Chapter 1Introduction
Purpose of the bill
1.1The Universities Accord (Student Support and Other Measures) Bill 2024 (bill) seeks to amend the Higher Education Support Act 2003 (HESA) and four other acts. The bill responds primarily to the recommendations of the Australian Universities Accord Final Report (Accord Final Report) and would:
cap the Higher Education Loan Program (HELP) indexation rate to be the lower of either the Consumer Price Index (CPI) or the Wage Price Index (WPI), to be backdated to 1 June 2023;
require higher education providers to allocate a minimum of 40 per cent of their student services and amenities fees (SSAF) revenue to student-led organisations;
rename enabling courses FEE-FREE Uni Ready courses for students in Commonwealth supported places and establish a Commonwealth Grant Scheme (CGS) funding cluster for these courses;
facilitate the establishment of a Commonwealth Prac Payment (CPP) grant for eligible domestic students undertaking mandatory placements in identified priority areas; and
add Adelaide University to the list of Table A providers to reflect the merger of the University of Adelaide and the University of South Australia; and provide a power for the Minister to make transitional rules.
Background
1.2The bill responds to several recommendations in the Accord Final Report and fulfills commitments made in the lead-up to the 2024–25 Budget. In his second reading speech, the Minister noted that the bill is the first stage in the implementation of the Universities Accord (Accord) and would 'wipe around $3 billion in student debt for 3 million Australians nationwide—easing pressure on workers, apprentices, trainees and students across the country'.
Australian Universities Accord
1.3The Australian Government (government) established the Accord to reform Australia's higher education system so that it could drive nationwide skills and equity growth, and economic, social and environmental prosperity more generally. The Minister appointed an Australian University Accord Panel in November 2022 to undertake an extensive 12-month review of the higher education sector.
1.4The Accord Final Report was released on 25 February 2024 and made 47recommendations, which included the provision of government financial support for unpaid work placements, setting HELP indexation as the lower of the CPI and WPI, increasing the availability of fee-free preparatory course places, and ensuring that a proportion of the SSAF is directed to student-led organisations.
1.5The bill would give effect to the Accord Final Report's recommendations by:
providing greater opportunities for more people—particularly from underrepresented backgrounds—to participate in tertiary education by delivering FEE-FREE Uni Ready courses (Recommendation 12);
introducing a weekly CPP to support around 68 000 teaching, nursing (including midwifery) and social work students a year to complete their university placements (Recommendation 14);
capping indexation to ensure that outstanding loans never grow faster than average wages (Recommendation 16(d)); and
requiring higher education providers to ensure that 40 per cent of the SSAF revenue they collect from students is provided to student-led organisations (Recommendation 19).
Building a better higher education sector
1.6As part of the 2024–25 Budget, the government responded to 29 of the 47 Accord recommendations either in full or in part. This included a fairer HELP system, cost of living relief for students, support for people from the outer suburbs and regions to go to university, and structural reforms to Australia's tertiary education system.
1.7The bill complements other responses to the Accord recommendations, including the passage of the Higher Education Support Amendment (Response to the Australian Universities Accord Interim Report) Act 2023 and the introduction of the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024 and the Universities Accord (National Student Ombudsman) Bill 2024.
Merger of Adelaide University and the University of South Australia
1.8In 2018, the University of Adelaide and the University of South Australia announced they were exploring the possibility of a merger, and stalled efforts were revived in 2022. The merger was agreed in July 2023, with 'Adelaide University' formally registered with the Tertiary Education Quality and Standards Agency in May 2024. In July 2024, the new Adelaide University was formally launched ahead of its 2026 start date.
Overview of the bill
1.9The bill comprises six schedules and would amend the provisions of HESA, as well as make consequential amendments to the Australian Apprenticeship Support Loans Act 2014 (AASL Act), the Social Security Act 1991 (SSA), the Student Assistance Act 1973 (SA Act), and the VET Student Loans Act 2016 (VET SL).
HELP indexation
1.10The bill would amend HESA to provide that the calculation of a person's accumulated HELP and other income contingent loans to reflect changes in CPI and WPI, instead of just CPI. The measure would provide an indexation credit to a person's HELP accounts to ensure the new indexation cap had a date of effect from 1 June 2023. The proposed changes respond to the CPI rate of 7.1per cent that applied to student loans in 2023 and would wipe around $3billion in student debt for more than three million Australians.
1.11The proposed amendments would also change the reference period used to calculate the indexation factor from the March quarter to the previous December quarter to provide sufficient time for the Australian Taxation Office to calculate and apply the appropriate indexation rate on 1 June each year.
1.12In addition, consequential amendments would be made to the AASL Act, the SSA, the SA Act and the VET SL, so that the new methodology would also apply to VET Student Loans, Australian Apprenticeship Support Loans, Student Start-up Loans, ABSTUDY Student Startup Loans and Student Financial Supplement Scheme Loans.
SSAF changes
1.13The bill would require education providers to allocate a minimum of 40 per cent of their SSAF revenue to student-led organisations and provide transition arrangements to be agreed by the Secretary of the Department of Education (or their delegate). There would be no changes to how providers currently allocate, consult and report on the remaining 60 per cent of SSAF revenue.
FEE-FREE Uni Ready courses
1.14The bill would rename enabling courses as 'FEE-FREE Uni Ready' courses for students in Commonwealth supported places and establish a new CGS funding cluster. The new free courses would 'create enabling pathways which will help more students to gain the skills they need to get into university and succeed'.
1.15It would also replace the current mixed funding system for Commonwealth supported students in these courses, by providing consistent and sufficient funding through a new CGS funding cluster (at the equivalent amount of the CGS funding cluster 1, currently $18 278) to deliver high quality FEE−FREE Uni Ready courses.
1.16The government would provide $350 million in additional CGS funding over four years commencing on 1 January 2025, to fully fund these courses.
Commonwealth Prac Payments
1.17The bill would establish a CPP grant for eligible domestic students undertaking mandatory placements in identified priority areas, such as teaching, nursing and midwifery, and social work as part of their course of study.
1.18The proposed amendment would allow grants under Part 2−3 of HESA to be made for the purpose of assisting higher education providers to provide payments to students who are undertaking mandatory practicums as part of their course of study. The CPP grant would allow eligible degree students to access the payment during the periods that they undertake a placement, as part of their higher education courses in teaching, nursing and midwifery, and social work, as well as Diploma of Nursing students studying with eligible vocational education and training providers. The payment would also be means-tested.
1.19The Explanatory Memorandum (EM) notes that the proposed changes would 'support around 68 000 teaching, nursing (including midwifery) and social work students a year to complete their university placements'.
Adelaide University
1.20Following the merger between the University of South Australia and the University of Adelaide, the bill would add Adelaide University to the list of Table A providers in HESA and remove the former institutions.
Transitional rules
1.21The bill would enable the Minister to make transitional rules to address any transitional issues that need to be managed as a result of unforeseen consequences in relation to the Adelaide University merger and the application of HELP indexation changes.
Commencement
1.22Sections 1 to 3, Parts 1, 3 and 5 of Schedule 1, and Schedules 4 and 6 commence on Royal Assent. Parts 2 and 4 of Schedule 1 commence on 1 June 2025, while Schedules 2 and 3 commence on 1 January 2025 and Schedule 5 commences on the earlier of Proclamation, or 31 March 2026.
Financial implications
1.23The EM states that the cost of the changes to HELP indexation are estimated to be $239.7 million. The estimated cost of the FEE-FREE Ready courses measure will be $320 million over the forward estimates, while the cost of the CPP is estimated to be $369.19 million over the forward estimates. The other measures in the bill are expected to have a minimal cost.
Consideration by other parliamentary committees
1.24When examining a bill, the committee considers any relevant comments published by the Senate Standing Committee for the Scrutiny of Bills (theScrutiny Committee) and the Parliamentary Joint Committee on Human Rights (the Human Rights Committee).
1.25The Scrutiny Committee did not make any comment in relation to the bill.
1.26The Human Rights Committee did not make any comment on the bill. However, the statement of compatibility with human rights concluded that the bill is compatible with human rights because 'it promotes the right to education'.
Conduct of the committee's inquiry
1.27On 16 August 2024, the provisions of the bill were referred by the Senate to the committee for inquiry and report by 30 September 2024. On 19 August 2024, the Senate agreed to extend the committee's reporting date to 3 October 2024.
1.28The committee advertised the inquiry on its website and invited submissions by 5 September 2024. The committee received 54 submissions which are listed at Appendix 1 of this report. The public submissions are available on the committee's website.
1.29The committee held a public hearing in Sydney on 24 September 2024. A list of the witnesses who gave evidence at the hearing is included at Appendix 2.
Acknowledgement
1.30The committee thanks those individuals and organisations who contributed to this inquiry by preparing written submissions and giving evidence at the public hearing.