Bills Digest No. 96, 2017–18
PDF version [3MB]
Dr Hazel Ferguson
Social Policy Section
26 March 2018
Contents
Purpose of the Bill
Background
Income contingent student loan
programs
Higher Education Loan Program
Figure 1: Total outstanding Higher
Education Loan Program debt, 2010–11 to 2015–16 ($m)
Figure 2: Higher Education Loan
Program total estimated outstanding debt, 2016–17 to 2020–21 ($m)
Figure 3: Higher Education Loan
Program proportion of debtors by size of debt, 2011–12 to 2015–16
Student Start-up Loans
Trade Support Loans
Student Financial Supplement Scheme
Figure 4: SFSS total estimated
outstanding debt, 2016–17 to 2020–21, at 2017–18 Budget ($m)
The sustainability of student loan
programs
Committee consideration
Senate Education and Employment
Legislation Committee
Senate Standing Committee for the
Scrutiny of Bills
Policy position of non-government
parties/independents
Position of major interest groups
The HELP minimum repayment threshold
The lifetime HELP borrowing limit
Other issues
Financial implications
Statement of Compatibility with Human
Rights
Parliamentary Joint Committee on
Human Rights
Key issues and provisions
Changes to repayment thresholds and
indexation
Changes to repayment thresholds and
rates under HESA
Changes to SFSS repayment thresholds
Table 2: 2017–18 repayment income
thresholds and rates for SFSS and proposed transitional arrangements for
2018–19
Changes to indexation under HESA
Changes to order of repayment of
debts
Introduction of a combined HELP loan
limit
Concluding comments
Appendix 1: Average Weekly Earnings
(AWOTE), HELP repayment rates and thresholds: 1988–89 to 2016–17
Date introduced: 14 February 2018
House: House of Representatives
Portfolio: Education and Training
Commencement: At various dates, as set out in the digest.
Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.
When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.
All hyperlinks in this Bills Digest are correct as at March 2018.
Purpose of
the Bill
The purpose of the Higher Education Support Legislation
Amendment (Student Loan Sustainability) Bill 2018 (the Bill) is to amend the Higher Education
Support Act 2003 (HESA), to:
- revise
the Higher Education Loan Program (HELP) repayment thresholds and rates,
including introducing a lower minimum repayment threshold of $45,000 per annum with
a repayment rate of one per cent
- introduce
a combined lifetime HELP loan limit, across all HELP loans for course fees, of
$150,000 for students studying medicine, dentistry and veterinary science
courses, or $104,440 for all other students that is indexed to the Consumer
Price Index (CPI) and
- change
the indexation factor for HELP repayment thresholds from Average Weekly
Earnings (AWE) to the CPI.[1]
The Bill also:
- proposes
to amend the Social
Security Act 1991, Student Assistance
Act 1973 and Trade
Support Loans Act 2014 to add Student Financial Supplement Scheme
(SFSS) debts to the repayment arrangements already in place for other
student loan programs, ensuring SFSS debts are no longer repaid concurrently
with HELP, Student Start-up Loan (SSL) and Trade Support Loan (TSL) debts, and
a single, shared set of repayment thresholds and rates are applied across the
four programs and
- proposes
consequential amendments to the VET Student Loans
Act 2016 to include Vocational Education and Training (VET) Student
Loans in the HELP loan limit.[2]
Background
Income
contingent student loan programs
Student loan programs have proliferated since their
introduction in the form of the Higher Education Contribution Scheme (HECS) in
1989, and are now administered in the Education and Training, Human Services, and
Social Services portfolios.
While these programs are all income contingent, meaning
they are repaid through the Australian Taxation Office (ATO) only when a
debtor’s income is more than the minimum repayment threshold, they are
distinguished by their purpose, repayment arrangements, and the fees, discounts
and caps applied under some programs. This section briefly sets out these key
features for each student loan program.
Higher
Education Loan Program
The largest of the student loan programs, HELP, in the
Education and Training portfolio, is comprised of four sub-schemes and VET
Student Loans, which replaced VET FEE-HELP from 1 January 2017.[3]
HELP debt is repaid first if debtors owe under multiple programs, and a four per
cent minimum repayment rate applies from the minimum repayment threshold of $55,874
in 2017–18 (see Table 1 below for the full list of current repayment thresholds
and rates).[4]
From 1 July 2018, a lower repayment rate of two per cent will apply at a new minimum
repayment threshold of $51,957.[5]
HECS-HELP, which replaced HECS in 2005, is available for
Commonwealth supported higher education students (typically domestic
undergraduate students studying at Australian public universities) to pay their
student contribution amounts—the part of the course fee not paid by the
Commonwealth.[6]
According to the Department of Education and Training (DET), ‘[i]n 2015 and
2016, 88 per cent of Commonwealth supported students deferred their
payment through HECS-HELP.[7]
FEE-HELP is available for domestic full fee-paying higher
education students to pay course fees up to a lifetime FEE-HELP borrowing limit
of $127,992 for medicine, dentistry and veterinary science students and $102,392
for other students.[8]
In 2016, 77,778 FEE-HELP loans were issued.[9]
A 25 per cent loan fee is added to the balance of the loan when FEE-HELP is
used for undergraduate study.[10]
In 2016, the equivalent of approximately 28,050 full-time students deferred tuition
costs through FEE-HELP for courses where the loan fee would apply.[11]
SA-HELP is available to students wishing to defer payment of
the student services and amenities fee, which higher education providers charge
for non-academic student services and amenities such as counselling services.[12]
The 2018 fee is capped at $298 per student, with those studying part-time
charged up to 75 per cent of the full-time fee.[13]
483,803 SA-HELP loans were issued in 2016.[14]
OS-HELP is available for eligible Commonwealth-supported higher
education students undertaking part of their course overseas. Unlike other HELP
loans, OS-HELP is paid to the student (rather than the higher education
provider, which is the case for the other schemes) and can be used for living
costs, including airfares and accommodation.[15]
Students must be approved for the loan by their higher education provider, may
take out only two OS-HELP loans—each to be expended for a six-month study period—over
the course of their studies, and can borrow only up to a set cap, which is $6,665
(if not studying in Asia) or $7,998 (if studying in Asia) in 2018.[16]
14,861 OS-HELP loans were issued in 2016.[17]
OS-HELP was introduced with a 20 per cent fee, however this was removed in
2009.[18]
Introduced in 2007 for study from 2008, VET FEE-HELP was
replaced by VET Student Loans from 1 January 2017.[19]
VET Student Loans are available to VET students studying an approved course at
an approved training provider, to defer their course costs.[20]
The FEE-HELP lifetime borrowing limit also applies to and includes VET Student
Loans, meaning borrowings under both loans contribute to the total available
balance.[21]
Like FEE-HELP, a loan fee also applies to VET Student Loans—a 20 per cent fee
is applied unless the student is enrolled in a place that is subsidised by
their state or territory government.[22]
Although the lifetime borrowing limit and loan fee applied to borrowings under
VET FEE-HELP, the introduction of VET Student Loans also saw the introduction
of course borrowing limits in response to rapidly increasing debt.[23]
In 2017, course borrowing limits of $5,000, $10,000 and $15,000 applied depending
on the course, with a $75,000 limit available for specified aviation courses.[24]
The size of the HELP loan portfolio has grown
substantially in recent years (Figure 1 below). The most recent available forward estimates
for HELP, shown in Figure 2 below, project the total HELP debt owing will reach
approximately $75 billion by 2020–21.[25]
At 30 June 2017, the estimated the proportion of debt not expected to be repaid
(DNER) was 25 per cent.[26]
However, this estimate drops to 18 per cent if VET loans are not included.[27]
Figure 1: Total outstanding Higher Education Loan Program debt, 2010–11 to
2015–16 ($m)
Source: Australian Tax Office
(ATO), Taxation Statistics 2014–15, ‘Summary – Table 5’, 2017.
Figure 2: Higher Education Loan Program total estimated outstanding debt,
2016–17 to 2020–21 ($m)
Source: Australian Government, ‘Statement
10: Australian Government financial budget statements’, 2017–18 Budget:
Budget paper no. 1: 2017–18, p. 29.
Notes: 2017–18 Budget forward estimates were based on policy
settings at May 2017, which included measures from the Higher
Education Support Legislation Amendment (A More Sustainable, Responsive and
Transparent Higher Education System) Bill 2017, which have since been
replaced by the 2017–18 mid-year economic and fiscal outlook
‘Higher Education Reforms—revised implementation’ measure.[28]
Growth in the overall size of the HELP loan portfolio is
also reflected in the rising average outstanding debt ($20,300 in 2016–17) and
time to repay (8.9 years in 2016–17).[29]
However, as shown in Figure 3 below, the proportion of debtors owing
above $30,000 is, while rising, still below 20 per cent.
Figure 3: Higher Education Loan Program proportion of debtors by size of debt,
2011–12 to 2015–16
Source: Australian Tax Office (ATO), Taxation
Statistics 2014–15, ‘Summary – Table 5’, op. cit.
Student Start-up
Loans
The SSL, administered in the Human Services portfolio,
replaced the Student Start-up Scholarship from 1 July 2017.[30]
According to the Department of Social Services (DSS), ‘[t]he SSL aims to
increase participation in higher education by assisting students with the costs
of commencing study, including the purchase of text books, computers and
internet access.’[31]
The SSL is available to eligible higher education students receiving Youth
Allowance (student), Austudy or ABSTUDY Living Allowance in addition to their
income support payments.[32]
At 1 January 2018, $1,055 can be paid to approved students twice per
year, generally at the beginning of each semester.[33]
For SSL debtors who also have debt under other programs, SSL debt is repaid
second (after HELP is fully repaid), and shares the same repayment threshold
and rates as HELP (see Table 1 below for the full list of current
repayment thresholds and rates).[34]
Trade
Support Loans
According to DET, ‘[t]he Trade Support Loans (TSL) program,
which commenced in July 2014, aims to increase completion rates among
Australian Apprentices in priority areas by providing financial support to
assist them with the costs of living and learning while undertaking an
apprenticeship.’[35]
Similar to the SSL and OS-HELP, the TSL is paid directly to the apprentice, and
can be spent on everyday costs.[36]
The TSL provides up to a $20,420 lifetime limit (indexed annually on 1 July) for
eligible apprentices completing a qualification on the Trade Support Loans
Priority List 2014.[37]
Apprentices opt in for six monthly periods, and receive monthly payments. The
amount available in each six-monthly period decreases over the four-year term
of a typical apprenticeship, from up to $8,168 in the first year, to up to $2,042
in the fourth year. Once the apprenticeship is complete, a 20% discount is
applied to the outstanding TSL debt. Repayments are made according to the same
arrangements as HELP and the SSL, outlined in Table 1 below, and TSL
debt repaid third if debtors owe under the other programs.[38]
The first evaluation of the TSL is due to be completed in 2017–18.[39]
Student
Financial Supplement Scheme
The SFSS was first introduced in January 1993 as the
AUSTUDY/ABSTUDY Supplement, and operated under that name until the introduction
of Youth Allowance in July 1998, at which time it moved from the education
portfolio into the then Department of Family and Community Services, and
renamed the SFSS.[40]
The SFSS operated until 31 December 2003, and outstanding debts continue to be administered
in the Social Services portfolio and collected through the tax system under
arrangements similar to that for HELP, SSL and TSL.[41]
Under the SFSS scheme as it operated just before its closure, eligible tertiary
students could trade in all or part of their student income support payment for
twice the amount in the form of a loan.[42]
For example, a student trading in $100 of their income
support payment would receive $200 for everyday expenses, and $200 would be
recorded as an SFSS debt. In explaining the scheme’s closure, then Minister for
Children and Youth Affairs, Larry Anthony, said the loan was a ‘debt trap’,
which had resulted in high levels of debt among the poorest students, and high
rates of debt not expected to be repaid (DNER).[43]
At the time, an unpublished report from the Australian Government Actuary (AGA)
put SFSS DNER at fifty per cent.[44]
Unlike other student loan debts, SFSS has specific repayment thresholds and
rates, and is repaid concurrently with other loans listed above, as
outlined in Table 2 below.
According to the 2017–18 Budget papers, total estimated
outstanding SFSS debt in 2016–17 was $367 million, but projected to be
less than half this in 2020–21 (Figure 4 below).
Figure 4: SFSS
total estimated outstanding debt, 2016–17 to 2020–21, at 2017–18 Budget ($m)
Source: Australian Government, ‘Statement
10: Australian Government financial budget statements’, op. cit., pp.
10–29.
The
sustainability of student loan programs
The key measures in this Bill (the lower minimum HELP
repayment threshold and rate, and HELP borrowing limit) were announced in the Mid-year
Economic and Fiscal Outlook 2017–18 (MYEFO).[45]
The MYEFO ‘Higher Education Reforms—revised implementation’ measure replaces
the previous unlegislated higher education reform measures from the 2017–18
Budget, which had been brought forward in the Higher
Education Support Legislation Amendment (A More Sustainable, Responsive and
Transparent Higher Education System) Bill 2017 (the HESLA Bill).[46]
In turn, the HESLA Bill was a post- consultation replacement for the
unsuccessful Higher
Education and Research Reform Bill 2014, an amended version of the Higher
Education and Research Reform Amendment Bill 2014, which proposed to
legislate the far-reaching 2014–15 Budget higher education reform announcements,
including the deregulation of undergraduate higher education fees, an average
20 per cent cut to funding through the Commonwealth Grant Scheme (CGS), a real
interest rate for HELP debts and a lower income threshold for repayment.[47]
This Bill is more narrowly focused than its predecessors
partly because the other key elements of the MYEFO higher education reform
announcements, that CGS funding for 2018 and 2019 would be frozen at 2017
levels, and future funding growth from 2020 would be linked to performance
targets, could be achieved without legislation.[48] However, it continues the
framing of higher education funding in terms of sustainability. One DET
fact sheet about the current reform package explains:
These reforms are necessary to ensure Australia’s generous,
income-contingent loan system remains sustainable so future generations of
Australians, regardless of their background or their financial means, can
continue to access higher education without upfront fees.
Outstanding HELP loans now total more than $50 billion, and
if reform is not pursued around a quarter of new debts are not expected to be
repaid. Some students have borrowed excessively against the student loan
schemes and amassed more debt than can be repaid during their working life.[49]
While there is no agreed definition of ‘sustainability’ in
respect to student loans, according to DET’s performance criteria, HELP loans
should be ‘affordable for both students and the community’.[50] For the community (via
the Commonwealth), outstanding HELP debt is a financial asset on the
balance sheet which incurs costs in two ways:
- as
there is no interest paid on the debt and the debt is indexed to inflation (which
is usually lower than the Commonwealth’s borrowing costs) there is an implicit
subsidy consisting of the difference between borrowing costs and what the
debtor pays and
- some
‘doubtful’ HELP debt is never repaid due to death of the debtor or the income
threshold for repayment not being met.[51]
The key consideration in proposals to improve the
sustainability of HELP is therefore balancing measures to recover or avoid these
costs with the expectations of students, prospective students, their parents,
and higher education providers, who are concerned with access to education and
repayment affordability.
Some lending costs are currently recovered through the FEE-HELP,
VET FEE‑HELP, and VET Student Loans loan fees discussed in the
previous section. Analysis in a higher education context suggests that when
individual HELP debt levels are low, as is the case for most HECS-HELP debt
where fees are capped, then the subsidy is low, but when individual debt levels
are high, such as in the upper limits of FEE-HELP debt, then taxpayer subsidies
range from 20 to 30 per cent—hence the fees are applied to loans which risk
higher subsidies, rather than across all HELP loans.[52]
The 2008 Review of Australian Higher Education chaired by Professor Bradley
(the Bradley review) reiterated that the FEE-HELP loan fee was ‘intended to
recover some of the costs to the Commonwealth associated with the repayment
subsidies.’[53]
However, because the design of HELP does not include any
credit risk management akin to commercial credit arrangements, loan fees
essentially transfer the risk of non-payment from government to the individuals
who do repay their debt. Mark Warburton, Honorary Senior Fellow at the LH
Martin Institute, argues:
There is a policy intention/objective that some people will
not be required to repay their loan. This is in stark contrast to the usual
arrangements of lending financial institutions where the objective is that all
of a loan and all of its interest is repaid.[54]
When a student has a combined debt in different categories, targeted
cost recovery through existing loan fees also appears to be less appropriate:
Students who go onto FEE-HELP courses while they still have a
HECS-HELP debt will have larger overall HELP debts than students who just do
one undergraduate FEE-HELP course... the surcharge should be adjusted to the
total existing HELP debt, rather than being based on undergraduate/postgraduate
distinctions that entrench unfair anomalies in the system.[55]
Additionally, since borrowing for each course paid for through
VET Student Loans is capped, the modelling of subsidies based on the FEE-HELP
borrowing limit is less likely to apply to newer borrowers undertaking VET
qualifications.
However, alternatives such as the proposal in the unsuccessful
Higher
Education and Research Reform Amendment Bill 2014 to abolish the FEE-HELP
loan fee and change HELP debt indexation from CPI to the 10-year government
bond rate, capped at six per cent, also have inequitable outcomes.[56]
Analysis of the 2014 bond rate proposal suggested a higher indexation rate
would have a disproportionate impact on lower income professions such as
teaching and nursing, and would have a greater impact on women across all
professions, with debts continuing to grow in real terms during times outside
the workforce.[57]
To resolve these tensions, the Grattan Institute’s Andrew
Norton and Ittima Cherastidtham have proposed a 15 per
cent loan fee across all HELP loans to equalise government cost recovery across
loan schemes.[58] Bruce Chapman, one of the designers of HECS,
has also supported this proposal.[59]
Nevertheless, recently legislated changes to improve the
sustainability of HELP have focused on reducing the amount of unpaid HELP debt.
Recent changes include the lower repayment rate of two per cent and minimum
repayment threshold of $51,957 due to commence from 1 July 2018, and HELP
repayments for overseas debtors which commenced 1 July 2017.[60]
The question of how best to recover the lending costs associated with HELP is
not directly addressed in this Bill.
Committee consideration
Senate
Education and Employment Legislation Committee
The Bill was referred to the Senate Education and Employment
Legislation Committee. The Committee reported on 16 March 2018, recommending
that the Government ‘consider amending schedule 3 of the [B]ill to introduce a
cap on outstanding HELP debts, rather than a lifetime loan limit’, but
otherwise pass the Bill.[61]
Details of the inquiry are available from the inquiry
homepage.
Senate
Standing Committee for the Scrutiny of Bills
The Senate Standing Committee
for the Scrutiny of Bills had no comment on the Bill.[62]
Policy
position of non-government parties/independents
The Labor
Senators' Dissenting Report in the Senate Education and Employment
Legislation Committee report on the Bill recommends the Bill not be supported,
and states ‘Labor Senators oppose the Higher Education Support Legislation
Amendment (Student Loan Sustainability) Bill 2018... Labor believes the changes
to HELP repayment thresholds are simply driven by budget cuts.’[63]
During her speech to the Universities Australia (UA) conference
on 1 March 2018, Labor’s Shadow Minister for Education and Training, Tanya
Plibersek, spoke against the higher education savings measures announced in MYEFO.[64]
The speech also detailed plans for National Inquiry into the architecture of
post-secondary education to inform policy approaches, if Labor is elected to
government.[65]
The Nick Xenophon Team (NXT) welcomed the announcement of
the proposed National Inquiry, which reflects the NXT commitment to a ‘comprehensive
review [of post-secondary education], akin to the Gonski-led review of
education.’[66]
The Greens’ higher education spokesperson, Senator Sarah
Hanson-Young, also responded to the MYEFO announcements by focusing on the impact
of the funding freeze on Commonwealth supported places (which did not need to
be legislated) stating ‘the Government must guarantee that all students offered
a place at university will have their study funded, following billions of
dollars in cuts that puts at risk 10,000 places this year alone, according to
Universities Australia.’[67]
The Australian
Greens Senators' Dissenting Report also recommends the Senate oppose
the Bill.[68]
Position of
major interest groups
The HELP
minimum repayment threshold
A number of submissions to the Senate Committee Inquiry
raise concerns about the possible impact of a lower HELP minimum repayment
threshold on access to higher education and graduate living conditions.[69]
The National Union of Students and Council of Australian Postgraduate
Associations have collaborated on a campaign called Bury the Bill to
oppose the Bill, stating it ‘condemns lower-earning graduates to pay back their
student loans when barely earning minimum wage.’[70]
UA argues that HELP repayment should begin at around
average earnings.[71]
The Australian Council of Deans of Arts, Social Sciences and Humanities (DASSH)
argues the measure will have a disproportionate impact on graduates of
humanities, arts and social science courses, who often take longer to establish
their careers and are more likely to be women, resulting in periods of lower
earnings.[72]
In contrast, the Grattan Institute argues that HELP
repayment arrangements should be more closely aligned with protections in place
to prevent and alleviate poverty, rather than average wages:
Although the high threshold was politically understandable in
the late 1980s, it is anomalous within the broader Australian income protection
system. A lower initial threshold would bring HELP more into line with other
forms of income protection for working-age adults ...
Using the Household, Income and Labour Dynamics in Australia
(HILDA) survey, Grattan previously estimated the effect of lowering the initial
threshold from about $56,000 to $42,000 and found that about half of debtors
who would start repaying have a partner. Nearly a third of those with a partner
have a combined disposable household income of at least $100,000 and nearly
three quarters have household disposable incomes of at least $80,000. [73]
The
lifetime HELP borrowing limit
The possible impacts of the combined lifetime HELP
borrowing limit are addressed in a number of submissions. The University of
Canberra stated it:
... strongly supports the encouragement of lifelong learning in
order to meet the changing demands of the world of work. The university does
not agree that there should be a limit on student loans for education.[74]
EPHEA suggests the limit ‘may impact negatively on
students who incurred a VET student debt as a pathway to higher education. In
addition, the method of determining the loan limit is not explained, and may
have implications for students accessing Start-up loans.’[75]
Likewise, Science and Technology Australia raises concerns about the impact on
those entering university from VET pathways and then undertaking further
training to become teachers, especially in science, technology, engineering and
mathematics.[76]
Bond University (Bond), a private not-for-profit
institution whose domestic students would generally be eligible to defer their
course costs through FEE-HELP but not HECS-HELP, is particularly concerned
about the impact of the limit:
Bond University strongly advocates for a system which
supports life-long learning. We also understand the need for policy settings
that are fiscally responsible and sustainable, and we accept that cap on the
total loan value provides a viable way of mitigating the risk of ballooning
debt. We propose a refreshable loan as a responsible balance between these two
objectives. Students who have accessed HELP loans repaid
their debt, in part or in full, should be able to access the scheme again to
fund further study so long as their outstanding debt does not exceed the loan
cap. [77]
The University of Melbourne, which under the ‘Melbourne
model’ offers more generalist undergraduate degrees with professional
specialisations at postgraduate level, likewise recommends against the limit,
and proposes if adopted the Senate consider amendments including a higher borrowing
limit, exceptions for long term unemployed or primary carers of children
returning to work, and the option of refreshing the limit by making debt
repayments.[78]
Other
issues
Bond also raises the issue of loans fees, which as
discussed earlier in this digest only apply to some loans under the FEE-HELP
and VET Student Loans (and previously VET FEE-HELP) loans. Bond argues ‘[t]he
harmonisation of HELP schemes proposed by this legislation needs to go one step
further to set equal terms for the student borrowers by introducing a
consistent approach to loan fees’.[79]
Financial
implications
According to the Explanatory
Memorandum to the Bill:
- changes
to HELP repayment thresholds and indexation will deliver savings of $345.8
million from 2017–18 to 2020–21
- changes
to SFSS repayment thresholds and order of repayment of debts will have nil
fiscal balance impact and
- the
introduction of the combined HELP loan limit will cost $22.9 million from
2017–18 to 2020–21.[80]
Statement of Compatibility with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[81]
Parliamentary
Joint Committee on Human Rights
At the time of writing, the Bill had not been considered
by the Parliamentary Joint Committee on Human Rights.
Key issues
and provisions
Changes to repayment
thresholds and indexation
As discussed above, for the 2017–18 financial year, HELP,
SSL, TSL and SFSS debtors must begin making repayments through the tax system
once their income reaches $55,874 per annum, although apart from this
commonality, SFSS-specific repayment thresholds and rates currently apply. New
HELP, SSL and TSL thresholds and repayment rates, due to commence 1 July 2018 for
the 2018–19 financial year, were given effect by the Budget Savings
(Omnibus) Act 2016.
Schedule 1 proposes changes to repayment thresholds
and rates for all four loan programs including a lower minimum repayment
threshold of $45,000 per annum with a repayment rate of one per cent,
commencing 1 July 2018 for the 2018–19 income year, with SFSS
repayment arrangements proposed to come under HESA from 2019–20. It also
proposes to change how the repayment thresholds are indexed.
While the appropriate level for repayments to begin is in
some respects always open to debate, one consequence of the proliferation of
loans programs is a debtor population with weaker earnings potential than was
anticipated in the original design of HECS, meaning higher repayment thresholds
pose a greater risk of unpaid debt.[82]
In particular, in light of the introduction and expansion
of VET FEE-HELP, now VET Student Loans, the Australian literature on
educational attainment and earnings consistently shows higher lifetime earnings
among higher education graduates compared with those with vocational
post-school qualifications. For example, a report prepared by National Centre
for Social and Economic Modelling (NATSEM) using data from the 2009–10
Australian Bureau of Statistics (ABS), Survey of Income and Housing
Confidentialised Unit Record File shows a Bachelor degree holder was likely to
earn around $2.9 million over their lifetime (in 2010 dollars) compared with
$2.1 million for a person with Year 12 or Certificate qualifications, and $2.4
million for someone with a Diploma.[83]
According to the ABS, in 2017, median weekly earnings stood at $1,035 for
people with a Certificate III or IV, $1,026 for people with an Advanced Diploma
or Diploma, and $1,280 for those with a bachelor degree.[84]
However, the tighter controls on lending introduced with VET Student Loans may
already be going some way toward addressing the higher risk of HELP loans for
VET qualifications.[85]
The latest graduate employment outcomes from DET’s Quality
Indicators for Learning and Teaching (QILT) shows that in 2017, 71.8 per cent
of undergraduate, 80.4 percent of postgraduate research graduates, and 86.1 per cent
of postgraduate coursework graduates were in full-time employment four months
after completing their degree.[86]
19.7 per cent of undergraduates were in part time employment and seeking more
hours, although the majority of these were seeking more hours because they were
still studying.[87]
The median starting salary for the full-time employed graduates was 60,000 for
undergraduates, 81,000 for postgraduate coursework graduates, and 87,800 for
postgraduate research graduates.[88]
Despite this, even among bachelor degree holders the
lifetime earnings premium varies by gender and field of education. Medicine,
law and dentistry graduates achieve substantially higher earnings premiums than
those with humanities, agriculture and performing arts degrees.[89]
Meanwhile, a median male bachelor degree holder has lifetime additional
earnings of $1.4 million, compared with $1 million for the median female
bachelor-degree holder.[90]
While there is limited research on the labour market outcomes of graduates from
disadvantaged backgrounds in Australia, available analysis suggests that for
some groups—namely graduates from non-English speaking backgrounds and female
graduates in science, technology, engineering and mathematics
fields—disadvantages persist in the labour market.[91]
As such, since introduction of HECS, efforts to recover
government costs by increasing students’ costs—either by increasing fees or
changing repayment arrangements—have been a recurring concern. However, the
evidence that students are dissuaded from study by less generous payment
arrangements is mixed.
In 2002, Chapman and Ryan surveyed the research literature
and analysed data from the Youth in Transition Survey, and concluded that the
introduction of HECS (which introduced student contributions where government
had previously paid the full cost) did not adversely affect participation.[92]
For students from low socio-economic (SES) backgrounds, 2009 research suggested
factors relating to leveraging school performance for university entry may be
of more consequence and ‘policy interventions that rectify the credit
constraint problem that faces individuals at the time they make university
entrance decisions are not sufficient to equalize university participation
across social groups’.[93]
However, 2011 analysis by Deloitte Access Economics for
the then Department of Education, Employment and Workplace Relations found
modest reductions in demand, measured by number of applications, among low SES
students, and people aged 21 and over, directly following some previous
HECS/HELP policy changes, as well as some inconsistent effects by field of education.[94]
However, participation rates have continued to increase over the longer term,
suggesting these effects may be relatively short lived.[95]
If the overriding policy aim of HELP is to increase access
to tertiary education, debt write-down is a necessary feature to achieve the
social policy goals of the program. However, if reducing government costs is
the overriding concern, then it is notable that payment arrangements for HELP
are much more generous than those applied in some other social policy areas.
Andrew Norton outlines:
If risk management is HELP’s core function, fairness
considerations suggest that a lower threshold is needed. Students should expect
to repay their debts, except when they experience financial hardship. The
threshold should not be set with reference to average weekly earnings, but
should instead use benchmarks of low income. While some social security
benefits are arguably too low, threshold reform should aim for greater
alignment among government income protection programs.[96]
Changes to
repayment thresholds and rates under HESA
As set out in Table 1 below, part 1, item 1 proposes
to replace the minimum repayment income at paragraph 154–10(a) of the HESA
with an amount of $44,999 for the 2018–19 income year. Item 2 proposes
to repeal and replace the table at section 154–20 of HESA, which sets
out repayment income thresholds and rates.
As can be seen in the table, the new arrangements add to
those due to commence 1 July 2018 to create a more gradual transition from nil
to four per cent repayments, requiring repayments to begin at lower incomes and
avoiding the ‘cliff’ currently in place at four per cent, where someone earning
$55,874 in 2017–18 makes no repayment, but someone earning $55,875 pays four
per cent of their total income, or $2,235, unless they qualify for an
exemption. The DET submission to the Senate Committee Inquiry into the Bill
makes the point that under these arrangements there appears to be ‘a group of
debtors with their reported income just below the current minimum repayment
threshold. This suggests that the current repayment rates create incentives for
some debtors to minimise their reported HELP repayment income to deliberately
avoid repayments.’[97]
However, in recent years the CPI indexation rate applied to outstanding
HELP, SSL, TSL and SFSS debts that are at least 11 months old on 1 June each
year has varied between 3.0 per cent and 1.5 per cent.[98]
This means repayments at the lower end of the proposed rates are likely to fall
below indexation growth, with debtors continuing to see their HELP balance grow
even as they make repayments.
Additionally, the proposed changes would see some repaying debtors
move between repayment rates. Currently, someone earning $60,000, the median
starting salary for a full-time employed graduate from an undergraduate degree
in 2017, would repay 4.0 per cent in 2017–18, and remain at that rate in 2018–19.[99]
Under the proposed changes, they would move down to a 3.0 per cent repayment
rate in 2018–19.
At higher incomes, a number of new thresholds apply. In 2017–18,
an eight per cent repayment rate applies to incomes of $103,766 and above. In 2018–19,
the eight per cent rate will apply to incomes of $107,214 and above. Under the
proposed changes, eight per cent will apply from $104,548 to $110,820, with new
rates at 0.5 per cent increments up to 10 per cent for incomes of $131,989
and above.
However, at a minimum repayment threshold of $45,000 for
2018–19, exemptions under section 154–1 of HESA, which
exempts debtors from making repayments if, under section 8 of
the Medicare
Levy Act 1986, they do not have to pay the full Medicare Levy, would
likely apply to more people.[100]
According to the ATO:
In 2016–17 your Medicare levy is reduced if your family
taxable income is equal to or less than $45,676 ($59,587 if you are entitled to
the seniors and pensioners tax offset) plus $4,195 for each dependent child you
have.[101]
Therefore, under current arrangements and at 2016–17
rates, a family with three children (and not entitled to the seniors and
pensioners tax offset) would not make HELP repayments until their family
taxable income was above $58,261. Using the available 2016–17 rates for
Medicare Levy exemption from the ATO, a family with one child (and not entitled
to the seniors and pensioners tax offset) would be exempt up to a family
taxable income of up to $49,871 per annum.[102]
Table 1: 2017–18 and 2018–19 repayment income thresholds
and rates for HELP, SSL, and TSL and proposed new arrangements
| Repayment income thresholds 2017–18 |
Repayment rates 2017–18 |
Repayment income thresholds 2018–19 |
Repayment rates 2018–19 |
Repayment income thresholds 2018–19 as proposed in the
Bill |
Repayment rates 2018–19 as proposed in the Bill |
| |
|
|
|
Below $44,999 |
Nil |
| |
|
Below $51,956 |
Nil |
$45,000 – $51,956 |
1% |
| Below $55,874 |
Nil |
$51,956 –$57,729 |
2% |
$51,957 – $55,073 |
2% |
| $55,874 – $62,238 |
4% |
$57,730 – $64,306 |
4% |
$55,074 – $58,378 |
2.5% |
| $62,239 – $68,602 |
4.5% |
$64,307 – $70,881 |
4.5% |
$58,379 – $61,881 |
3% |
| $68,603 – $72,207 |
5% |
$70,882 – $74,607 |
5% |
$61,882 – $65,594 |
3.5% |
| $72,208 – $77,618 |
5.5% |
$74,608 – $80,197 |
5.5% |
$65,595 – $69,529 |
4% |
| $77,619 – $84,062 |
6% |
$80,198 – $86,855 |
6% |
$69,530 – $73,701 |
4.5% |
| $84,063 – $88,486 |
6.5% |
$86,856 – $91,425 |
6.5% |
$73,702 – $78,123 |
5% |
| $88,487 – $97,377 |
7% |
$91,426 – $100,613 |
7% |
$78,124 – $82,811 |
5.5% |
| $97,378 – $103,765 |
7.5% |
$100,614 –
$107,213 |
7.5% |
$82,812 – $87,779 |
6% |
| $103,766 and above |
8% |
$107,214 and above |
8% |
$87,780 – $93,046 |
6.5% |
| |
|
|
|
$93,047 – $98,629 |
7% |
| |
|
|
|
$98,630 – $104,547 |
7.5% |
| |
|
|
|
$104,548 – $110,820 |
8% |
| |
|
|
|
$110,821 – $117,469 |
8.5% |
| |
|
|
|
$117,470 – $124,517 |
9% |
| |
|
|
|
$124,518 – $131,988 |
9.5% |
| |
|
|
|
$131,989 and above |
10% |
Source: Recreated from ATO, ‘HELP,
SSL, ABSTUDY SSL, TSL and SFSS repayment thresholds and rates’, op. cit.;
Schedule 1 of the Budget
Savings (Omnibus) Act 2016; Parliament of Australia, Higher
Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018
homepage, item 2 of Schedule 1.
Changes to SFSS
repayment thresholds
Part 1, items 3 to 5 of
Schedule 1 to the Bill propose to amend the Social Security Act 1991
to repeal current Section 1061ZZFD, which sets out the SFSS-specific repayment
thresholds and rates, and replace it with proposed section 1061ZZFD to apply
the repayment thresholds and rates under section 154–20 of the HESA from
2019–20, and establish transitional SFSS repayment rates and thresholds for
2018–19, as set out in Table 2 below. Proposed section 12ZLC of
the Student Assistance Act 1973, at item 6, has the same
effect.
Table 2: 2017–18 repayment income thresholds and
rates for SFSS and proposed transitional arrangements for 2018–19
| Repayment income thresholds 2017–18 |
Repayment rates 2017–18 |
Proposed transitional repayment income thresholds 2018–19 |
Proposed transitional rates 2018–19 |
| Below $55,874 |
Nil |
Below $57,730 |
Nil |
| $55,874 – $68,602 |
2% |
$57,731 – $70,881 |
2% |
| $68,603 – $97,377 |
3% |
$70,882 – $100,613 |
3% |
| $97,378 and above |
4% |
$100,614 or more |
4% |
Source: Recreated from ATO, ‘HELP,
SSL, ABSTUDY SSL, TSL and SFSS repayment thresholds and rates’, op. cit.;
Item 3, Parliament of Australia, Higher
Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018
homepage, Australian Parliament website.
Changes to
indexation under HESA
Part 2 of Schedule 1 to the Bill proposes amendments
to change the indexation of repayment thresholds under HESA from AWE to CPI. The
application provisions in Part 3 propose to give effect to these changes
from the 2019–20 income year.
Currently, the repayment income thresholds are indexed by
the change in AWE for that income year under section 154–25 of the HESA.
Items 8 and 9 propose to repeal and replace the AWE indexation formula
in this section with the change in the index number for the
income year.
Index number is currently defined in clause 1
of the Dictionary at Schedule 1 to the HESA, as having, for the purposes
of Part 4–1 of HESA, the meaning given by section 140–15 and for the
purposes of Part 5–6, the meaning given by section 198–20. Item 14 proposes
to amend this definition by providing that for the purposes of Parts 4–1
and 4–2 of HESA, index number has the meaning given by proposed clause 2
of Schedule 1 to HESA, which is inserted by item 16 of Schedule 1
to the Bill.[103]
Proposed clause 2 provides that, for the purposes of Parts 4–1 and 4–2,
‘the index number for a quarter is the All Groups Consumer Price
Index number, being the weighted average of the 8 capital cities, published by
the Australian Statistician in respect of that quarter’. This mirrors the
definition of index number in section 198–20 of the HESA.
The effect of these changes is that the same indexation
formula currently applied to other HESA funding under Part 5–6
would apply to the loan repayment thresholds.[104]
As can be seen in the table at Appendix 1: Average Weekly Earnings (AWOTE), HELP repayment rates and thresholds: 1988–89 to 2016–17,
the minimum repayment threshold has generally remained around Average Weekly
Ordinary Time Earnings (AWOTE). Under section 154–25 of HESA, the repayment thresholds are subject to
indexation each year by the increase in average weekly earnings.[105]
As a consequence, the thresholds have tended to increase over time in real
terms until lower thresholds have been legislated. Andrew Norton, Higher Education Program Director for the
Grattan Institute, has recommended a shift to CPI indexation of the thresholds
to avoid this tension.[106]
However, it is important to note that during periods of slow wage growth below
CPI, such a change would see HELP repayment thresholds increase more quickly
than wages, creating more generous repayment arrangements over time—the
opposite to the intended effect.
Changes to
order of repayment of debts
As discussed above, debtors with borrowings under both SFSS
and other student loan schemes are currently required to make SFSS repayments concurrently
with the other student loan repayments once their income reaches the minimum
repayment threshold.
Referring to Table 1 and Table 2 above, this
would mean a debtor with SFSS and HELP borrowings and an income of $60,000 per
annum in 2017–18 would make HELP repayments of 4.0 per cent at the same time as
SFSS repayments of 2.0 per cent, bringing their repayment responsibilities up
to the 6.0 per cent level that would otherwise only apply to HELP debtors with
an income at least $17,619 higher—between $77,619 and $84,062.
Schedule 2 proposes amendments to the Social
Security Act 1991, Student Assistance Act 1973, and Trade Support
Loans Act 2014 to specify SFSS debts are to be paid after HELP, followed by
SSL, ABSTUDY SSL, and TSL. The application provisions contained in Part 2
of Schedule 2 specify that the amendments are to apply from the 2019–20
financial year. This commencement would be at the same time as the proposed
change to bring SFSS debts under the HELP repayment thresholds and rates in HESA.
Item 1 proposes amendments to the Social Security Act
1991 to repeal and replace subsection 1061ZVHA(1), which sets out the compulsory
SSL repayment liability. Under current subsection 1061ZVHA(1), compulsory
repayments must be made once a person’s income reaches the minimum repayment
threshold and the person has finished repaying any accumulated HELP debts. Proposed
subsection 1061ZVHA(1) adds accumulated SFSS debt, meaning SSL debt would
be repaid after HELP and SFSS, but before ABSTUDY SSL and TSL, if a person owes
under all programs.
Item 2 proposes amendments to the Student Assistance
Act 1973 to repeal and replace subjection 10F(1), which sets out the
compulsory ABSTUDY SSL repayment liability. Under current subjection 10F(1),
compulsory repayments must be made once a person’s income reaches the minimum
repayment threshold and the person has finished repaying any accumulated HELP and
SSL debt. Proposed subsection 10F(1) adds accumulated SFSS debt, meaning
ABSTUDY SSL debts would be repaid after HELP and SSL debts, but before TSL, if
a person owes under all programs.
Item 3 proposes amendments to the Trade Support Loans
Act 2014 to repeal and replace subsection 46(1), which sets out the
compulsory TSL repayment liability. Under current subsection 46(1), compulsory
repayments must be made once a person’s income reaches the minimum repayment
threshold and the person has finished repaying any accumulated HELP, SSL, or
ABSTUDY SSL debt. Proposed subsection 46(1) adds accumulated SFSS debt,
meaning TSL debts would be repaid last if a person owes under all student loan
programs.
Each of the proposed replacement subsections include debts
under section 154–16 of HESA as HELP debts. This means HELP repayments
charged as a levy under the Student Loans
(Overseas Debtors Repayment Levy) Act 2015 are treated as HELP
repayments for the purposes of repayment order.[107]
Introduction
of a combined HELP loan limit
As discussed above, under section 104–20 of HESA, a
lifetime borrowing limit, the FEE-HELP limit, currently applies to FEE‑HELP,
VET FEE-HELP and Vet Student Loans. In comparison, no borrowing limits
currently apply for HECS‑HELP, although a limit on the length of
Commonwealth supported study time available applied between 2005 and 2011.[108]
In 2018, the FEE-HELP lifetime borrowing limit is $127,992 for medicine,
dentistry and veterinary science students and $102,392 for all other students.[109]
Schedule 3 of the Bill proposes amendments to extend
the FEE-HELP limit, which would be renamed the ‘HELP limit’ to include all HELP
loans, and increase the loan limit for students undertaking medicine, dentistry
or veterinary science to $150,000. The application provisions outlined in Part
2 of Schedule 3 mean amendments would apply from 1 January 2019. No
changes are proposed to indexation of the loan limits, which are currently
indexed by CPI under Part 5-6 of HESA. The note to proposed section 128-20
(at item 54 of Schedule 3) confirms that loan limits are indexed.
Currently, a student who undertakes a Commonwealth
supported undergraduate degree and then continues their education by enrolling
in a postgraduate full fee-paying course only begins accruing debt towards the FEE-HELP
balance (and hence, borrowing limit) when they start using FEE-HELP, or, if
undertaking a VET qualification, VET Student Loans. The effect of the proposed
changes is that the HELP loan most often taken out by domestic undergraduate
students at public universities (HECS-HELP) will count towards the loan limit,
leaving a reduced HELP balance available for any further study.
According to Peter Dawkins, Vice-Chancellor of Victoria
University, income contingent loan caps ‘have a similar effect to a fee cap.’[110]
An effective cap limits fees in a deregulated market (such as currently exists
for domestic students studying postgraduate higher education courses, most
courses at non-university higher education providers, and many VET courses) as
the majority of students will be unable to pay above the set limit.
According to DET’s fact sheet on this measure ‘[t]he
limits are reasonable and sufficient, in most cases, to cover almost nine years
of study as a Commonwealth supported student.[111]
However, while Commonwealth supported fees are capped, some deregulated postgraduate
university course fees are already above the FEE-HELP loan limit, meaning this
assessment cannot be extended to the entire HELP portfolio. For example, Macquarie
University’s newly launched ‘Macquarie MD’ has an indicative annual fee of $64,000
for domestic students (who, under this program, are not eligible for a
subsidised ‘Commonwealth Supported Place’ or HECS-HELP), totalling approximately
$256,000 over the course of the four-year program.[112]
However, this is at the upper end of fees charged by Australian universities.
By comparison, the Australian National University Master of Laws annual
indicative fee for domestic students is $30,096, and consists of one year
full-time study.[113]
Item 54 of Schedule 3 inserts proposed Part 3–6 at the end of chapter 3 of HESA, to specify how the
HELP balance is to be worked out. Proposed section 128–15 sets out that a person’s HELP balance is comprised of the HECS-HELP,
FEE-HELP, VET FEE-HELP and VET student loans assistance provided to the person.
OS-HELP and SA-HELP are not included, although as discussed above spending
under these sub-schemes is already separately capped. The transitional
provisions set out at subitem 144(2) in Part 2 of Schedule 3 mean
that HECS-HELP assistance would not be applied to the HELP balance if the
census date for the unit is before 1 January 2019. Proposed subsection
125-15(2) specifies that for the purpose of working out the HELP balance,
it is immaterial whether the amounts provided have been repaid.
Proposed section 128–20
specifies that the HELP loan limit is $150,000 for students studying medicine,
dentistry and veterinary science courses, or $104,440 for all other students,
and that the HELP loan limit is indexed under Part 5–6.
Proposed section 93–20 at item 5 sets out the
limits of HECS-HELP, FEE-HELP, and VET FEE‑HELP assistance that may be
provided. Proposed subsection 93–20(2) specifies that if the sum of the
amounts to which the student would be entitled would exceed the student’s
available HELP balance on the census date, then the total amount of assistance
provided can only be up to the HELP balance.[114]
This means a student enrolling in a unit, or units with the same census date,
which cost more than the available HELP balance, would be liable to pay the
outstanding amount to the provider. Proposed subsection 93–20(3)
specifies that if a student is enrolled in units with more than one higher
education or VET provider, the student must notify each provider of the
proportion of the HECS–HELP, FEE-HELP, and VET FEE-HELP that is to be payable
for the units.
Item 6 will insert proposed Division 97, which
sets out the circumstances in which a person’s HELP balance is to be
re-credited in relation to HECS-HELP assistance. Currently under HESA,
providers must repay HELP loan amounts in certain circumstances, to avoid the
student incurring a debt improperly.[115]
These proposed amendments apply the conditions currently in place for
re-crediting the FEE-HELP balance in relation to FEE-HELP and VET FEE-HELP, in
light of the proposal to apply the borrowing limit currently in place for these
loans to HECS-HELP.
- Proposed
subsection 97–25(2) specifies that the provider must re-credit the
HECS-HELP assistance if special circumstances apply.
- Proposed
section 97–30 defines special circumstances for the purposes of the Division,
consistent with the definition currently at section 36–21 of HESA.
- Currently
under section 193–5 of HESA, a person is not entitled to HECS-HELP assistance
if they do not have a tax file number. Proposed section 97–27 specifies
that if a person’s enrolment is cancelled consistent with the provisions of
section 193–5, the HELP balance must be re-credited by the provider.
- Proposed
section 97–35 specifies that the student’s application for re-crediting
must be made within 12 months of the student’s withdrawal from the unit,
or if that does not apply, within 12 months of when the student undertook, or
was to undertake, the unit. Proposed section 97–40 specifies that the
provider can waive the requirement for the application to be made within the 12
month period if it was not possible for the application to the made during that
time.
- Proposed
section 97-42 specifies that a person’s eligible HELP balance must be
re-credited if the provider ceases to provide the course of which the unit is a
part.
- Proposed
subsections 97–25(3), 97–27(2) and 97–42(2) specify that the
Secretary of the relevant Department (currently DET) may act if the provider is
unable to re-credit the balance in the circumstances outlined in sections
97–25, 97–27 and 97–42.
The Bill does not contain any proposal to alter the OS-HELP
semester borrowing limit of $6,665 (if not studying in Asia) or $7,998 (if
studying in Asia), which can be expended twice during a course of study, or the
VET Student Loans course borrowing limits of $5,000, $10,000, $15,000 and
$75,000.
Items 122 to 143 of Schedule 3 deal with consequential
amendments to the VET
Student Loans Act 2016 to include VET Student Loans in the HELP loan
limit—changes largely consist of replacing ‘FEE-HELP balance’ with ‘HELP
balance’. The exception is item 123, which repeals the definition of
FEE-HELP balance as it is no longer needed, and item 124, which inserts
at section 6 the definition of HELP balance, specifying that it ‘has the same
meaning as in the Higher Education Support Act 2003’.
Concluding comments
This Bill presents a set of more narrowly focused higher
education reforms aimed to improve the sustainability of HELP. The lower
minimum repayment threshold and rate continues efforts to reduce the amount of
unpaid HELP debt, and the HELP loan limit extends arrangements currently in
place for VET Student Loans (previously VET FEE-HELP) and FEE-HELP to
Commonwealth supported students, returning domestic undergraduate students to
limited allocation similar to what was in place prior to the introduction of
the demand driven system. However, as Mark Warburton, Honorary Senior Fellow at
the LH Martin Institute, states:
There will always be a policy question
about the appropriate income level at which repayments should commence... Regardless
of where the repayment threshold is set, there will always be an amount of debt
that is ‘expected’ not to be repaid.[116]
In this way, these proposals, coupled with the other 2017–18
MYEFO higher education reform announcements, raise questions about the future
of the demand driven funding system and the role of HELP in increasing access
and participation in tertiary education.
Appendix 1: Average Weekly Earnings (AWOTE), HELP
repayment rates and thresholds: 1988–89 to 2016–17
1988–89 to 2003–04
| Income year |
AWOTE
($ pa)(a) |
Repayment rate and repayment threshold ($ pa)(b) |
| |
|
Nil |
1% |
2% |
3% |
3.5% |
4% |
4.5% |
5% |
5.5% |
6% |
| 1988–89(c) |
26
057 |
21
999 |
24
999 |
34
999 |
35
000+ |
|
|
|
|
|
|
| 1989–90 |
27
318 |
23
582 |
26
798 |
37
518 |
37
519+ |
|
|
|
|
|
|
| 1990–91 |
29
026 |
25
468 |
|
28
941 |
40
519 |
|
40
520+ |
|
|
|
|
| 1991–92 |
30
319 |
27
097 |
|
30
793 |
43
112 |
|
43
113+ |
|
|
|
|
| 1992–93 |
30
800 |
27
747 |
|
31
532 |
44
146 |
|
44
147+ |
|
|
|
|
| 1993–94 |
31
764 |
26
402 |
|
|
30
004 |
|
42
005 |
|
42
006+ |
|
|
| 1994–95 |
33
236 |
26
852 |
|
|
30
516 |
|
42
722 |
|
42
723+ |
|
|
| 1995–96 |
34
710 |
(d)19
999 |
|
27
674 |
31
449 |
|
44
029 |
|
44
030+ |
|
|
| 1996–97(e) |
35
942 |
(d)20
593 |
|
28
494 |
30
049 |
32
381 |
37
563 |
43
335 |
47
718 |
51
293 |
51
294 |
| 1997–98(e) |
37
344 |
20 700 |
|
|
21
830 |
23
524 |
27
288 |
32
934 |
34
665 |
37
262 |
37
263 |
| 1998–99(e) |
38
922 |
21
333 |
|
|
22
498 |
24
244 |
28
123 |
33
942 |
35
726 |
38
402 |
38
403 |
| 1999–00(f) |
40
037 |
21
983 |
|
|
23
183 |
24
982 |
28
980 |
34
976 |
36
814 |
39
572 |
39
573 |
| 2000–01(f) |
42
039 |
22
345 |
|
|
23
565 |
25
393 |
29 456 |
35
551 |
37
420 |
40
223 |
40
224 |
| 2001–02(f) |
44
270 |
23
241 |
|
|
24
510 |
26
412 |
30
638 |
36
977 |
38
921 |
41
837 |
41
838 |
| 2002–03(f) |
46
667 |
24
364 |
|
|
25
694 |
27
688 |
32
118 |
38
763 |
40
801 |
43
858 |
43
859 |
| 2003–04(f) |
48
571 |
25
347 |
|
|
26
731 |
28
805 |
33
414 |
40
328 |
42
447 |
45
628 |
45
629 |
2004–05 to 2016–17
| Income year |
AWOTE ($pa)(a) |
Repayment rate and repayment threshold
($ pa)(b) |
| |
|
Nil |
4% |
4.5% |
5% |
5.5% |
6% |
6.5% |
7% |
7.5% |
8% |
| 2004–05(f) |
50
929 |
35
000 |
38
987 |
42
972 |
45
232 |
48
621 |
52
657 |
55
429 |
60
971 |
64
999 |
65
000 |
| 2005–06(g) |
52
978 |
36
184 |
40
306 |
44
427 |
46
762 |
50
266 |
54
439 |
57
304 |
63
062 |
67
199 |
67
200 |
| 2006–07(g) |
55
143 |
38
148 |
42
494 |
46
838 |
49
300 |
52
994 |
57
394 |
60
414 |
66
485 |
70
846 |
70
847 |
| 2007–08(g) |
57
673 |
39
824 |
44
360 |
48
896 |
51
466 |
55
322 |
59
915 |
63
068 |
69
405 |
73
959 |
73
960 |
| 2008–09(g) |
60
991 |
41
598 |
46
333 |
51
070 |
53
754 |
57
782 |
62
579 |
65
873 |
72
492 |
77
247 |
77
248 |
| 2009–10(h) |
64
399 |
43
151 |
48
066 |
52
980 |
55
764 |
59
943 |
64
919 |
68
336 |
75
203 |
80
136 |
80
137 |
| 2010–11(h) |
67
077 |
44
911 |
50
028 |
55
143 |
58
041 |
62
390 |
67
750 |
71
126 |
78
273 |
83 407 |
83
408 |
| 2011–12(h) |
69
662 |
47
195 |
52
572 |
57
947 |
60
993 |
65
563 |
71
006 |
74
743 |
82
253 |
87
649 |
87
650 |
| 2012–13(h) |
73
239 |
49
095 |
54
688 |
60
279 |
63
448 |
68
202 |
73
864 |
77
751 |
85
564 |
91
177 |
91
178 |
| 2013–14(h) |
75
169 |
51
308 |
57
173 |
62
997 |
66
308 |
71
277 |
77
194 |
81
256 |
89
421 |
95
287 |
95
288 |
| 2014–15(h) |
76
963 |
53
345 |
59
421 |
65
497 |
68
939 |
74
105 |
80
257 |
84
481 |
92
970 |
99
069 |
99
070 |
| 2015–16(h) |
78
429 |
54 125 |
60
292 |
66
456 |
69
949 |
75
190 |
81
432 |
85 718 |
94
331 |
100 519 |
100 520 |
| 2016–17(h) |
|
54 868 |
61
119 |
67
368 |
70
909 |
76
222 |
82
550 |
86
894 |
95
626 |
101
899 |
101
900 |
| 2017–18(h) |
|
55
873 |
62
238 |
68
602 |
72
207 |
77
618 |
84
062 |
88
486 |
97
377 |
103
765 |
103
766 |
(a)
Average weekly ordinary time
earnings for adults working full time (calculated as average weekly ordinary
time earnings for the two quarterly survey estimates multiplied by 52 weeks)
(b)
Highest income level at which rate
is payable, except for top repayment rate, which commences at income level
specified
(c)
As HECS was only introduced on 1
January 1989, repayment rates for 1988–89 were at half the level of later years
(that is, 0.5%, 1.0% and 1.5%)
(d)
Repayment at 2% rate was voluntary
(e)
Taxable income plus net rental
losses
(f)
As per (e) plus total reportable
fringe benefits amounts
(g)
As per (f) plus exempt foreign
employment income
(h)
As per (g) plus any total
investment loss (which includes net rental losses), and reportable super
contributions.
Sources: Australian Taxation Office (ATO), ‘HELP, SSL, ABSTUDY SSL, TSL and SFSS repayment
thresholds and rates’, op. cit., Earlier years sourced from ATO
websites now archived at National Library of Australia, Australian Government web archive; ABS, Average weekly earnings, Australia, ‘Table
3’, cat. no. 6302.0, ABS, Canberra, 23 February 2017.
Members, Senators and Parliamentary staff can obtain
further information from the Parliamentary Library on (02) 6277 2500.
[1]. Explanatory
Memorandum, Higher Education Support Legislation Amendment (Student Loan
Sustainability) Bill 2018, p. 1.
[2]. Ibid.
[3]. A
more detailed outline of the HELP loans is available from C Ey, Higher
Education Loan Program (HELP) and other student loans: a quick guide,
Research paper series, 2016–17, Parliamentary Library, Canberra 2017.
[4]. Australian
Tax Office (ATO), ‘HELP,
SSL, ABSTUDY SSL, TSL and SFSS repayment thresholds and rates’, ATO
website, last modified 9 May 2017.
[5]. See
Schedule 1 of the Budget
Savings (Omnibus) Act 2016. This Act also discontinued the HECS-HELP
benefit, which reduced HELP repayments for graduates of particular courses who
chose to take up related occupations or work in specific locations, from 1 July
2017 (Schedule 3). Both of these measures were in the 2014–15 Budget. Australia
Government, Portfolio
budget statements 2014–15: budget related paper no. 1.5: Education Portfolio,
p. 23.
[6]. Ey,
Higher
Education Loan Program (HELP) and other student loans: a quick guide, op.
cit., p. 2.
[7]. Department
of Education and Training (DET), Annual
report 2016–17: opportunity through learning, DET, [Canberra], 2017, p.
45.
[8]. DET,
‘FEE-HELP’,
StudyAssist website.
[9]. DET,
Annual
Report 2016–17, op. cit., p. 53.
[10]. DET,
‘FEE-HELP’,
op.cit. The fee does not contribute to debts under the cap, or apply to
postgraduate study, including higher degrees by research, enabling courses,
courses undertaken through Open Universities Australia, or bridging study for
overseas-trained professionals.
[11]. DET,
‘2016 liability status
categories’, Table 5.1: actual student load (EFTSL) for all students by
liability status and broad level of course, full year 2016, DET website, 11
September 2017. 28,050 EFTSL includes all undergraduate student load under
‘deferred all or part of award or enabling course tuition fee’, except that for
enabling courses. This may be a slight over-estimation as it may include Open
Universities Australia or bridging study students.
[12]. Ey,
Higher
Education Loan Program (HELP) and other student loans: a quick guide,
op. cit., p. 3.
[13]. The
fee is capped and indexed each year. DET, ‘Student
services and amenities fee’, DET website.
[14]. DET,
Annual
Report 2016–17, op. cit., p. 53.
[15]. Ey,
Higher
Education Loan Program (HELP) and other student loans: a quick guide,
op. cit., pp. 2–3.
[16]. DET,
‘OS-HELP
loans and overseas study’, StudyAssist website.
[17]. DET,
Annual
Report 2016–17, op. cit., p. 53.
[18]. Australian
Government, ‘Part
2: expense measures’, Budget measures: budget paper no. 2: 2009–10, p.
152. See ‘An Innovation and Higher Education System for the 21st Century—remove
the loan fee on OS‑HELP
loans’.
[19]. Ey,
Higher
Education Loan Program (HELP) and other student loans: a quick guide,
op. cit., p. 3.
[20]. DET,
‘VET student loans’,
DET website, last modified 18 December 2017. Approved courses are only from
higher-level VET qualifications, including diploma, advanced diploma, graduate certificate
or graduate diploma, according to DET, ‘VET
student loans’, StudyAssist website.
[21]. DET,
‘VET
student loans’, StudyAssist website.
[22]. DET,
VET
student loans: information for students applying for VET student loans,
June 2017, p. 19. Under the National
Partnership Agreement on Skills Reform, the states and territories agree to
pay half of the debt not expected to be repaid and half of the concessional
loan cost for VET-FEE HELP loans (now VET student loans) for subsidised
students. This is ‘paid annually in arrears based on actuarial assessments
undertaken by the Commonwealth’ (Schedule 4). These arrangements were
established as an alternative to applying a loan fee to state and territory
Government subsidised VET courses. The lack of loan fee charge for these
purposes is established under part 3 of the VET Student Loans
Rules 2016, for the purposes of paragraph 137-19(2)(b)
of HESA.
[23]. This
is discussed in further detail in J Griffiths, VET
Student Loans Bill 2016 [and] VET Student Loans (Charges) Bill 2016 [and] VET
Student Loans (Consequential Amendments and Transitional Provisions) Bill 2016,
Bills digest, 41, 2016–17, Parliamentary Library, Canberra, 2016. According to
DET, a ‘Review
of the VET student loans approved course list and loan caps methodology’
was undertaken in 2017, finding ‘[t]here was no compelling evidence to warrant
significant change to the loan cap amounts at this early stage of the program.’
The most recent available data on VET Student Loan uptake is available from DET,
VET
student loans: six-monthly report: 1 July 2017 to 31 December 2017,
DET website.
[24]. Under
the VET Student
Loans (Courses and Loan Caps) Determination 2016, these amounts are indexed
each year from 2018.
[25]. The
size of the HELP loan portfolio can be estimated in two ways: the nominal value
and the fair value. The nominal value is the total face value of outstanding
HELP loans, which increases as new loans are issued and indexation is applied,
and decreases as loans are repaid. The fair value accounts for ‘losses’— that
is, debt not expected to be repaid and the difference between the indexation
applied to the loan and market interest rates. Therefore, while the fair value
is lower than the total amount of outstanding debt, it is considered to more
accurately reflect its future impact on Government cash flows. See
Parliamentary Budget Office (PBO), Higher
Education Loan Programme: Impact on the Budget, Report no. 2, 2016, p.
5 for more information.
[26]. DET,
Annual
Report 2016–17, op. cit., p. 45.
[27]. Ibid.
[28]. Relevant to HELP estimates, the Higher Education Support Legislation Amendment (A More
Sustainable, Responsive and Transparent Higher Education System) Bill 2017 included: from 2018, increased student contributions
of 7.5 per cent, to be phased in through an annual 1.8 per cent
increase over four years from 2018; an efficiency dividend of 2.5 per cent
applied to the Commonwealth Grant Scheme (CGS) in 2018 and 2019; a new set
of HELP repayment thresholds from 1 July 2018, including a minimum repayment
threshold on annual income in 2018–19 of $42,000 with a one per cent repayment
rate, and a maximum income threshold of $119,882 with a repayment rate of ten
per cent; from 1 July 2019 onwards, all HELP thresholds indexed by the Consumer
Price Index (CPI), instead of Average Weekly Earnings (AWE).
[29]. DET,
Annual
Report 2016–17, op. cit., p. 45.
[30]. DSS,
‘5.1.7.45
Student start-up scholarship – current rate’, Guide to Social Security
Law, 20 March 2018.
[31]. DSS,
‘1.2.7.165
Student start-up loan (SSL) – description’, Guide to Social Security Law,
20 March 2018.
[32]. Department
of Human Services (DHS), ‘Student
start-up loan’, DHS website, last updated 27 October 2017.
[33]. Ibid.
[34]. DSS,
‘6.9 SSL
repayment arrangements’, Guide to Social Security Law, 20 March
2018.
[35]. DET,
Annual
Report 2016–17, op. cit., p. 65.
[36]. Unless
otherwise indicated, information in this paragraph is from DET, ‘Trade
support loans’, Australian Apprenticeships website.
[37]. DET,
‘Trade
support loans priority list’, Australian Apprenticeships website.
[38]. Trade Support Loans
Act 2014 subsection 46(1).
[39]. DET,
Annual
Report 2016–17, op. cit., p. 65.
[40]. D
Daniels, Family
and Community Services (Closure of Student Financial Supplement Scheme) Bill
2003, Bills Digest 27, 2003–04, Department of the Parliamentary
Library, Canberra, 2003, p. 1.
[41]. ATO,
‘PAYG
withholding: explanations’, ATO website, last modified 30 June 2017.
[42]. DSS,
‘1.2.7.40
Student financial supplement scheme (SFSS) – description’, Guide to
Social Security Law, 20 March 2018.
[43]. L
Anthony (Minister for Children and Youth Affairs), Student
Financial Supplement Scheme will close, media release, 9 December 2003.
[44]. Daniels,
Family
and Community Services (Closure of Student Financial Supplement Scheme) Bill
2003, op. cit., p. 3.
[45]. Australian
Government, Mid-year
Economic and Fiscal Outlook 2017–18, Commonwealth of Australia,
pp. 143–4.
[46]. For
further information see Carol Ey, Higher
Education Support Legislation Amendment (A More Sustainable, Responsive and
Transparent Higher Education System) Bill 2017, Bills digest, 121,
2016–17, Parliamentary Library, Canberra, 2017.
[47]. The
Budget Savings
(Omnibus) Act 2016 gave effect to three 2014–15
Budget higher education reform announcements (the lower
HELP repayment threshold and rate, replacement of the Higher Education Grants
Index (HEGI) with the Consumer Price Index (CPI) for the purpose of HESA grants,
and discontinuation of the HECS‑HELP benefit, which reduced the HECS-HELP
payable for graduates from certain fields if they took up work in specified
locations or occupations).
[48]. Australian
Government, Mid-year
Economic and Fiscal Outlook 2017–18, op. cit., pp. 143–4.
[49]. DET,
‘Instituting a combined loan
limit for HECS-HELP, FEE-HELP, VET FEE-HELP and VET student loans’, DET
website, 18 December 2017, p. 1.
[50]. DET,
Annual
Report 2016–17, op. cit., p. 42.
[51]. A
Norton, Doubtful
debt: the rising cost of student loans, Grattan Institute, April 2014;
PBO, Higher
Education Loan Programme Impact on the Budget, op. cit.
[52]. B
Chapman and K Lounkaew, ‘HECS
loses its way’, Campus review, 15 January 2008, pp. 10–12.
[53]. D
Bradley, P Noonan, H Nugent and B Scales, Review
of Australian higher education: final report, [Bradley Review], Department
of Education, Employment and Workplace Relations (DEEWR), Canberra, December
2008, p. 168.
[54]. M
Warburton, Resourcing
Australia’s tertiary education sector, LH Martin Institute, October
2016, p. 34.
[55]. A
Norton, ‘Our
incoherent HELP loan scheme’, Andrew Norton, blog, 10 February 2010.
[56]. Parliament
of Australia, ‘Higher
Education and Research Reform Amendment Bill 2014 homepage’, Australian
Parliament website.
[57]. B
Phillips, ‘HECS upon you: NATSEM models the real impact of higher uni fees’, The Conversation, 25 June 2014.
[58]. A
Norton and I Cherastidtham, Shared
interest: a universal loan fee for HELP, Grattan Institute,
December 2016.
[59]. B
Chapman, ‘The
case for a fixed 15% fee on all student loans’, The Conversation, 9
December 2016.
[60]. Parliament
of Australia, Education Legislation Amendment (Overseas Debt Recovery) Bill 2015
homepage, Australian Parliament website; Schedule 1 of the Budget Savings
(Omnibus) Act 2016.
[61]. Senate
Education and Employment Legislation Committee, Inquiry
into the Higher Education Support Legislation Amendment (Student Loan
Sustainability) Bill 2018 [provisions], 16 March 2018, p. vii.
[62]. Senate
Standing Committee for the Scrutiny of Bills, Scrutiny
digest, 3, 2018, The Senate, Canberra, 2018, p. 14.
[63]. Senate
Education and Employment Legislation Committee, Higher
Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018
[provisions], op. cit., pp. 31–2.
[64]. T
Plibersek (Shadow Minister for Education and Training), Address
to the Universities Australia Conference, Canberra, speech, 1 March
2018, p. 6.
[65]. Ibid.,
p. 10.
[66]. Nick
Xenophon Team, 'Thanks
for listening!’ NXT welcomes commitment for inquiry into higher education,
media release.
[67]. S
Hanson-Young, Students
worked hard for university, the Government must work for them, media
release, 17 January 2018.
[68]. Senate
Education and Employment Legislation Committee, Higher
Education Support Legislation Amendment (Student Loan Sustainability) Bill 2018
[provisions], op. cit., p. 40.
[69]. Equity
Practitioners in Higher Education Australasia (EPHEA), Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 8], 27 February 2018, p.
3.
[70]. National
Union of Students and Council of Australian Postgraduate Associations, Bury the bill:
students collaborate to stop Government's changes to HELP, media release,
13 March 2018.
[71]. Universities
Australia (UA), Equity Practitioners in Higher Education Australasia (EPHEA), Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 34], 5 March 2018, pp. 1–2.
[72]. Australian
Council of Deans of Arts, Social Sciences and Humanities (DASSH), Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], 27 February 2018, [submission no. 20], p.
1.
[73]. A
Norton and I Cherastidtham, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 11], February 2018, p. 3.
[74]. University
of Canberra, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 9], 27 February 2018.
[75]. Equity
Practitioners in Higher Education Australasia (EPHEA), Submission,
op. cit., p. 1.
[76]. Science
and Technology Australia, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 10], 27 February 2018, p. 4.
[77]. Bond
University, Submission
to Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 7], 26 February 2018, p. 2–3.
[78]. University
of Melbourne, Submission to Senate Education
and Employment Legislation Committee, Inquiry into the Higher Education
Support Legislation Amendment (Student Loan Sustainability) Bill 2018
[provisions], [submission no. 12], 27 February 2018, p. 4.
[79]. Bond
University, Submission
to Senate Education and Employment Legislation Committee, op. cit., p. 3.
[80]. Explanatory
Memorandum, Higher Education Support Legislation Amendment (Student Loan
Sustainability) Bill 2018, p. 2.
[81]. The
Statement of Compatibility with Human Rights can be found at pages 3–7 of the Explanatory
Memorandum to the Bill.
[82]. A
Norton, HELP
for the future: fairer repayment of student debt, Grattan
Institute, March 2016. The Higher
Education Support Legislation Amendment (A More Sustainable, Responsive and
Transparent Higher Education System) Bill 2017, which was replaced by the
current proposal, proposed to add a one per cent repayment rate at $42,000
increasing the rate by increments of 0.5 per cent approximately every $3,000 to
a maximum of 10 per cent at $119,882.
[83]. NATSEM,
Smart
Australians: education and innovation in Australia, AMP NATSEM Income
and Wealth Report, 32, October 2012.
[84]. Australian
Bureau of Statistics (ABS), Characteristics of
Employment, Australia, cat. no. 6333.0, ABS, Canberra, 2017. See Table
6.1 EMPLOYEES (excluding OMIEs) IN MAIN JOB: Median weekly earnings in main job—Industry
and occupation of main job—By level of highest non-school qualification.
[85]. K
Andrews (Assistant Minister for Vocational Education and Skills), Completion
rates on the rise under VET Student Loans, media release,
13 February, 2018.
[86]. Social
Research Centre, ‘2017
Graduate outcomes survey: national report’, QILT website, January 2018, pp.
ii–iii.
[87]. Ibid.,
p. v.
[88]. Ibid.,
p. vi.
[89]. A
Norton, Mapping
Australian higher education 2016, Grattan Institute, August
2016, p. 82.
[90]. Ibid.,
pp. 80–1.
[91]. Higher
education equity programs funded through the Education and Training portfolio
recognise the following groups: people from low socioeconomic backgrounds;
people with disability; Aboriginal and Torres Strait Islander people; people
from rural and remote areas; people from a non-English speaking background and;
women in non-traditional areas of study. I Li, S Mahuteau, A Dockery, P
Junankar and K Mavromaras, Labour
market outcomes of Australian university graduates from equity groups,
Report submitted to the National Centre for Student Equity in Higher Education
(NCSEHE), Curtin University, Perth, 2016.
[92]. B
Chapman and C Ryan, Income-contingent
financing of student charges for higher education: assessing the Australian
innovation, Discussion paper, 449, Centre for Economic Policy Research,
May 2002.
[93]. B Cardak and C Ryan, Why are high ability individuals from poor backgrounds
under-represented at university?, Discussion paper
No. A06.04, La Trobe University, School of Economics, June 2006.
[94]. Deloitte
Access Economics, The impact of
changes to student contribution levels and repayment thresholds on the demand
for higher education, DEEWR, Canberra, August 2011.
[95]. DET,
‘2016 Appendix 2 – Equity
groups’, Higher Education Statistics, DET website, last modified 30
November 2017; ABS, Education
and work, Australia, cat. no. 6227.0, ‘Table 29 Highest non-school
qualification: Bachelor Degree level or above, By age and sex, 1982 to 2017’,
ABS, Canberra, 2017.
[96]. Norton,
HELP
for the future: fairer repayment of student debt, op. cit., p.
23.
[97]. DET,
Submission,
Senate Education and Employment Legislation Committee, Inquiry into the
Higher Education Support Legislation Amendment (Student Loan Sustainability)
Bill 2018 [provisions], [submission no. 32], p. 7.
[98]. ATO,
‘HELP,
SSL, ABSTUDY SSL, TSL and Financial Supplement indexation rates’, ATO
website, 9 May 2017.
[99]. Social
Research Centre, ‘2017
Graduate outcomes survey: national report’, op. cit., pp. ii–iii.
[100]. This
is further discussed in M Warburton, ‘Five
things senators (and everyone else) should know about changes to HELP debts’,
The Conversation, 9 October 2017.
[101]. ATO,
‘Medicare
levy reduction—family income’, ATO website, last modified 29 June 2017.
[102]. ATO,
‘Medicare
levy reduction—family income’, ATO website, op. cit. This is further discussed
in M Warburton, ‘Five
things senators (and everyone else) should know about changes to HELP debts’,
op. cit. Additionally, in instances of serious financial hardship (when payment
would leave a debtor unable to provide food, accommodation, clothing, medical
treatment, education or other necessities for themselves, their family or other
people that they are responsible for) or other special reasons (for example
natural disasters, death or serious illness in the family requiring travel),
HELP debtors can apply to the ATO to defer a compulsory repayment or the levy
paid by overseas debtors. ATO, ‘Deferring
your compulsory repayment or overseas levy’, ATO website, 1 July 2017.
[103]. Section
154-25 is in Part 4-2 of HESA.
[104]. For
example, the student services and amenities fee in section 19–37, the FEE-HELP
limit currently in section 104–20 (which this Bill would repeal and replace
with the HELP limit), and the OS–HELP borrowing limits under sections 121–5 and
121–15.
[105]. Different
methods of indexation are used for the indexing of accumulated HELP debts under
sections 140–10 and 140–15, and for the indexing of HELP repayment thresholds
under section 154–25.
[106]. Norton,
HELP for the future: fairer repayment of student debt, op. cit., p. 7.
[107]. Overseas
debtor arrangements for HELP and TSL commenced from 1 July 2017. More
information about current arrangements is available at ATO, ‘HELP
and TSL overseas obligations’, ATO website, last modified 12 February 2018.
The introduction of these arrangements is discussed in more detail in J Griffiths,
Education
Legislation Amendment (Overseas Debt Recovery) Bill 2015 [and] Student Loans
(Overseas Debtors Repayment Levy) Bill 2015, Bills digest, 43, 2015–16,
Parliamentary Library, Canberra, 2015.
[108]. A
Student Learning Entitlement (SLE) was introduced in HESA in January
2005, limiting access to Commonwealth supported places to seven years of
full-time or equivalent study. Higher Education
Support Act 2003, ‘Part 3–1—Student learning entitlement’. The SLE
limit was removed in January 2012 in the Higher Education
Support Amendment (Demand Driven Funding System and Other Measures) Act 2011.
[109]. DET,
‘FEE-HELP’,
StudyAssist website.
[110]. P
Dawkins, ‘Can
the government realistically cut funding by 20% for each student in higher
education?’ Mitchell Institute, 13 July 2016.
[111]. DET,
‘Instituting a combined loan
limit for HECS-HELP, FEE-HELP, VET FEE-HELP and VET student loans’, DET
website, 18 December 2017, p. 1.
[112]. Macquarie
University, ‘Fees
and scholarships’, Macquarie University website. A number of examples of
other courses with fees above the cap are provided in Senate Education and
Employment Legislation Committee, Higher Education Support Legislation
Amendment (Student Loan Sustainability) Bill 2018 [provisions], Answers to
Questions on Notice, Education and Training Portfolio, Committee Inquiries
2017–18, Question
SQ18-000024, March 2018, p. 3.
[113]. Australian
National University (ANU), ‘Master of Laws’,
ANU website.
[114]. The
Census date is part-way through the study period and is the point at which the
student is charged for the unit of study.
[115]. Re-crediting
is dealt with in HESA under sections 104–25, 104–27, 104–42, 104–43 or
104–44 for FEE-HELP, and clause 46, 46A, 47, or 51 of Schedule 1A to HESA
for VET FEE-HELP.
[116]. Warburton,
Resourcing
Australia’s tertiary education sector, op. cit., pp. 33–4.
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