subsection 238-6(1), the TP Director must have regard to whether:

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in the case of a delegation to an APS employee holding, occupying or performing the duties of a specified office or position - whether that office or position is sufficiently senior for the person to perform the function or exercise the power; or

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in the case of other delegations (i.e. to APS Level 6 or higher level employees of the Department) - whether the person has appropriate qualifications to perform the function or duty or exercise the power.

New subsection 238(3) introduces a further safeguard that requires a person exercising a power or function under a section 238-6 delegation to comply with any directions given by the TP Director.

The TP Director's power to delegate functions and powers to APS Level 6 employees or higher levels is necessary due to the following factors:

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the key role of the TP Director is to provide support to students when their provider defaults, and such defaults cause significant disruption and stress to students for whom support needs to be provided as soon as practicable. Thus, the office of the TP Director needs to be able to respond in a timely fashion at times of crisis that affect multiple students and for this, needs to have the ability to delegate administrative powers and functions to APS Level 6 employees (or higher levels) in the Department;

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the TP Director is the same person who is undertaking the role of the TPS Director, and the VSL Tuition Protection Director. This means in the event of a default the TP Director may experience an increase in the volume of the resultant workload as providers usually enrol students in all three sectors, and thus delegation of TP Director's powers and functions in the manner set out above is required to ensure affected students receive timely tuition protection support across the different schemes.

Item 69 Transitional provision

Section 238-7 of HESA requires the Minister, before 1 July 2021, to commence a review of Parts 5-1A and 5-1B of HESA (relating to tuition protection).

Item 69 provides that if a review under section 238-7 that has commenced, but has not been completed before the commencement of Item 69, is taken to be a review that commenced under section 238-7 as amended by this Bill (once enacted).

Item 70 Saving provision

Item 70 is a saving provision to ensure that any instrument made under subsection 215-40(1A) or section 238-6 of HESA that was in force immediately before the commencement of this Bill (once enacted) continues in force (and may be dealt with) as if it had been made under that subsection or section as amended by this Bill (once enacted).

Part 2 - Amendments relating to information collecting and sharing

Higher Education Support Act 2003

Item 71 Subsection 19-66A(2)(note)

Section 19-66A of HESA deals with tuition protection requirements. Item 71 repeals and substitutes the Note to subsection 19-66A(2). The new Note provides that the HELP tuition protection levy is imposed by the Higher Education Support (HELP Tuition Protection Levy) Act 2020.

Item 72 Paragraph 179-5(b)

Section 179-5 of HESA defines personal information as being:

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information or an opinion about an identified individual, or an individual who is reasonably identifiable, whether the information or opinion is true and whether the information or opinion is recorded in a material form or not; and

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is obtained or created by an officer for the purposes of Chapter 2 or Chapters 3 and 4 of HESA.

Item 72 broadens the second leg of the definition to add in Part 5A of the TEQSA Act (see Item 8 of Schedule 1 to this Bill). This will mean that personal information collected in relation to tuition protection under the TEQSA Act will be covered by the protection of personal information provisions of HESA. Given the same Department and TP Director will be administering tuition protection under HESA and the TEQSA Act as it relates to higher education students, it is reasonable and appropriate for the definition of personal information to be expanded for the purposes of tuition protection.

Item 73 After paragraph 179-15(1)(b)

Subsection 179-15(1) of HESA defines the meaning of an officer . Item 73 expands this definition by inserting a new paragraph 179-15(1)(ba) to provide that a person who was or is an officer of a registered higher education provider is also an officer.

Item 74 After subsection 179-15(3)

Item 74 inserts new subsection 179-15(3AA) to define officer of a registered higher education provider that is a person who is an officer or employee of the provider, or a person who performs services for or on behalf of a provider, even though the person is not an officer or employee of the provider. The inclusion of this definition is necessary given some registered higher education providers (as defined in the TEQSA Act) are not necessarily higher education providers (as defined in HESA) and therefore would not come within the existing definition of officer of a higher education provider under subsection 179-15(3). Officers of registered higher education providers will be required to obtain or create personal information about students as it relates to the new tuition protection requirements in the TEQSA Act.

Item 75 Paragraph 179-15(4)(a)

Paragraph 179-15(4)(a) of HESA defines the meaning of official employment of a Commonwealth officer. Item 75 repeals and substitutes paragraph 179-15(4)(a) to expand this definition by including the Higher Education Support (HELP Tuition Protection Levy) Act 2020, Higher Education (Up-front Payments Tuition Protection Levy) Act 2020 and TEQSA Act. Under the expanded definition, the official employment of a Commonwealth officer is the performance of duties or functions, or the exercise of powers under HESA, VET Student Loans Act 2016 and the above Acts.

This amendment will allow a Commonwealth officer (e.g. Departmental officers and TP Director) to disclose personal information in the course of official employment to persons described under section 179-20 as it relates to exercising powers and functions in relation to tuition protection under the various Acts. The expansion of the permitted disclosures of personal information is a reasonable, necessary and proportionate measure to enable Commonwealth officers to perform functions in relation to tuition protection under HESA and the TEQSA Act as it relates to providing tuition protection to domestic higher education students affected by a provider default.

Item 76 After paragraph 179-15(4)(b)

Item 76 adds new paragraph 179-15(4)(ba) to include that the official employment of an officer of a registered higher education provider is service as such an officer.

Item 77 After paragraph 179-20(a)

Item 77 adds new paragraph 170-20(aa) to authorise the disclosure by a Commonwealth officer of personal information to a person in connection with the provision of actuarial services for the purposes of assisting the officer to perform duties or functions or exercise powers mentioned in paragraph 179-15(4)(a). The purpose of this permitted disclosure is to authorise a Commonwealth officer (e.g. Departmental officer or TP Director) to disclose personal information (e.g. students) to the Australian Government Actuary to obtain expert actuarial services in connection with assisting that officer to perform functions and powers as it relates to tuition protection legislation. For example, the Australian Government Actuary may provide advice to the Department as it relates to setting the levies imposed by the Higher Education Support (HELP Tuition Protection Levy) Act 2020 and Higher Education (Up-front Payments Tuition Protection Levy) Act 2020.

This disclosure is a reasonable, necessary and proportionate measure to enable Commonwealth officers to obtain actuarial services to assist them to perform their role and functions as it relates to administering tuition protection.

Item 78 After paragraph 179-20(c)

Item 78 adds new paragraph 179-20(caa) to authorise the disclosure by a Commonwealth officer of personal information to an officer of a registered higher education provider to assist the provider's officer in performing duties or functions, or in exercising powers, under, or for the purposes of HESA or the TEQSA Act. This disclosure is a reasonable, necessary and proportionate measure which is required for the purposes of administering tuition protection effectively to affected students under HESA and the TEQSA Act. For example, Departmental officers assisting the TP Director may need to disclose personal information about a student to an officer of a registered higher education provider (as a replacement provider) in order for the replacement provider to place the student in a suitable replacement course in the event of a provider default.

Item 79 After paragraph 179-20(d)

Item 79 adds new paragraph 179-20(da) to authorise the disclosure by an officer of a registered higher education provider of personal information to a Commonwealth officer to assist the Commonwealth officer in the Commonwealth officer's official employment. This disclosure is a reasonable, necessary and proportionate measure which is required for the purposes of administering tuition protection effectively to affected students under HESA and the TEQSA Act. For example, an officer of a registered higher education provider that defaults in relation to a student may need to disclose personal information about affected students to the TP Director and Departmental officers in order to assist that student in respect to tuition protection under HESA and the TEQSA Act.

Item 80 Subclause 1(1) of Schedule 1

Item 80 inserts the definition of officer of a registered higher education provider to have the meaning given by subsection 179-15(3AA).

Part 3 - Other amendments

Higher Education Support Act 2003

Items 81 and 82 - Section 36-24A

Section 36-24A of HESA sets out when higher education providers that have defaulted are required to pay amounts to a person or to the Commonwealth.

Item 81 repeals and substitutes paragraph 36-24A(1)(e) of HESA which sets out when a higher education provider must, on the Secretary's behalf, determine that section 36-24A applies to a person. The criteria in new paragraph 36-24A(1)(e) are any of the following:

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the provider identifies under paragraph 166-25(4)(b) that there is no suitable replacement unit or replacement course for the person;

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the person elects under subparagraph 166-25(7)(a)(iii) to have an amount equal to amounts of HECS-HELP assistance they received for the unit re-credited to their HELP balance;

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the TP Director decides under paragraph 166-26B(2)(b) that the TP Director is not satisfied there is a suitable replacement course available for the person;

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the person elects under subparagraph 166-26B(4)(a)(iii) to have an amount equal to amounts of HECS-HELP assistance they received for the unit re-credited to their HELP balance.

Item 82 repeals and substitutes subsection 36-24A(2). New subsection 36-24A(2) provides that a provider must pay the Commonwealth an amount equal to any HECS-HELP assistance the person was entitled to for the unit.

Items 83 Section 97-42(1)(d)

Section 97-42 of HESA concerns re-crediting a person's HELP balance in relation to HECS-HELP assistance in the event of provider default.

Subsection 97-42(1) of HESA sets out the criteria for when a higher education provider must, on the Secretary's behalf, re-credit a person's HELP balance with an amount equal to the amounts of HECS-HELP assistance the person received for a unit of study. Item 83 repeals and substitutes paragraph 97-42(1)(d). The criteria in new paragraph 97-42(1)(d) are:

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the provider identifies under paragraph 166-25(4)(b) that there is no suitable replacement unit or suitable replacement course for the person;

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the person elects under subparagraph 166-25(7)(a)(iii) to have an amount equal to amounts of HECS-HELP assistance they received for the unit re-credited to their HELP balance;

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the TP Director makes a decision under paragraph 166-26B(2)(b) that the TP Director is not satisfied there is a suitable replacement course available;

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the person elects under subparagraph 166-26B(4)(a)(iii) to have an amount equal to amounts of HECS-HELP assistance they received for the unit re-credited to their HELP balance.

Items 84 Section 104-42(1)(d)

Section 104-42 of HESA concerns re-crediting a person's FEE-HELP balance if there is provider default or the person elects for re-crediting.

Subsection 104-42(1) sets out the criteria when a higher education provider must, on the Secretary's behalf, re-credit a person's HELP balance with an amount equal to the amounts of FEE-HELP assistance the person received for a unit of study.

Item 84 repeals and substitutes paragraph 104-42(1)(d).The criteria in new paragraph 104-42(1)(d) are any of the following:

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the provider identifies under paragraph 166-25(4)(b) that there no suitable replacement unit or replacement course for the person;

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the person elects under subparagraph 166-25(7)(a)(iii) to have an amount equal to amounts of FEE-HELP assistance they received for the unit re-credited to their HELP balance;

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the TP Director makes a decision under paragraph 166-26B(2)(b) that the TP Director is not satisfied there is a suitable replacement course available;

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the person elects under subparagraph 166-26B(4)(a)(iii) to have an amount equal to amounts of FEE-HELP assistance they received for the unit re-credited to their HELP balance.

Item 85 Section 166-1

Item 85 repeals section 166-1 and substitutes the outline to reflect the changes to tuition protection. The outline includes reference to the fact that if the student has made an up-front payment for the unit the defaulting provider may also have obligations under Part 5A of the TEQSA Act in relation to the default.

Item 86 After subsection 166-5(2)

Section 166-5 of HESA concerns the application of Part 5-1A of Division 1 of Chapter 5 HESA (tuition protection).

Subsection 166-5(2) provides that, despite subsection 166-5(1), the Minister may by written notice determine Part 5-1A applies or does not apply to a specified higher education provider.

Item 86 repeals subsection 166-5(2) and adds a new subsection 166-5(2A) which provides that, in considering where it is appropriate that Part 5-1A applies or does not apply to a provider, the Minister must have regard to all of the following:

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the risk of the provider defaulting in relation to one or more students;

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whether the provider is financially viable and likely to remain so;

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any non-compliance or risk of non-compliance with HESA, or legislative instruments made under HESA;

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any advice the Secretary, TEQSA or the TP Director gives to the Minister about any of the above matters;

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any other matter the Minister considers appropriate.

This amendment provides a limitation to the Minister's discretionary power to make a determination, to ensure that the Minister must consider the relevant matters identified above in determining whether it is appropriate to exercise the power.

Item 87 Subsection 166-5(5)

Item 87 repeals and substitutes subsection 166-5(5) to clarify that despite subsection 166-5(1), sections 166-27, 166-30 and 166-32 apply to all higher education providers. Section 166-27 deals with provider obligations to provide information about replacement courses, section 166-30 deals with obligations of providers who provide replacement courses and section 166-32 deals with the requirement of providers who provide replacement courses to keep up to date enrolment information.

Item 88 At the end of subsection 166-10(1)

Subsection 166-10(1) provides for when a higher education provider defaults in relation to a student. Item 88 adds a Note to subsection 166-10(1) which explains that, if a student has made any up-front payments in relation to units of study of an original course, the provider may also have defaulted in relation to the student under section 62C of the TEQSA Act (see Item 8 of Schedule 1 to this Bill).

Item 89 After paragraph 166-15(3)(a)

Subsection 166-15(3) requires a provider that has defaulted in relation to a student to give a written notice within three business days to the TP Director specifying certain matters. Item 89 adds new subparagraphs 166-15(3)(aa)(i) and (ii) to add the following additional matters:

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whether the provider intends to discharge its obligations under section 166-25 to the student; and

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if appropriate, how the provider intends to discharge those obligations.

Item 90 Section 166-25

Item 90 repeals and substitutes section 166-25.

Section 166-25 Obligation on providers in case of default

New subsection 166-26(1) provides that section 166-25 applies if a higher education provider defaults in relation to a student.

Provider obligations

New subsection 166-25(2) provides that a provider must, within 14 days after a default (the provider obligation period ) discharge its section 166-25 obligations to the student.

Under new subsection 166-25(3), the provider discharges its obligations to a student if either of the following applies:

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the provider arranges for the student to be offered a place in a suitable replacement unit or suitable replacement course and the student accepts the offer in writing;

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the provider re-credits the student's HELP balance in accordance with either subsection 97-42(1) or subsection 104-42(1) and pays an amount to the Commonwealth in accordance with either subsection 36-24A(2) or 110-5(1).

Suitable replacement units or suitable replacement courses

New subsection 166-25(4) requires that a provider must identify whether:

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there are one or more suitable replacement units or suitable replacement courses for the student; or

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there is no suitable replacement units or suitable replacement courses for the student.

Matters relating to whether a course is a suitable replacement course

New subsection 166-25(5) requires a provider to have regard to the following when identifying whether there is a suitable replacement course:

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

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what credits the student may receive for units successfully completed in the original course;

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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 from where the replacement course will primarily be delivered;

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whether a student will incur unreasonable additional fees and will be able to attend the course without unreasonable impacts on the student's prior commitments;

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any additional matters that may be prescribed in the Higher Education Provider Guidelines.

Matters relating to whether a unit is a suitable replacement unit

New subsection 166-25(6) requires a provider to have regard to the following when identifying whether there is a suitable replacement unit:

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whether the student will receive credit under the student's original course for the replacement unit;

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whether the mode of delivery of the replacement unit is the same as the mode of delivery of the affected unit;

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the location from where the replacement unit will be primarily delivered;

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whether a student will incur unreasonable additional fees and will be able to attend the unit without unreasonable impacts on the student's prior commitments;

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any additional matters that may be prescribed in the Higher Education Provider Guidelines.

Suitable replacement unit or suitable replacement course available

New subsection 166-25(7) requires that where paragraph 166-25(4)(a) applies (the provider identified that there are one or more suitable replacement units or courses for the student) it must give the student a written notice including the following:

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a statement the student can decide to do one of the following:

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enrol in a suitable replacement unit or suitable replacement course;

o

enrol in another unit of study or course;

o

elect to have the amount of FEE-HELP or HECS-HELP assistance the student received for the affected unit re-credited to their HELP balance;

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a description of the suitable replacement unit or suitable replacement course and the qualification it leads to;

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provider contact details for each suitable replacement unit or course;

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an explanation that, if the student has paid tuition fees or a student contribution amount for the affected unit of the original course, these amounts would not be payable for a suitable replacement unit or a replacement unit of a suitable replacement course;

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an explanation that, if the student enrols in another unit or course other than the replacement unit or course, the provider of that unit or course is not obliged to offer a replacement unit without charge to the student;

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an explanation of the matters that the provider must consider under subsections 166-25(5) and (6);

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any additional matters that may be prescribed in the Higher Education Provider Guidelines.

Elections for up-front payments must be consistent

New subsection 166-25(8) provides that, despite paragraph 166-25(7)(a) (student choice), if an up-front payment was made for any affected units of the original course, any elections made by the student under paragraph 166-25(7)(a) in relation to those units must be consistent with any elections made under paragraph 62F(4)(a) of the TEQSA Act in relation to those units (see Item 8 of Schedule 1 to this Bill). The Minister may prescribe in the Higher Education Provider Guidelines circumstances in which elections are considered to be consistent or inconsistent.

For example, a student who is entitled to FEE-HELP or HECS-HELP assistance for an affected unit of an original course also makes an up-front payment for the same affected unit. If the student elects, under subparagraph 166-25(7)(a)(i) to enrol in a suitable replacement course, then the student must also elect under subparagraph 62F(4)(a)(i) of the TEQSA Act to enrol in a suitable replacement course for that affected unit.

Section 166-26 Failure to discharge obligations

New section 166-26 provides that a higher education provider is liable to a civil penalty and commits an offence of strict liability, carrying a penalty of 60 penalty units, if they are a higher education provider that defaults in relation to a student and fails to discharge its section 166-25 obligations to the student (whether or not the provider is still a higher education provider at that time).

New subsection 166-26(3) provides that the maximum penalty for each day that a subsection 166-26(2) offence continues is 10 per cent of the maximum penalty that can be imposed (i.e. a maximum daily penalty of 6 penalty units).

A Note to subsection 166-26(3) explains that subsection 166-26(2) is a continuing offence under section 4K of the Crimes Act 1914.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under HESA in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see section 215-20), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 166-26A Providers to notify of outcome of discharge of obligations

New section 166-26A requires a higher education provider that defaults in relation to a student to give the TP Director a notice within 7 days after the end of the provider obligation period (see subsection 166-25(2)).

New section 166-26A requires the subsection 166-26A(1) notice to include the following:

•

whether the provider has discharged its section 166-25 obligations to the student;

•

if the provider has arranged a replacement unit or replacement course - details of the student and the replacement unit or course, and evidence of the student's acceptance of an offer of a place in the replacement unit or course;

•

if the provider has re-credited the student's HELP balance and paid an amount to the Commonwealth as per paragraph 166-25(3)(b) - details of the student, of the amount re-credited, and the amount paid.

New subsection 166-26A(3) provides that the notice must comply with any requirements specified in the Higher Education Provider Guidelines. The purpose of this notification obligation is to ensure that the TP Director is aware of whether a provider has discharged its obligations to a student, and if not, the TP Director is able to take steps to assist the student under section 166-26B.

Failure to comply with new section 166-26A gives rise to a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units. Making contravention of this provision subject to a civil penalty is appropriate as it deters providers from non-compliance in circumstances where non-compliance will negatively impact on the TP Director's ability to assist students affected by provider default. In addition, contravention of this provision may lead to the issuing of an infringement notice under the Regulatory Powers Act.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under HESA in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see section 215-20), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 166-26B Student placement service

New subsection 166-26B(1) provides the section applies if the TP Director has determined a higher education provider has defaulted in relation to a student, and the provider has either failed to discharge its section 166-25 obligations to the student by the end of the provider obligation period, or it is unlikely to be able to do so. For example, the TP Director may consider it is unlikely that a provider will discharge its obligations to the student if the provider enters into liquidation, which would inevitably mean the provider is unlikely to offer a suitable replacement course or suitable replacement unit or provide a refund to the student.

Higher Education Tuition Protection Director must decide

New subsection 166-26(B)(2) provides that the TP Director must be satisfied whether or not there are any suitable replacement courses for the student.

Matters relating to whether a course is a suitable replacement course

Under new subsection 166-26B(3), the matters the TP Director must have regard to in deciding whether there is a suitable replacement course are:

•

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

•

what credits the student may receive for the units of study in the original course that the student has successfully completed;

•

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

•

the location where the replacement course will be primarily delivered;

•

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

•

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

•

any other matters prescribed by the Higher Education Provider Guidelines.

Pursuant to new subsection 166-26B(4), if the TP Director is satisfied that there are one or more suitable replacement courses for a student, the TP Director must give a written notice to the student. This notice must include:

•

a statement the student can decide to do one of the following:

o

enrol in a suitable replacement course;

o

enrol in another course; or

o

elect to have the amount of FEE-HELP assistance or HECS-HELP assistance the student received for the affected unit re-credited to their HELP balance;

•

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

•

provider contact details for each suitable replacement course;

•

an explanation that, if the student has paid tuition fees or a student contribution amount for the affected unit of the original course, these amounts would not be payable for a replacement unit in a suitable replacement course;

•

an explanation that, if the student enrols in a course other than the replacement course, the provider of that course is not obliged to offer a replacement unit without charge to the student;

•

an explanation of the matters that the provider must consider under subsection 166-26B(3);

•

any additional matters that may be prescribed in the Higher Education Provider Guidelines.

Accepting an offer of a suitable replacement course

New subsection 166-26B(5) and (6) provide that, if the TP Director arranges for the student to be offered a place in a replacement course, the student may accept the offer and, if the student does so, the acceptance must be in writing to the replacement provider and must be made within the period specified in new subsection 166-26B(7).

Under new subsection 166-26B(7), the time for the student to accept the offer of a replacement course is:

•

within 30 days after the TP Director gives notice to the student under subsection 166-26B(4); or

•

if the TP Director determines exceptional circumstances apply:

o

within a shorter period as determined by the TP Director in writing; or

o

any longer period (not exceeding 12 months) as determined by the TP Director and agreed to by the student.

No suitable replacement course available

New subsection 166-26B(8) provides that, if the TP Director is satisfied that there is not a suitable replacement course, the TP Director is required to give the student a notice that:

•

explains the matters the TP Director is required to consider for the purposes of deciding whether there is a suitable replacement course;

•

explains the student's right to request a reconsideration of the decision, under section 209-10, within 28 days after the student is given the notice;

•

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

•

a statement that, if the student does not apply for reconsideration, an amount equal to the amounts of FEE-HELP or HECS-HELP assistance the student received for the affected unit will be re-credited to the student's HELP balance.

Elections for up-front payments must be consistent

New subsection 166-26B(9) provides that, despite paragraph 166-26B(4)(a) (student choice), if an up-front payment was made for any affected units of the original course, any decision the student has made under that paragraph in relation to those units must be consistent with any elections made under paragraph 62J(4)(a) of the TEQSA Act in relation to those units. Under subsection 166-26B(10), the Minister may prescribe in the Higher Education Provider Guidelines circumstances in which elections are considered to be consistent or inconsistent for the purposes of subsection 166-26B(9).

For example, a student who is entitled to FEE-HELP assistance for an affected unit of an original course also makes an up-front payment for the same affected unit. If the student elects, under subparagraph 166-26B(4)(a)(iii) to have an amount re-credited to the student's HELP balance, then the student must elect under subparagraph 62J(4)(a)(iii) of the TEQSA Act to receive an amount equal to the refund for the up-front payment for that same affected unit.

Item 91 Subsection 166-27(1)

Subsection 166-27(1) of HESA enables the TP Director to require a higher education provider to give information the Director reasonably requires to make a decision about suitable replacement courses for a student in respect of whom the provider has defaulted. Item 91 makes a consequential amendment to omit reference to subsection 166-25(1) and substitute subsection 166-26B(2).

Items 92 to 94 - Subsection 166-30

Section 166-30 of HESA provides obligations of replacement providers. Items 92 to 94 amend section 166-30 to reflect the fact that a student may accept an offer of a place in a replacement unit or replacement course.

Item 95 Subsection 166-32(1)

Section 166-32 of HESA provides the obligations of replacement providers regarding enrolment information. Item 95 repeals and substitutes subsection 166-32(1) to update the section to include the requirement that replacement providers keep records in relation to a replacement unit or replacement course.

Item 96 Paragraph 166-35(1)(b)

Section 166-35 of HESA requires the TP Director to give notices to the Secretary and a provider that defaults in relation to a student where, under new paragraph 166-35(1)(b), either the TP Director is not satisfied there is a suitable replacement course for the student, or the student elects to have amounts of FEE-HELP or HECS-HELP assistance received for an affected unit re-credited to their HELP balance.

Item 97 At the end of Division 2 of Part 5-1A

Item 97 adds a news sections 166-40 and 166-45 at the end of Division 2 of Part 5-1A of HESA.

Section 166-40 Other tuition protection information must be provided

Subsection 166-40(1) provides that the new section applies to a higher education provider if both of the following apply:

•

the TP Director reasonably believes the provider has information relevant to the TP Director's functions under HESA;

•

the TP Director has given the provider a written notice requesting it provide the TP Director with the information within the period specified in the notice (which must be no less than 14 days after the notice is given) and in the manner specified in the notice.

The disclosure of personal information about students between the TP Director and a provider under this section is reasonable, necessary and proportionate to achieving the legitimate aim of the TP Director's role to assist affected students if the defaulting provider fails to discharge its obligations.

A provider must comply with the notice, and a contravention of this section is a civil penalty and an offence of strict liability. In both instances, the penalty is 60 penalty units.

As this is a strict liability offence, mental elements (intention, recklessness, negligence) would not need to be proven, only the factual elements. However, strict liability allows the defence of honest and reasonable mistake of fact. Applying strict liability to these offences is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers and is appropriate because the following apply:

•

the offence is not punishable by imprisonment;

•

the offence is punishable by a fine of up to 60 penalty units;

•

the offence is subject to specific criteria set out in the section and not subject to broad uncertain criteria;

•

the offence is likely to significantly enhance the effectiveness of the enforcement regime under HESA in deterring non-compliance from providers in order to achieve the overall purposes of the Bill to provide tuition protection to domestic higher education students;

•

there are legitimate grounds for penalising persons lacking fault, for example, the TP Director will likely remind and place the provider on notice if the TP Director is concerned that a provider is unlikely to meet certain requirements to guard against the possibility of any contravention; and

•

the contravention of this section is subject to an infringement notice scheme (see section 215-20), which allows for a less serious form of enforcement in cases where prosecution is not justified (prosecution would only be pursued in more serious cases).

Section 166-45 Continuing application of Part to certain persons

Section 166-45 provides that Part 5-1A continues to apply in relation to a person that was a higher education provider as if the person were still a higher education provider, for the purposes of dealing with or resolving any matter that arose during, or that relates to, the period when the person was a higher education provider.

Item 98 Paragraph 167-5(b)

Section 167-5 of HESA concerns credits to the Fund. Item 98 makes a consequential amendment to paragraph 167-5(b) to omit 'paragraph 36-24A(2)(b)' and substitute 'subsection 36-24A(2)'.

Item 99 Paragraph 169-15(4)(b)

Item 99 amends paragraph 169-15(4)(b) to clarify that a student may accept an offer of a place in a replacement unit or replacement course.

Items 100 and 101 - Paragraphs 209-10(4A)(a) and (b)

Section 209-10 of HESA concerns the reconsideration of reviewable decisions on request. Items 100 and 101 makes consequential amendments to paragraphs 209-10(4A)(a) and (b) as a result of above amendments.

Item 102 - Subsection 212-1(2)

Section 212-1 of HESA concerns AAT review of reviewable decisions and subsection 212-1(2) provides that, despite subsection 212-1(1), an application cannot be made to review a decision made under paragraphs 166-25(1)(a) or (b) (about a suitable replacement course).

Item 89 of Schedule 2 to this Bill repeals section 166-25 and substitutes new sections, including new section 166-26B about the student placement service. Item 102 makes a consequential amendment to subsection 212-1(2) to omit 'paragraph 166-25(1)(a) or (b)' and substitute 'paragraph 166-26B(2)(a) or (b)'.

Item 103 Subclause 1(1) of Schedule 1

Item 103 inserts a definition of provider obligation period into the dictionary in subclause 1(1) of Schedule 1 to HESA. This definition draws reference to subsection 166-25(2) (see Item 91 of Schedule 2 to this Bill).

Item 104 Subclause 1(1) of Schedule 1 (definition of replacement unit)

Item 104 omits 'of a *replacement course' from the definition of replacement unit.

Item 105 Application of amendments

Item 105 provides that the amendments made by Part 2 of Schedule 2 to this Bill (once enacted) apply in relation to provider defaults that occur on or after the commencement of this Bill (as enacted) (i.e. 1 January 2021).

Item 106 Saving provision

Item 106 is a saving provision which provides that an instrument made under subsection 166-5(2) of HESA that was in force immediately before the commencement of this Bill (once enacted) continues in force (and may be dealt with) as if it had been made under that subsection as amendment by this Bill (once enacted).