Chapter 2Key issues
2.1This chapter explores the extent of support for the Universities Accord (Student Support and other Measures) Bill 2024 (bill) and examines some of the key issues raised by submitters during the inquiry.
General views on the bill
2.2There was broad support for key elements of the bill, including the creation of Commonwealth Prac Payments (CPP), capping Higher Education Loan Program (HELP) indexation, delivering free university pathway courses, and changing the distribution of Student Services and Amenities Fees (SSAF).
2.3For example, the University of Adelaide and University of South Australia (UoA & UoSA) described the bill as 'an important first step' in implementing the Universities Accord Final Report recommendations and broadly welcomed the changes:
The University of Adelaide (UoA) and University of South Australia (UniSA) broadly welcome the Australian Government's proposed initiatives and changes outlined in the legislation, noting that in tandem with the establishment of the Australian Tertiary Education Commission and thorough further consultation with the sector, they will offer some significant opportunities.
2.4More specifically, multiple participants, including UoA & UoSA, Charles Sturt University, and Innovative Research Universities (IRU) also strongly supported particular measures, including capping of the HELP indexation rate and the creation of Fee-Free Uni Ready courses.
2.5Further, the Department of Education and the Department of Employment and Workplace Relations (the departments) pointed out that the proposed amendments to the HELP indexation rate will 'benefit around 3.2 million individuals with a student debt':
The bill will ensure that student debt does not increase faster than wage growth in the future, and an individual's ability to repay their loan while earning above the minimum repayment income threshold is not negatively impacted by inflation and other economic factors.
2.6While supporting the bill in principle, some stakeholders raised concerns about the implementation of certain elements, particularly those they claimed could potentially place a significant administrative burden on universities.
2.7In addition, some argued that the bill does not adequately address underlying issues created by the Liberals and Nationals' Job-ready Graduates package, and that the details around some proposals require further clarification and consultation. For example, IRU requested further details regarding the CPP scheme, noting that there was 'insufficient detail in the bill for universities to properly understand their administrative obligations — such as means testing of students, data governance, privacy issues and the streamlining of reporting requirements'.
2.8There were also calls to extend the CPP scheme to other student groups who have mandatory placement requirements, particularly in allied health services, and other practice-based professions such as veterinary science.
2.9However, while agreeing that the CPP scheme could be improved, the Australian Services Union (ASU) described it as 'a great starting point' and noted that its introduction was an 'international first' that had attracted significant global interest:
… I will just also say, though, that I do think that having such a policy announced on prac payments is significant. We've been contacted from social work schools in the UK, the US, Canada and Europe, all saying: 'Wow! It's amazing Australia is moving in this direction'.
Comments on specific aspects of the bill
2.10While stakeholder feedback addressed various aspects of the bill, most of the commentary centred on the following proposed amendments:
changing HELP indexation;
FEE-FREE Uni Ready courses;
the new CPP scheme; and
the SSAF changes.
Changing HELP indexation
2.11Submitters expressed broad support for capping the indexation of HELP and other income contingent loans. For example, Charles Darwin University (CDU) argued that the 'proposed modernisation is crucial in reducing the financial burden of repayment, particularly for low-income earners, women, and those at the beginning of their careers':
For CDU students, many of whom face unique challenges due to their geographical and socio-economic circumstances, these changes represent a significant step toward achieving greater equity in higher education and ensuring that financial barriers do not hinder their academic and professional aspirations.
2.12However, some participants argued that further work was required to address the broader issue of student debt, including the unwinding of the Liberals and Nationals' Job-Ready Graduate package and addressing its impact on the cost of degrees.
2.13Western Sydney University (WSU), for example, noted that many students 'who can no longer afford an arts degree do not undertake alternative degrees' and that the 'cost of Arts degrees do not reflect future earning power and ignore the important contribution that these graduates make to our economy and society'.
2.14In relation to the independent sector, Independent Higher Education Australia (IHEA) urged the government to address the inequity imposed on independent undergraduate higher education students by removing the loan fee on FEE−HELP recipients:
While the proposed amendment will reduce the indexation rate of HELP debts, it does not address the fundamental inequity that FEE−HELP students face. For students at independent providers, not only are their HELP debts indexed, but the 20 per cent levy is also indexed, which creates an unacceptable burden for these students to carry.
2.15The departments noted that the proposed amendments would be 'backdated to remedy the effects of the spike in the HELP indexation rate in 2023 and 2024' and would apply 'to all Commonwealth income contingent loans including HELP, VET Student Loans, Australian Apprenticeship Support Loans and other student support loan accounts that existed on 1 June 2023 or 1 June 2024'.
FEE-FREE Uni Ready courses
2.16Many participants were generally supportive of the expansion of enabling programs through new funding for Fee-Free Uni Ready (FFUR) courses. Forexample, The University of Melbourne submitted that:
Enrolments in these courses must grow rapidly to enhance preparedness, foster aspiration, and create pathways into higher education, particularly for students from underrepresented backgrounds. This will be essential for meeting the Accord's tertiary attainment target of 80% of working age people by 2050.
2.17Similarly, CDU strongly supported the introduction of FFUR courses as a pathway to higher education for students from underrepresented backgrounds. CDU noted that:
Offering fee-free preparatory courses lowers barriers to entry for students from diverse and disadvantaged backgrounds, including those in remote and regional areas. Furthermore, the success of these courses depends heavily on their design and delivery, which must be tailored to meet the needs of a diverse student population, many of whom may be studying remotely or balancing their studies with work and family commitments.
2.18The departments outlined that the proposed increased funding rate for FFUR courses in 2025 would 'act as an incentive for more universities to offer FFUR courses, especially given that funding cluster 1 comprises the largest delivery proportion (40 per cent) of these places'. They also argued that:
It will also provide consistency in funding arrangements and bring funding closer to the cost of delivery. As more students from target groups enter the higher education system, FFUR courses will need to adapt to an expanded cohort, including more students who are less prepared for higher education.
2.19Ms Madonna Morton of the Department of Education also highlighted the importance of the role that the new FFUR would play in 'counteract[ing]any variation or disincentives created through the Job-ready Graduates student contribution amounts by providing one flat fee to support students from underrepresented groups participating in enabling pathways to either enter VET or university'.
2.20However, some providers called for a review of the guidance around the purpose, content and assessment requirements underpinning the design of FFUR courses. For instance, the University of Wollongong (UoW) argued that the 'requirements should articulate with the Australian Qualifications Framework (AQF) so that the role of these courses as pathways can be most effective'. UoW argued that:
Clear and consistent requirements will support consistency and quality across the sector, encouraging greater collaboration between universities and ensuring a smoother transition for students into higher education. Consistency will also enable portability across institutions which maximises flexibility and utility for students.
2.21Similarly, Edith Cowan University argued that further changes to HESA would be required to 'address other matters, such as the structure, delivery, and eligibility requirements of the [FFUR] courses, and the possible inclusion of these courses in the [AQF]'. ECU recommended that this measure 'be deferred so that consultation with higher education providers can inform the development of a comprehensive bill with all legislative requirements necessary for the success of the [FFUR] courses program'.
2.22IHEA also argued for CSP eligibility to be expanded to all registered higher education providers in order to 'increase contestability for students in national priority spaces and open student choice to select the provider they deem most able to meet their educational and career needs'.
2.23In response, the departments noted that while 'additional funding for FFUR courses would be made available for Table A providers only… mechanisms to enable delivery of FFUR courses by non-Table A providers for 2026 and beyond are being progressed and discussed with the FFUR Working Group'.
2.24The departments also highlighted the establishment of the FFUR Working Group, which 'brings together representatives from across the higher education sector, subject matter experts and government officials' and will meet regularly until mid-2025 to assist with implementation of this measure.
Commonwealth Prac Payments
2.25Most submitters supported the establishment of a CPP grant for eligible domestic students undertaking mandatory placements in identified priority areas. For example, the Australian Catholic University noted:
As the largest educator of teachers and nurses in Australia, ACU is greatly supportive of this measure, which will help students in these fields of study complete their degrees and reduce the bottleneck in the supply of higher education graduates in these critical fields of workforce shortage. ACU has long advocated for the Commonwealth to support students undertaking mandatory practicum placements.
2.26Similarly, the Social Work Policy and Advocacy Action Group at RMIT University welcomed the changes as a 'long overdue, step to address student poverty, inclusive education and workforce shortages'. They noted that 'the lack of financial support from governments for placements significantly disadvantages and discourages people from taking up professions that make a meaningful contribution to society, including social work'.
2.27Further, the University of Sydney strongly supported the intent of CPP:
These amendments seek to establish the legislative framework by which the Commonwealth will, for the first time, provide targeted financial support to higher education students undertaking mandatory placements in courses leading to registration as nurses, midwives, teachers and social workers. This initiative is very welcome as a first step towards addressing the issue of 'student placement poverty'.
2.28However, some universities expressed concern regarding the potential administrative and operational challenges associated with universities taking responsibility for implementing the proposed payments. For example, the UoW noted that:
The administration of these payments will require substantial additional staffing, systems infrastructure and overhead costs. This concern is compounded by other significant reforms scheduled for 2025, such as the introduction of fee-free places and international student caps. Furthermore, universities currently do not collect financial data from students, raising questions about how means testing will be effectively applied. We recommend that means testing, and administration of payments be handled by Commonwealth services such as Centrelink, leveraging existing data-sharing arrangements through the Tertiary Collection of Student Information.
2.29In a similar vein, the Australian Technology Network of Universities (ATN) indicated that 'ATN member universities have expressed concerns around the implementation of the CPP'. ATN Universities argued:
The main concern relates to the proposal for universities to means-test the payment. If not undertaken consistently across the sector, it could lead to disparity in experience and opportunity, directly impacting students. Further, requesting financial information from students could be intrusive and impact their dignity. Finally, means testing students is not core business for universities; adds an administrative burden; and may be difficult to verify.
The second concern is around efficiency. Many students will have already demonstrated their financial resources through claims to Services Australia for Youth Allowance. Universities will have to develop the necessary capabilities to administer the payments, and potentially duplicate systems already set up in Services Australia.
2.30Consequently, there were calls from several participants for the bill to be amended to require means-testing assessments and payments to students to be made by an appropriate government agency, such as Services Australia or the relevant portfolio department.
2.31However, these views were not shared by all participants. For example, Mr Angus McFarland of the ASU told the committee that many students would prefer to deal with universities rather than Services Australia:
I want to give the committee a bit of a counterview which is that what I'm told is that a lot of our members have more faith and confidence in navigating the university support system than Services Australia, that the university is closer to them and has a closer relationship with them than Services Australia does, that often some of the students might already be receiving other forms of support from the university.
2.32This view was echoed by Ms Bogemann of the National Union of Students, who stated that administration by universities would be more effective, particularly as the they 'already have the same personal details, if not more personal details than Services Australia or Centrelink will have, on the vast majority of students':
I want to echo what has already been said and emphasise that Centrelink and Services Australia really are a bureaucratic nightmare for students, much as they are for the vast majority of Australians. Cutting out the middleman here and having students apply directly through their universities is the simplest way to make sure this payment will be effective.
2.33Similarly, the departments argued that higher education providers were best placed to administer the payments given they already hold information on students, their enrolment and practicum arrangements. The departments also stressed that this arrangement kept 'the CPP tightly connected to study', which:
… maintains the relationship between the university and the student undertaking the practicum (which is part of teaching and learning). This ensures higher education providers remain responsible for providing a quality practicum experience, including managing changes to practicum arrangements. Accordingly, higher education providers are best placed to deliver the payments given the existing teaching and learning relationship with students and the organisation offering the practicum.
2.34The Department of Education also noted that higher education providers would receive a five per cent loading to administer the payments, on top of the amount they would be provided to deliver the payments to students.
2.35Further, the Department of Education reflected that views were mixed in relation to whether administering the CPP would be complex and indicated it would be consulting the sector and using evaluation mechanisms to monitor implementation:
Any large-scale program has review evaluation mechanisms that we will use. We will be reflecting on that with the sector. If it does turn out that there are things that we can learn, in terms of the administration of the payment, we're very open to that, and we will have consultation mechanisms in place with the sector to work with them on how it's feeling.
I would note that there were a range of perspectives from people appearing this morning as to whether it is complex or whether it's not. That will vary according to the cohort of students. It will vary according to how a university is established and set up. There are market providers who provide a range of solutions as well. I think it will be variable, but we are certainly very open to seeing any good, strong lessons learnt, to ensure that the money is reaching the people that it needs to. It's simple for them, and it's not overly administratively burdensome for the universities.
2.36In addition to concerns about administration of the CPP, several participants called for its expansion to include the full range of equity group students who have mandatory placement requirements as part of their course of study. For example, the ASU argued that CPPs:
… should be expanded to include these identified equity groups, especially as they experience multiple forms of disadvantage already and exclusion will only exacerbate their financial hardship. Government must consult with key stakeholders, including unions, student groups, higher education providers and peak sectoral bodies to identify and adjust any eligibility issues that would exacerbate or not address current financial pressures being experienced by these students.
2.37Indeed, some professional bodies expressed disappointment that their disciplines have been excluded from the scheme. For example, the Pharmaceutical Society of Australia (PSA) argued:
… PSA is deeply concerned that students studying pharmacy are among thousands excluded from eligibility for the Government’s support arrangements despite Australian Universities Accord recommending that there should be financial support for work placements. This may negatively impact on the ability of some pharmacy students to complete their studies in a timely and affordable manner.
2.38Occupational Therapy Australia (OTA) strongly supported the ‘inclusion of occupational therapy students in the [CPP] scheme design to take an equitable policy approach across the allied health care sector and reduce a significant financial barrier to entry to the occupational therapy workforce and increase supply of clinicians available to work in this critical allied heath profession’.
2.39However, the departments noted that the Department of Education would also continue working with tertiary education providers, governments, industry, business and unions to 'consider financial support for those experiencing placement poverty caused by mandatory unpaid placements in other courses'.
2.40In relation to concerns about the administration and management of the CPP, the departments observed that:
Making payments to students via higher education providers keeps the CPP tightly connected to study. Higher education providers hold information on the student, their enrolment and the practicum placement arrangements, so it maintains the relationship between the university and the student undertaking the practicum (which is part of teaching and learning). This ensures higher education providers remain responsible for providing a quality practicum experience, including managing changes to practicum arrangements. Accordingly, higher education providers are best placed to deliver the payments given the existing teaching and learning relationship with students and the organisation offering the practicum.
2.41In addition, the departments indicated that the Department of Education would 'work with the higher education sector to introduce this new assistance payment, to be delivered through eligible providers' and that 'key program parameters, including eligibility and delivery mechanisms, for higher education students will be outlined in the Other Grants Guidelines, which are currently being developed'.
Proposed SSAF changes
2.42Many stakeholders were broadly supportive of the proposed allocation of a minimum of 40 per cent of their SSAF revenue to student-led organisations, which responds to Recommendation 19 of the Final Accord Report in relation to guaranteeing a set proportion of SSAF revenue for these organisations.
2.43For example, Navitas (trading as ACAP) supported the changes:
At ACAP, and our Navitas stablemate SAE University College, we implemented the SSAF in 2024 and would support legislation that requires at least 40% of the SSAF to be allocated to student-led organisations. We have already begun discussions about how we could most effectively implement this, and we fully support any such initiative that provides more opportunity for students to have a voice in the decision making about the delivery of their education.
2.44Likewise, the UNSW Sydney the proposed distribution to student-led organisations to deliver student services and amenities and pointed out:
UNSW is proud of Arc@UNSW (Arc), the student organisation of UNSW. Arc was formed in 2006 as a not-for-profit organisation for students studying at UNSW and is run by students, for students. Arc's mission is to create the best student experience through Clubs, Sport, Volunteering, Events, Wellness, Help and more. This also includes orientation, welfare and legal aid for students.
2.45Further, Ms Bogemann talked about the importance of the change to ensuring student-led organisations can meet demand for student services:
At the University of Melbourne, where I attend, for example, the University of Melbourne Student Union provides free breakfast. They run a food bank. Week after week, these services are overrun with lines out the door. The introduction of a minimum SSAF will mean that student unions, and particularly regional student unions, will have some degree of equity in terms of funding so that they can provide the services that students so desperately need.
2.46Some submitters argued for increased flexibility to better manage the governance and service provision issues around the obligation to provide 40 per cent to student-led organisations. For example, the University of Tasmania noted:
In implementing the minimum SSAF allocation requirement, we strongly recommend the transition period is utilised for universities and student led organisations to work together on planning to ensure the appropriate financial and governance functions are established and there is no disruption or loss of services for students because of this change.
2.47In addition, CSU indicated that it could not support the SSAF changes without further amendments and argued that the model 'may not be workable for regional and/or multi-campus institutions, or those with a high proportion of part-time or online students'.
2.48CDU also pointed out that in comparison to bigger institutions, CDU did 'not have an active Student Union or independent body currently capable of managing 40 per cent of SSAF funds'. CDU argued that:
The proposed amendments do not adequately consider the varying maturity levels of student-led organisations across institutions. At CDU, the Student Council lacks the infrastructure to manage such significant funds independently, risking a reduction in the quality and availability of essential services for our geographically dispersed students.
2.49Universities Australia recommended that changes to how the SSAF is used be deferred until the proposal has been further developed in consultation with the sector because of substantial concerns raised by UA's members.
2.50However, it was acknowledged in the public hearing that the 40 per cent requirement was not without precedent—being similar to the long-established practice in Western Australia (WA), where 50 per cent of student services and amenities fees are paid to student organisations. For example, Mr Luke Sheehy of UA spoke about the experience of its WA members:
… my members from Western Australia have noted that the requirements under their state arrangements are 50 per cent. It's a long-established practice in those universities that balances both the interests of students and student representation and, obviously, governance relating to the administration of that money.
2.51In addition, the departments also highlighted that assessment of public data showed that of the 29 providers with verified data in 2023, 15 already allocated over 40 per cent to student-led organisations, six allocated between 21–40 per cent, and eight allocated between 0–20 per cent.
2.52The departments also pointed to the ability for providers to seek approval to enter into transition arrangements if the measure 'would create challenges or issues that need resolution during a transition period'. Transition periods of up to three years would be available for Table A providers, with transition periods of up to five years available for non-Table A providers.
2.53Further, the departments stated that the 'SSARA Guidelines would provide more detailed information on the new requirements and would outline the governance requirements for student-led organisations'.
Committee view
2.54This bill represents the first stage of the government's implementation of the Universities Accord and will legislate the reforms announced in the 2024–25 Budget.
2.55It will reduce around $3 billion of HELP debt for more than three million Australians. And it massively expands fee-free university ready courses—the courses that act as a bridge between school and university, and help ensure that more Australians have the option to attend university and succeed when they get there.
2.56Expanded access to higher education has the ability to change lives, especially for those from a low SES background.
2.57For the first time there will be Commonwealth government financial support for teaching students, for nursing students, for midwifery students and for social work students, to help support them while they do the practical part of their degree. These Prac Payments will help them manage the costs associated with crucial parts of their higher education courses.
2.58These initiatives were warmly welcomed by submitters, and those they represent. For example, the Australian Catholic University are 'greatly supportive' of the measure, particularly positive impact it will have on student teachers and nurses. RMIT University also welcomed the changes, and the focus on areas such as social work that are experiencing workforce shortages.
2.59While some universities were unhappy about having to distribute Prac Payments to their own students, the committee is assured that the five per cent loading to administer the payments, on top of the amount they would be provided to deliver the payments to students, is sufficient to cover any costs and burdens on the institutions.
2.60In relation to the SSAF amendments, the three-year transition period will allow providers to adapt to the new requirements in a manageable timeframe. This will allow providers to manage the complexities involved in overseeing student-led organisations, while also ensuring compliance with a broad range of state and Commonwealth obligations and responsible financial administration.
2.61In terms of the proposal to distribute 40 per cent of SSAF fees to student organisations, the committee acknowledges some universities have sought to retain this funding for themselves, however the committee also heard that institutions in WA have been distributing 50 per cent of its student amenities fees to student organisations for a very long time, without issue.
2.62In the broader policy context, the committee notes that the government has responded to 29 of the 47 Accord Final Report's recommendations and that it will continue to implement further recommendations following the first stage of legislative changes. The committee supports the establishment of an Implementation Advisory Group that will enable further consultation and engagement for the remaining reforms.
2.63While the committee recognises that the bill does not address every concern, or each recommendation of the Universities Accord, it is a significant first step, and as such, the committee recommends that the bill be passed.
2.64The committee recommends that the bill be passed.
Senator Tony Sheldon
Chair