Bills Digest No. 134 2004–05
Higher Education Legislation Amendment
(2005 Measures No. 2)
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
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Contact Officer & Copyright Details
Education Legislation Amendment (2005 Measures No. 2) Bill
House: House of Representatives
Portfolio: Education, Science and
ss.1-3, Royal Assent.
Schedules 1-3 in accordance with the table in s.2 of the
The Bill makes a number of
technical revisions to the Higher Education Support Act
2003 (hereafter the Act) and related legislation.
The passage of the Act resulted in major changes to the
Commonwealth Government s funding system for higher
education.(1) The most notable of these were as
From 2005 Commonwealth operating grants for universities will be
based on a new funding formula based on student numbers and
discipline mix. Funds per student place will be increased by 2.5
per cent in 2005, 5.0 per cent in 2006 and 7.5 per cent in 2007.
These increases are conditional on institutions complying with the
Commonwealth's model for institutional governance ('National
Governance Protocols') and workplace relations policies. Around
25000 marginally funded places will be converted to fully funded
places in the three years to 2006 07.
From 2005, institutions in receipt of Commonwealth supported
places can determine their own student contribution level for each
course they offer within ranges set by the Commonwealth. Previously
there were three HECS bands, each with a fixed rate of student
contribution. From 2005 these fixed rates will be replaced by
ranges. The top of these ranges will be 25 per cent higher than the
projected level of HECS for each band for 2005 under the former
arrangements. The bottom of each range will be $0. Institutions are
able to set the student contribution at any point within these
ranges. In addition, a fourth band has been established called
National Priorities, which initially consists of education and
nursing courses. The range for this band will be from $0 to the
current level of HECS for Band 1 courses. The minimum repayment
threshold for HECS has been raised to $35 000 by removing the
two bottom repayment bands. This means that those with a HECS debt
will start paying 4 per cent of their income when they reach
$35 000, whereas in 2004 they paid 3 per cent when their
income reached $25 348.
Domestic students paying full fees for undergraduate courses now
have access to an income contingent loan scheme (FEE-HELP). Loans
are also available for students who wish to study overseas
(OS-HELP). There is also a scholarship scheme to assist low
socio-economic status and indigenous students with higher education
costs (the Commonwealth Education Costs Scholarship), and one to
assist students from rural and isolated areas who have to move in
order to study (the Commonwealth Accommodation Scholarship).
Much of the detail of policy implementation under the new
funding scheme is the subject of a series of Guidelines made by the
Minister, but subject to parliamentary disallowance (see s.238-10
of the Act). Accordingly, the Bill contains many provisions
extending or refining the role of these Guidelines in relation to
The Bill will not change the main policy thrust of the
Government s reforms in any way. According to the Explanatory
Memorandum, the provisions will have no financial impact.
Schedule 1 Part 1 contains amendments that will allow higher
education providers to change student contribution amounts and
tuition fees more than once per year. Such variations can only be
made in circumstances specified in the Guidelines or with the
written approval of the Minister.
- A detailed description of these changes can be obtained from
the DEST website at: http://www.backingaustraliasfuture.gov.au/
15 March 2005
Bills Digest Service
Information and Research Services
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© Commonwealth of Australia 2005
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Published by the Parliamentary Library, 2005.
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