Education Legislation Amendment (Up-front Payments Tuition Protection) Act 2020 (101 of 2020)

Schedule 1 Amendment of the Tertiary Education Quality and Standards Agency Act 2011

Tertiary Education Quality and Standards Agency Act 2011

8 After Part 5

Insert:

Part 5A - Tuition protection

Division 1 - Preliminary

62A What this Part is about

Certain registered higher education providers who default in delivering a unit of study to a domestic student for whom an up-front payment for the unit of study has been made must give information about the default to the Higher Education Tuition Protection Director and to the student. If the student was entitled to FEE-HELP assistance or HECS-HELP assistance for the unit, the provider may also have obligations under Part 5-1A of the Higher Education Support Act 2003 in relation to the default.

The provider must assist the student to find a replacement unit or replacement course, or provide a refund to the student (and offer the student a choice about this). If the provider fails to discharge this obligation, the Director must offer the student a suitable replacement course. If there is no suitable replacement course, or the student does not accept the offer, the Director must provide a refund to the student.

62B Application of this Part

(1) This Part applies to registered higher education providers other than:

(a) Table A providers; or

(b) providers that are owned by the Commonwealth, a State or a Territory; or

(i) the Technical and Further Education Commission Act 1990 (NSW);

(ii) the Education and Training Reform Act 2006 (Vic.);

(iii) the TAFE Queensland Act 2013 (Qld);

(iv) the Vocational Education and Training Act 1996 (WA);

(v) the TAFE SA Act 2012 (SA);

(vi) the Training and Workforce Development Act 2013 (Tas.);

(vii) the Canberra Institute of Technology Act 1987 (ACT); or

(d) providers of a kind prescribed by the Up-front Payments Guidelines.

(2) Despite subsection (1), the Minister may, by written notice, determine that this Part:

(a) applies to a specified registered higher education provider; or

(b) does not apply to a specified registered higher education provider;

if the Minister considers it appropriate that this Part applies, or does not apply, to the provider.

(3) In deciding whether it is appropriate that this Part applies, or does not apply, to a specified registered higher education provider, the Minister must have regard to the following:

(a) the risk of the provider defaulting in relation to one or more domestic students;

(b) the provider's financial status and capacity;

(c) any non-compliance, or risk of future non-compliance, with the Threshold Standards, this Act, legislative instruments made under this Act or this Act's associated provisions;

(d) any advice given to the Minister by TEQSA or the Higher Education Tuition Protection Director in relation to any of the matters referred to in paragraphs (a) to (c);

(e) any other matter the Minister considers appropriate.

(4) A determination under subsection (2):

(a) may be made either unconditionally or subject to conditions; and

(b) may be expressed to be in force indefinitely or for a specified period.

(5) A determination made under subsection (2) is not a legislative instrument.

(6) Despite subsection (1), sections 62N, 62P and 62Q apply to all registered higher education providers.

Note: Section 62N deals with the obligations of providers to provide information about replacement courses, section 62P deals with obligations of providers who provide replacement courses and section 62Q deals with the requirement of providers who provide replacement courses to keep up-to-date enrolment information.

62C When a provider defaults in relation to a student

(1) A registered higher education provider defaults in relation to a domestic student if:

(a) the provider fails to start to provide a unit of study to the student on the day the unit was scheduled to start; and

(b) the student has not withdrawn before that day; and

(i) was made for the student for the unit of study on or before that day; or

(ii) was not made for the student for the unit on or before that day and the student was not entitled, and would not have been entitled, to FEE-HELP assistance or HECS-HELP assistance for the unit.

(2) A registered higher education provider defaults in relation to a domestic student if:

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

(b) the student has not withdrawn before that day; and

(i) was made for the student for the unit of studyon or before that day; or

(ii) was not made for the student for the unit on or before that day and the student was not entitled, and would not have been entitled, to FEE-HELP assistance or HECS-HELP assistance for the unit.

(3) A registered higher education provider defaults in relation to a domestic student if circumstances prescribed by the Up-front Payments Guidelines apply in relation to the provider and the student.

Note: If the student was entitled, or would have been entitled, to FEE-HELP assistance or HECS-HELP assistance in relation to the unit of study (or any other affected units of the original course) the provider may also have defaulted in relation to the student under the Higher Education Support Act 2003: see section 166-10 of that Act.

Division 2 - Tuition Protection

Subdivision A - Obligations of defaulting providers

62D Providers must give notice of default to Higher Education Tuition Protection Director

Application of section

(1) This section applies if a registered higher education provider defaults in relation to a domestic student.

Notifying the Higher Education Tuition Protection Director of default

(2) The provider must, within 24 hours of the default occurring, give written notice to the Higher Education Tuition Protection Director of the circumstances of the default.

Notifying the Higher Education Tuition Protection Director of details of default

(3) The provider must, within 3 business days of the default occurring, give a written notice to the Higher Education Tuition Protection Director specifying:

(a) the following information:

(i) the student's full name and contact details;

(ii) the units of study and the Australian course of study that the student was enrolled in at the time of the default;

(iii) the amount of the tuition fees for each unit of study that the student was enrolled in at the time of the default;

(iv) details about the payment of those tuition fees; and

(b) advice as to:

(i) whether the provider intends to discharge its obligations to the student under section 62F; and

(ii) (if appropriate) how the provider intends to discharge those obligations; and

(4) If requested in writing by the Higher Education Tuition Protection Director, the provider must give to the Director a copy of a student's record of results for any units of study that the student has completed.

Notice requirements

(5) A notice given under subsection (2) or (3) must comply with any requirements prescribed by the Up-front Payments Guidelines.

Civil penalty

(6) A registered higher education provider is liable to a civil penalty if the provider contravenes this section.

Civil penalty: 60 penalty units.

Offence

(7) A registered higher education provider commits an offence of strict liability if the provider contravenes this section.

Penalty: 60 penalty units.

62E Providers must give notice of default to affected students

Application of section

(1) This section applies if a registered higher education provider defaults in relation to a domestic student.

Notifying students of default

(2) The provider must, within 24 hours of the default occurring, give written notice of the default to the domestic student in relation to whom the provider has defaulted.

Notice requirements

(3) A notice given under subsection (2) must comply with any requirements prescribed by the Up-front Payments Guidelines.

Civil penalty

(4) A registered higher education provider is liable to a civil penalty if the provider contravenes this section.

Civil penalty: 60 penalty units.

Offence

(5) A registered higher education provider commits an offence of strict liability if the provider contravenes this section.

Penalty: 60 penalty units.

62F Obligations on providers in case of default

Application of section

(1) This section applies if a registered higher education provider defaults in relation to a domestic student.

Provider obligations

(2) The provider must discharge its obligations to the student, in accordance with this section, within the period (the provider obligation period ) of 14 days after the day the provider defaulted in relation to the student.

(3) The provider discharges its obligations to the student if:

(a) 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; or

(b) the provider provides a refund in accordance with subsection (8).

Suitable replacement units or suitable replacement courses

(4) The provider must identify whether:

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

(b) there is no suitable replacement unit or suitable replacement course for the student.

Matters relating to whether a course is a suitable replacement course

(5) In identifying whether there is a suitable replacement course, the provider must have regard to the following matters:

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

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

(d) the location where the replacement course will be primarily delivered;

(e) whether the student:

(i) will incur additional fees that are unreasonable; and

(ii) will be able to attend the course without unreasonable impacts on the student's prior commitments;

(f) any other matters prescribed by the Up-front Payments Guidelines.

Matters relating to whether a unit is a suitable replacement unit

(6) In identifying whether there is a suitable replacement unit, the provider must have regard to the following matters:

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

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

(d) whether the student:

(i) will incur additional fees that are unreasonable; and

(ii) will be able to attend the replacement unit without unreasonable impacts on the student's prior commitments;

(e) any other matters prescribed by the Up-front Payments Guidelines.

Suitable replacement unit or suitable replacement course available

(7) If paragraph (4)(a) applies, the provider must give a written notice to the student that includes the following:

(a) a statement that the student may decide to do one of the following:

(i) enrol in a suitable replacement unit or suitable replacement course;

(ii) enrol in another unit of study or course;

(iii) elect to receive a refund in accordance with subsection (8);

(b) a description of each suitable replacement unit or suitable replacement course, including the qualification that the suitable replacement course leads to;

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

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

(f) an explanation of the matters the provider must have regard to under subsections (5) and (6);

(g) any other matters prescribed by the Up-front Payments Guidelines.

No suitable replacement unit or suitable replacement course or student elects refund

(8) If:

(a) paragraph (4)(b) applies; or

(b) the student elects to receive a refund as referred to in subparagraph (7)(a)(iii);

the provider must pay the student a refund of the amount equal to the sum of any up-front payments made for the affected unit.

(9) The provider must provide the refund under subsection (8) in accordance with any requirements prescribed by the Up-front Payments Guidelines.

Elections for FEE-HELP or HECS-HELP must be consistent

(10) Despite paragraph (7)(a), if the student was entitled to FEE-HELP assistance or HECS-HELP assistance for any affected units of the original course, any elections made under that paragraph in relation to those units must be consistent with any elections made under paragraph 166-25(7)(a) of the Higher Education Support Act 2003 in relation to those units.

Example: A student who is entitled to FEE-HELP assistance or HECS-HELP assistance for an affected unit of an original course also makes an up-front payment for the same affected unit. The student elects, under subparagraph 166-25(7)(a)(i) of the Higher Education Support Act 2003, to enrol in a suitable replacement course. The student must elect to enrol in a suitable replacement course under subparagraph (7)(a)(i) of this section in relation to the affected unit.

(11) The Up-front Payments Guidelines may prescribe circumstances in which elections are considered to be consistent or inconsistent for the purposes of subsection (10).

62G Failure to discharge obligations

Civil penalty

(1) A registered higher education provider is liable to a civil penalty if:

(a) the provider defaults in relation to a domestic student; and

(b) the provider fails to discharge its obligations to the student in accordance with section 62F.

Civil penalty: 60 penalty units.

Offence

(2) A registered higher education provider commits an offence of strict liability if:

(a) the provider defaults in relation to a domestic student; and

(b) the provider fails to discharge its obligations to the student in accordance with section 62F.

Penalty: 60 penalty units.

(3) The maximum penalty for each day that an offence under subsection (2) continues is 10% of the maximum penalty that can be imposed in respect of that offence.

Note: Subsection (2) is a continuing offence under section 4K of the Crimes Act 1914.

62H Providers to notify of outcome of discharge of obligations

(1) A registered higher education provider that defaults in relation to a domestic student must give a notice to the Higher Education Tuition Protection Director within 7 days after the end of the provider obligation period.

(2) The notice must include the following:

(a) whether the provider discharged its obligations to the student in accordance with section 62F;

(b) if the provider arranged a replacement unit or replacement course:

(i) details of the student; and

(ii) details of the replacement unit or replacement course; and

(iii) evidence of the student's acceptance of an offer of a place in the replacement unit or replacement course;

(i) details of the student; and

(ii) details of the amount of the refund.

(3) The notice must comply with any requirements prescribed by the Up-front Payments Guidelines.

Civil penalty

(4) A registered higher education provider is liable to a civil penalty if the provider contravenes this section.

Civil penalty: 60 penalty units.

Offence

(5) A registered higher education provider commits an offence of strict liability if the provider contravenes this section.

Penalty: 60 penalty units.

Subdivision B - Role of the Higher Education Tuition Protection Director

62J Student placement service

Application of section

(1) This section applies if the Higher Education Tuition Protection Director determines that:

(a) a registered higher education provider has defaulted in relation to a domestic student; and

(b) either:

(i) the provider has failed to discharge its obligations under section 62F to the student by the end of the provider obligation period; or

(ii) the provider is unlikely to be able to discharge its obligations under section 62F to the student by the end of the provider obligation period.

Higher Education Tuition Protection Director must decide

(2) The Higher Education Tuition Protection Director must decide:

(a) that the Director is satisfied that there are one or more suitable replacement courses for the student; or

(b) that the Director is not satisfied that there is a suitable replacement course for the student.

Matters relating to whether a course is a suitable replacement course

(3) In deciding whether the Higher Education Tuition Protection Director is satisfied that there is a suitable replacement course, the Director must have regard to the following matters:

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

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

(d) the location where the replacement course will be primarily delivered;

(e) whether the student:

(i) will incur additional fees that are unreasonable; and

(ii) will be able to attend the course without unreasonable impacts on the student's prior commitments;

(f) any other matters prescribed by the Up-front Payments Guidelines.

Suitable replacement course available

(4) If paragraph (2)(a) applies, the Higher Education Tuition Protection Director must give a written notice to the student that includes the following:

(a) a statement that the student may decide to do one of the following:

(i) enrol in a suitable replacement course;

(ii) enrol in another course;

(iii) elect to have an amount equal to the amount the provider was liable to pay the student under subsection 62F(8) paid to the student;

(b) a description of each suitable replacement course, including the qualification that the replacement course leads to;

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

(e) 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;

(f) an explanation of the matters the Director must have regard to under subsection (3);

(g) any other matters prescribed by the Up-front Payments Guidelines.

Accepting an offer of a suitable replacement course

(5) If the Higher Education Tuition Protection Director arranges for the student to be offered a place in a suitable replacement course, the student may accept the offer.

(6) An acceptance must:

(a) be in writing; and

(b) be given to the provider of the suitable replacement course within the period specified in subsection (7).

(7) For the purposes of subsection (6), the period is:

(a) the period of 30 days after the Higher Education Tuition Protection Director gives notice under subsection (4); or

(b) if the Director determines that exceptional circumstances apply:

(i) any shorter period determined in writing by the Director; or

(ii) any longer period (not exceeding 12 months) determined in writing by the Director, and agreed to by the student.

No suitable replacement course available

(8) If paragraph (2)(b) applies, the Higher Education Tuition Protection Director must give a written notice to the student that includes the following:

(a) an explanation of the matters the Director must have regard to under subsection (3);

(b) an explanation of the student's right to request reconsideration, under section 187D, of the Director's decision within 28 days after the day on which the student is given the notice;

(c) a statement that, to facilitate early refunds, the student may, at any time during the 28 days, give the Director notice in writing that the student will not seek reconsideration of the decision;

(d) a statement that, if the student does not apply for reconsideration, an amount equal to the amount the provider was liable to pay to the student under subsection 62F(8) will be paid to the student.

Elections for FEE-HELP or HECS-HELP must be consistent

(9) Despite paragraph (4)(a), if the student was entitled to FEE-HELP assistance or HECS-HELP assistance for any affected units of the original course, any elections made under that paragraph in relation to those units must be consistent with any elections made under paragraph 166-26B(4)(a) of the Higher Education Support Act 2003 in relation to those units.

Example: A student who is entitled to FEE-HELP assistance or HECS-HELP assistance for an affected unit of an original course also makes an up-front payment for the same affected unit. The student elects, under subparagraph 166-26B(4)(a)(iii) of the Higher Education Support Act 2003, to have an amount re-credited to the student's HELP balance. The student must elect to receive a refund of the up-front payment under subparagraph (4)(a)(iii) of this section in relation to the affected unit.

(10) The Up-front Payments Guidelines may prescribe circumstances in which elections are considered to be consistent or inconsistent for the purposes of subsection (9).

62K When payments must be made from the Higher Education Tuition Protection Fund

(1) If a domestic student accepts an offer of a replacement course in accordance with subsections 62J(5), (6) and (7), the Higher Education Tuition Protection Director must pay to the provider of the replacement course an amount equal to the amount the defaulting provider was liable to pay to the student under subsection 62F(8).

(2) The Higher Education Tuition Protection Director must pay a domestic student an amount equal to the amount the defaulting provider was liable to pay to the student under subsection 62F(8) if:

(a) the provider has failed to discharge its obligations under section 62F to the student by the end of the provider obligation period; and

(b) either:

(i) the Director decides, under paragraph 62J(2)(b), that the Director is not satisfied that there is a suitable replacement course for the student; or

(ii) the student elects, under subparagraph 62J(4)(a)(iii), to have an amount equal to the amount the provider was liable to pay the student under subsection 62F(8) paid to them.

(3) Despite subsection (2), the Higher Education Tuition Protection Director is not required to pay an amount under that subsection if:

(a) the Director becomes aware of the circumstances referred to in paragraph (2)(a) more than 12 months after the day the provider defaulted in relation to the student; or

(b) the Director becomes aware of the circumstances referred to in subparagraph (2)(b)(ii) more than 12 months after the day the Director gives notice to the student under subsection 62J(4).

(4) Despite subsection (1), the Higher Education Tuition Protection Director may pay a greater amount than the amount required to be paid under that subsection to the provider of the replacement course if the Director considers that to do so:

(a) would best protect the interests of the student; and

(b) would not jeopardise the sustainability of the Higher Education Tuition Protection Fund.

(5) Despite subsection (1), if:

(a) the Higher Education Tuition Protection Director is required under that subsection to pay an amount to the provider of the replacement course; and

(b) the amount required to be paid is more than the cost of the replacement course;

the Higher Education Tuition Protection Director must pay the difference to the student.

(6) A payment under this section must be made in accordance with any requirements prescribed by the Up-front Payments Guidelines.

62L Consequences of payments being made from the Higher Education Tuition Protection Fund

Cessation of claim

(1) If:

(a) a registered higher education provider defaults in relation to a domestic student; and

(b) the Higher Education Tuition Protection Director pays an amount in accordance with section 62K in relation to the student;

the student ceases to have any claim against the provider in respect of the up-front payments made for the affected unit.

Provider must pay back Higher Education Tuition Protection Director

(2) Instead, the provider must pay the Higher Education Tuition Protection Director an amount equal to the amount that the Higher Education Tuition Protection Director paid in relation to the student under section 62K.

(3) The Higher Education Tuition Protection Director may, on behalf of the Commonwealth, recover that amount from the provider as a debt due to the Commonwealth by action in a court of competent jurisdiction.

Higher Education Tuition Protection Director may enforce security

(4) If the provider had granted the Higher Education Tuition Protection Director a charge or other security over any of its assets, the Director may enforce the charge or security in satisfaction, or partial satisfaction, of the debt.

62M Notification obligations for payments made from the Higher Education Tuition Protection Fund

(1) This section applies if:

(a) a registered higher education provider defaults in relation to a domestic student; and

(b) the Higher Education Tuition Protection Director makes a payment to the registered higher education provider who provides the replacement course, or to the student, under section 62K.

(2) The Higher Education Tuition Protection Director must give a written notice to the defaulting provider stating the amounts of any such payments.

Subdivision C - Obligations on replacement providers

62N Obligations of providers to provide information about replacement courses

(1) The Higher Education Tuition Protection Director may, by written notice, require a registered higher education provider to provide such information that the Director reasonably requires to enable the Director to make a decision under subsection 62J(2) regarding suitable replacement courses for a domestic student in relation to whom a provider has defaulted.

(2) The information must be provided:

(a) in a form (if any) approved by the Higher Education Tuition Protection Director for the information; and

(b) in accordance with such other requirements as the Director makes.

Civil penalty

(3) A registered higher education provider is liable to a civil penalty if:

(a) the provider is given a notice under subsection (1); and

(b) the provider fails to comply with the notice.

Civil penalty: 60 penalty units.

Offence

(4) A registered higher education provider commits an offence of strict liability if:

(a) the provider is given a notice under subsection (1); and

(b) the provider fails to comply with the notice.

Penalty: 60 penalty units.

62P Obligations of replacement providers

(1) This section applies if a domestic student accepts an offer of a place in a replacement unit or replacement course as referred to in paragraph 62F(3)(a) or subsection 62J(5).

(2) The registered higher education provider who provides the replacement course or replacement unit must give written notice of the acceptance to the Higher Education Tuition Protection Director within 14 days of the acceptance.

(3) The registered higher education provider who provides the replacement unit or replacement course must ensure that the student:

(a) for a replacement course - is granted creditsfor units of studyof the original course successfully completed by the student; and

(b) if the student has paid tuition fees for an affected unit of the original course - is not charged tuition fees for the replacement unit or the replacement unit of the replacement course; and

Civil penalty

(4) A registered higher education provider is liable to a civil penalty if the provider contravenes this section.

Civil penalty: 60 penalty units.

Offence

(5) A registered higher education provider commits an offence of strict liability if the provider contravenes this section.

Penalty: 60 penalty units.

62Q Obligations of replacement providers regarding enrolment information

(1) A registered higher education provider who provides a replacement unit or replacement course to a domestic student must keep up to date records of the following in relation to the student:

(a) the student's full name and contact details;

(b) the name of the replacement unit or the replacement course (and units of study) that the student is currently enrolled in;

(c) any tuition fees paid (or incurred) by the student for the replacement unit or for any units of study of the replacement course;

(d) any payments made by the Director under section 62K to the provider in relation to the replacement course;

(e) details of the replacement unit or units of study of the replacement course successfully completed by the student;

(f) details of the credits granted to the student for the replacement unit or for the units of study of the original course successfully completed by the student.

Civil penalty

(2) A registered higher education provider is liable to a civil penalty if the provider contravenes this section.

Civil penalty: 60 penalty units.

Offence

(3) A registered higher education provider commits an offence of strict liability if the provider contravenes this section.

Penalty: 60 penalty units.

Subdivision D - Miscellaneous

62R Arrangements for payments between providers

(1) If a registered higher education provider (the original provider ) for a unit of study or an Australian course of study enters into an arrangement with one or more other registered higher education providers to provide the unit or course jointly to one or more domestic students, the arrangement must:

(a) be such that the students pay their tuition fees directly to the original provider; or

(b) both:

(i) be in writing; and

(ii) provide for the receipt and disbursement of any tuition fees paid by students directly to any of the other providers.

(2) However, for the purpose of determining the original provider's obligations under the tuition protection requirements, any tuition fees paid by students directly to any of the other providers are taken to have been paid directly to the original provider.

Civil penalty

(3) A registered higher education provider is liable to a civil penalty if the provider contravenes subsection (1).

Civil penalty: 60 penalty units.

Offence

(4) A registered higher education provider commits an offence of strict liability if the provider contravenes subsection (1).

Penalty: 60 penalty units.

62S Other tuition protection information must be provided

(1) This section applies to a registered higher education provider if:

(a) the Higher Education Tuition Protection Director believes on reasonable grounds that the provider has information relevant to the Director's functions under this Act; and

(b) the Director, by written notice given to the provider, requests the provider to give the Director the information:

(i) within the period (not shorter than 14 days after the notice is given) specified in the notice; and

(ii) in the manner specified in the notice.

(2) The provider must comply with the notice within the period specified in the notice.

Civil penalty

(3) A registered higher education provider is liable to a civil penalty if the provider contravenes subsection (2).

Civil penalty: 60 penalty units.

Offence

(4) A registered higher education provider commits an offence of strict liability if the provider contravenes subsection (2).

Penalty: 60 penalty units.

62T Right to refund may be cancelled etc. without compensation

A right to be paid an amount under section 62K is granted on the basis that:

(a) the right may be cancelled, revoked, terminated or varied by or under later legislation; and

(b) no compensation is payable if the right is so cancelled, revoked, terminated or varied.

62U Continuing application of Part to certain persons

(1) This Part continues to apply in relation to a person that was a registered higher education provider as if the person were still a registered higher education provider.

(2) Subsection (1) applies for the purposes of dealing with or resolving any matter that arose during, or that relates to, the period when the person was a registered higher education provider.

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