Bills Digest no. 32 2009–10
Higher Education Support Amendment (VET FEE-HELP and
Tertiary Admission Centres) Bill 2009
WARNING:
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
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Main provisions
Contact officer & copyright details
Passage history
Higher Education Support Amendment (VET
FEE-HELP and Tertiary Admission Centres) Bill 2009
Date introduced: 9 September 2009
House: House of
Representatives
Portfolio: Education
Commencement: The day after Royal Assent
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The Bill amends the Higher
Education Support Act 2003 (the Act) to:
- broaden the application of the Higher Education Loan Program
(HELP) category for Vocational Education and Training students
called VET FEE-HELP, and
- provide that officers of Tertiary Admission Centres (TACs) have
the same status and duty of care as those of higher education
providers in relation to processing student information.
The amendments provided for in this Bill were previously part of
the Higher Education Legislation Amendment (Student Services and
Amenities, and Other Measures) Bill 2009 (the original Bill) that
was first introduced into Parliament in February 2009. That Bill
was finally rejected by the Senate in August 2009, primarily due to
the controversial nature of the provisions relating to student
services and amenities. Those provisions are now in a separate
Bill, the Higher Education Legislation Amendment (Student Services
and Amenities) Bill 2009.
Income contingent loans (ICLs) for
students such as those that have been available in the higher
education sector for some time, were extended to the vocational
education and training (VET) sector in 2007 under the Higher
Education Support Amendment (Extending Fee-Help for VET Diploma,
Advanced Diploma, Graduate Diploma and Graduate Certificate
Courses) Act 2007. The VET FEE-HELP loans, as they are known,
were introduced by the Coalition Government as part of its agenda
to increase productivity, and address skills shortages. They were
introduced to assist students fund their own study as part of a
strategy to meet the increasing skills and training needs of a
growing economy. At a time when growth in government VET budgets
has been constrained, encouraging higher levels of private
investment has gained greater acceptance as a strategy for
achieving this.
The introduction of VET FEE-HELP was
justified on equity grounds. VET students were disadvantaged by
having to pay up-front fees and should have parity with their
higher education counterparts who did have access to ICLs; VET
providers could not compete with their higher education
counterparts were some of the equity arguments. Access to VET
FEE-HELP was therefore made available for, and is still limited to
those courses that are provided by both the university and the VET
sectors Diploma, Advanced Diploma, Graduate Diploma, and Graduate
Certificate courses. Modelled as an extension to the Higher
Education Loan Program (HELP) that exists for full-fee paying
higher education students, VET FEE-HELP was, on introduction, also
limited to full-fee VET courses. Other conditions on accessing
these loans included that the provider had to be a corporate body
and that arrangements needed to be put in place between the
approved VET provider and a higher education provider to credit the
qualification towards a higher education award.[1] The credit transfer arrangements
reinforced this policy s connection with higher education
qualifications. Not only did it treat the courses common to both
sectors alike, but the credit transfer arrangements also
facilitated pathways to the higher level qualifications that are
believed to be in demand in the Australian labour force.
The amendments provided for in this Bill enable access to VET
FEE-HELP to be broadened, essentially by reducing the level of
legislative prescription on eligibility and allowing more
flexibility through the use of the VET FEE-HELP Guidelines.
Specifically the amendments would relegate the details of matters
relating to the value of the loan debt, credit transfer
arrangements and the eligibility of courses and students to the VET
FEE-HELP Guidelines. As legislative instruments, the VET FEE-HELP
Guidelines do not command the same level of Parliamentary scrutiny
as legislation, and can therefore be more flexibly adapted to cater
for changing policy parameters.[2]
Since the introduction of the original Bill the proposed scope
of access to VET FEE-HELP has become clearer with the release of
amendments to the VET FEE-HELP Guidelines. The amended
VET FEE-HELP Guidelines extend access to government subsidised
students, but only for Diploma and Advanced Diploma courses. Access
is also limited to those courses provided by a VET Reform State or
Territory (as defined in the newly amended VET Provider
Guidelines).[3]
With these amendments the Commonwealth is therefore able to meet
its commitment to Victoria to provide ICLs to eligible students,
studying Government-subsidised diploma and advanced diploma courses
in support of that state s package of VET reforms which commenced
on 1 July 2009.[4]
While the Commonwealth has offered similar support to any other
state/territory that pursues such market related VET reforms, the
financial impact statement in the Explanatory Memorandum is based
only on the estimated costs for Victoria. At this stage the
estimated fiscal impact is approximately $5 million in each of the
first two years. [5]
Through changes to the VET FEE-HELP Guidelines the Government is
expanding access to ICLs to government subsidised VET students, but
only to those doing Diploma and Advanced Diploma courses (it is not
clear why Graduate Diploma and Graduate Certificate courses have
not been included), and only to those courses provided by a VET
Reform State or Territory . At this stage only Victorian government
subsidised students will be eligible, as Victoria is the only
state/territory that would currently meet the definition of a VET
Reform State or Territory .
Competition in Victoria s VET market is also likely to be
enhanced by the amendments that will enable more flexibility around
the credit transfer arrangements that were a requirement of the
original VET FEE-HELP policy. For example, subject to the VET
FEE-HELP Guidelines, access could be provided to smaller private
providers who may not have credit transfer arrangements in place,
or who may provide niche courses for which there is no obvious
tertiary equivalent as the course has traditionally been covered by
VET .[6] While this relaxation of the
credit transfer requirements is likely to facilitate competition
between small and large, and public and private providers, it could
also have the effect of weakening the VET FEE-HELP policy s
connection to higher education courses and pathways. [7]
Critics of the introduction of income contingent loans into the
VET sector expressed their concerns that access to such loans would
lead to substantial fee increases in the VET sector, thereby
increasing the burden on individual VET students. They were
particularly concerned about students from disadvantaged sectors of
society who as government subsidised students currently pay
relatively low fees.[8] They therefore argued that rather than expanding
participation in VET, ICLs may act as a barrier to further training
and much needed skills development.[9] The expansion of ICLs to government subsidised
students in the context of Victoria s market based VET reforms,
that as anticipated have involved an increase in TAFE fees, has
reinforced these concerns.[10]
Given that the Commonwealth Government does not currently have a
role in determining VET fees, the question of VET fee levels may
also have occupied the Commonwealth Government in costing and
planning for the reach of its VET FEE-HELP policy. A paper
published by the Treasury that was influential in the introduction
of ICLs for VET had warned of possible risks to the Commonwealth
Government associated with fee increases by state and territory
authorities made possible by the introduction of ICLs:
The Commonwealth government has traditionally
not been directly involved in TAFE and it would need to be
satisfied that the risks associated with, for example, the level of
fees being raised, have been fully thought through.[11]
Supporters of income contingent loans for VET such as the
co-authors of the Treasury publication, viewed their introduction
into the VET sector as a matter of equity. They argued that VET
students, unlike their higher education counterparts, were
disadvantaged by having to pay up-front fees government subsidised
and full-fee students alike.[12] Although VET FEE-HELP was originally limited to
full-fee students, these advocates would have welcomed its
introduction and would presumably also welcome its current
expansion. However, concerns about equity of access are likely to
persist given that access to government subsidised students is
being extended selectively, only to Victoria currently the only VET
Reform State or Territory . Furthermore, while full-fee Graduate
Diploma, and Graduate Certificate students can have access to VET
FEE-HELP, government subsidised students doing such courses have
not been included in the revised VET FEE-HELP Guidelines. Any
change in policy to include them could readily be addressed by
amending the VET FEE-HELP Guidelines. The total fiscal impact of
doing this would of course be increased.
Despite changes to the VET FEE-HELP
policy parameters that have to a degree relaxed its original
association with higher education pathways in VET Reform States or
Territories , there is no indication that the Government has any
plans to expand access to other qualifications. The possibility
that there may be an interest in doing this in the future can not
be ruled out as the authors of the Treasury paper noted that the
economic basis for ICLs, that is the extent of private rates of
return to investment in VET, applies to Certificate level III/IV
courses as well.[13] However, if the policy parameters were to be expanded
to include access for courses other than at the Diploma, Advanced
Diploma, Graduate Diploma, and Graduate Certificate levels, the
legislation would need to be amended to effect such a change.
Schedule 1 amends the Act and deals with the broadening of
access to VET FEE-HELP.
Item
1 would allow for the VET FEE-HELP Guidelines to specify
the conditions under which a less than 120 per cent debt is
incurred by a VET FEE-HELP loan. Currently the loan debt is 120 per
cent, of which 20 per cent is a loan fee. Item 2
allows for this amendment to be applied to units of study with a
census date on or after 1 July 2009. Owing to the delay in the
passing of the earlier Bill it now provides for the loan debt
measure to be applied retrospectively to debts incurred before, on
or after the commencement of the amendment.[14]
Items
3-7 in the Bill would effectively relax the credit
transfer provisions. Item 3 removes the credit
transfer conditions from the Minister s requirements to approve a
body corporate as a VET provider. These requirements will then be
dealt with through the VET FEE-HELP Guidelines.
The credit
transfer arrangements for courses are also being relaxed. Currently
under paragraph 45(1)(a) the course requirements for VET
FEE‑HELP assistance for a VET unit of study include that the
unit is being undertaken as part of a VET course of study that
meets any requirements set out in the VET FEE‑HELP Guidelines
relating to VET credit transfer arrangements . Item
5 removes the reference to credit transfer in paragraph
45(1)(a). Item 6 then inserts a new section 45(1A)
which would allow with respect to the arrangements for courses
provided under the amended paragraph 45(1)(a), which are no longer
limited by credit transfer arrangements, that the VET FEE-HELP
guidelines can set out different requirements for different
students and requirements that may relate only to some students
taking a particular unit of study.
Schedule 3 amends the Act and deals with Tertiary Admission
Centres (TACs)
Schedule 3 provides that officers of Tertiary
Admission Centres (TACs) have the same status and duty of care as
those of higher education providers in relation to processing
students personal information. According to the Department of
Education, Employment and Workplace Relations this will ensure that
student information may be shared between the Department, higher
education providers, VET providers, and TACs as appropriate and be
governed by the appropriate privacy safeguards. [15]
[11]. B Chapman, M Rodrigues and C Ryan, HECS for TAFE: the
case for extending income contingent loans to the vocational
education and training sector , Treasury working paper,
2007-2, Treasury, 2007, p. 41, viewed 20 February 2009,
http://www.treasury.gov.au/contentitem.asp?NavId=&ContentID=1252
Carol Kempner
15 September 2009
Bills Digest Service
Parliamentary Library
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