Purpose of the Bill

The main purposes of the Education Legislation Amendment (2022 Measures No. 1) Bill 2022 (the Bill) are to amend the Higher Education Loan Program (HELP) provisions in the Higher Education Support Act 2003 (HESA) to:

• provide for HELP debt and indexation forgiveness for doctors and nurse practitioners who work outside city areas (Schedule 1, Part 2)[1]
• extend the FEE-HELP loan fee exemption to cover the 2022 calendar year (Schedule 2)
• extend access to FEE-HELP loans to microcredential courses at approved providers (Schedule 3)
• bring residency requirements for New Zealand citizens for HECS-HELP and FEE‑HELP into line with those currently in place for Commonwealth supported places (CSPs) (Schedule 4).

The Bill also contains a number of largely administrative amendments, which are not detailed in this Bills Digest.

Background

HELP provides loans to higher education students through four sub-schemes:

• HECS-HELP enables students in CSPs (predominantly undergraduate university students) to defer the cost of their student contribution amounts
• FEE-HELP enables full fee-paying students (predominantly postgraduate university students and students studying at non-university higher education providers) to defer their fees
• SA-HELP enables students to defer the cost of the student services and amenities fee (SSAF), which covers certain student services and amenities of a non-academic nature
• OS-HELP enables students in CSPs to defer the cost of certain overseas study expenses.[2]

Generally, these loans are only available to Australian citizens, New Zealand Special Category Visa holders, and permanent humanitarian visa holders who meet residency requirements.[3]

Eligible students are able to borrow up to the HELP loan limit, which in 2022 is $156,847 for Medicine, Dentistry and Veterinary Science courses leading to initial registration, or eligible Aviation courses, and $109,206 for all other courses.

Once a person’s repayment income reaches a minimum threshold, they are required to make repayments through the Australian Taxation Office.[4] In 2021–22, the minimum repayment threshold is $47,014, and repayment rates range from 1.0% (at $47,014 to $54,282) to 10% at $137,898 and above.[5]

Each year on 1 June, any debt that has been outstanding for at least 11 months is indexed in line with the consumer price index (CPI).[6]

Although students can pay for courses up front rather than using HELP, very few do—in 2020, 90.7% of students liable to pay a student contribution used HECS-HELP, and 73.4% liable to pay a course fee used FEE-HELP (measured in equivalent full-time students).[7] Uptake of each sub‑scheme is provided in Table 1 below.

Table 1: HELP uptake by sub-scheme, 2020

Source: Department of Education, Skills and Employment (DESE), 2020 Section 5 Liability status categories, 14 February 2022, Table 7.

Note: Student numbers in this table should not be summed. Students often use more than one sub-scheme in a year.   

Committee consideration

Senate Standing Committee for the Selection of Bills

At the time of writing, the Senate Standing Committee for the Selection of Bills had not considered the Bill.[8]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills Committee (Scrutiny of Bills Committee) has raised concerns about the significant matters dealt with in delegated legislation in Schedules 1 and 3 of the Bill.[9]

Specifically, the Scrutiny of Bills Committee expressed concerns about:

• certain criteria for health practitioners wishing to have their HELP debt and indexation reduced being dealt with in Guidelines and
• requirements for microcredentials being specified in the FEE-HELP Guidelines.[10]

The Scrutiny of Bills Committee sought advice from the Minister on why this is the case and whether at least high-level guidance regarding these matters can be included in HESA.[11]

Policy position of non-government parties/independents

At the time of writing, no comments on the Bill from non-government parties/independents were located.

Position of major interest groups

Comments about the Bill have so far focused on the proposal to reduce HELP debts for health practitioners. Despite widespread support, many major interest groups have identified that health workforce issues are likely to persist despite the measure.

The Australian Medical Association has welcomed the program but cautioned the initiative must be coupled with a ‘strong rural training pathway’ and employment model.[12]

Peta Rutherford, CEO of the Rural Doctors Association of Australia, has been reported as saying the initiative will make regional, rural and remote areas more attractive places to work for junior doctors, but:

It really is about ensuring that the government's strategies recognise the full scope of practice of rural GPs and rural generalists and ensuring that they get a fair remuneration package …

But also looking at some of the social elements that go with working in a rural community as a doctor. Often that has impacts in relation to children's education or partner employment.[13]

Megan Belot, president of the same association, has also been reported as saying one strength of the program is that doctors with exposure to non-metropolitan locations often choose to stay longer than they initially intended, once exposed to the work.[14] However, she cautions that the program also has the potential to create unintended incentives for doctors to leave remote locations in favour of rural towns.[15] This may be addressed by distinguishing between rural and remote locations, as discussed in the issues and provisions section of this Bills Digest.  

The Australian College of Nurse Practitioners stated:

Despite the recognised incentive that funding for education would create, there are numerous barriers to practice for Nurse Practitioners in all areas of Australia. However, in rural and remote Australia, these are significantly exacerbated. Whilst we fully support the plan to address university debt, without removing the existing government-constructed barriers to practice, it will still not be possible to attract more Nurse Practitioners in any significant numbers. These barriers and their solutions were already identified addressed [sic] as part of the MBS review by the Nurse Practitioner Reference Group and supported by the KPMG report commissioned as part of the process. However, none of these recommendations were accepted or implemented by government, and it seems there is still no intention to do so.[16]

Financial implications

The Explanatory Memorandum to the Bill states that three of the proposed measures will have a financial impact. Between 2021–22 and 2025–26, the Government estimates that these measures will cost:

• $81.3 million to extend the FEE-HELP loan fee exemption
• $78.5 million to reduce HELP debts for health practitioners and
• $5.2 million to extend access to FEE-HELP to microcredentials.[17]

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.[18]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights considered the Bill and noted the concerns it previously raised in relation to the Education Legislation Amendment (2020 Measures No. 1) Bill 2020.[19] These relate to the unique student identifier, which is not one of the main elements of this Bill.[20]  

Key issues and provisions

Schedule 1 Part 2: HELP debt and indexation waivers for health practitioners

Access to health practitioners

Unequal access to health practitioners in non-metropolitan areas is a long-running issue in Australia. Analysis of health workforce data by the Australian Institute of Health and Welfare shows consistent disparities in the number of full-time equivalent practitioners per 100,000 people in regional and remote areas, versus major cities.[21] In 2018 (the latest year covered by this analysis), for every 100,000 people living in an inner regional area, the equivalent of 288 full-time medical practitioners, and 1,005 full-time nurses and midwives were practicing, compared with 395 full-time medical practitioners, and 1,030 full-time nurses and midwives in major cities.[22]

The Medical Deans Australia and New Zealand survey finds that of final year students wishing for a future career working in Australia, just under 35% preferred work outside of capital cities.[23] Similarly, around 30% of nurse practitioners work in rural or remote locations.[24]

HELP debt forgiveness

HELP debt forgiveness for doctors and nurse practitioners who practice in rural, remote or very remote areas was announced as part of a package of rural health workforce measures in December 2021.[25] The initiative builds on the Stronger Rural Health Strategy, which included a number of other measures to increase supply of rural health practitioners, including the Murray‑Darling Medical Schools Network and the Bonded Medical Program.[26]

The program reflects the regime currently in place for teachers in very remote areas, which was introduced in 2019.[27] While it is too early to assess the success of the program for teachers, historically, similar initiatives do not appear to have significantly shifted workers’ preferences. Instead, such programs have resulted in a windfall gain for individuals whose circumstances and preferences already align with policy goals.[28]

Health practitioner course costs and HELP repayments

Under current arrangements, HELP forgiveness could equate to a benefit of approximately $45,604 to $68,406 for students who studied medicine, and $7,970 for the nurse practitioners, based on 2022 student contribution amounts for CSPs.[29] Students who study on a full fee-paying basis usually pay higher fees.

In 2018–19, those who had studied medicine were estimated to take an average of 10.5 years to repay their HELP debt (the longest repayment time of any field), while those who had studied nursing repaid in an average of 7.7 years (the shortest repayment time).[30]

Broadly, these repayment times correspond with the size of the debts, with medical students incurring the largest amount per year of any field, and nursing students the smallest.[31] However, those who study courses with a clear vocational outcome, such as medicine or nursing, also have the best repayment track records, with 82.5% of people who studied medicine and 67.8% of people who studied nursing having fully or partly repaid their HELP debt in 2018–19.[32] This contrasts with 40.0% of those who studied creative arts, who have the lowest likelihood of repayment.[33]

Location-preferred HELP debtors—health practitioners amendments

Item 39 of the Bill inserts proposed Division 144, containing the substantive details of HELP debt and indexation reductions for health practitioners.

Consequential amendments are at items 1 to 38, 40 to 44, 46 and 47. These ensure the programs for teachers and health practitioners can be administered separately and are not detailed below.   

Division 144 provides that a person is a location-preferred HELP debtor (health practitioner) if they satisfy all the below conditions:

• they have completed a course of study in medicine, or a course of study allowing registration as a nurse practitioner, as specified by the HELP Debtor Guidelines (Health Practitioners), or another course of study specified in the Guidelines[34]  
• they incurred a HECS-HELP or FEE-HELP debt in relation to the course[35]
• they are registered or accredited and carry out work as provided in the Guidelines[36]
• the work they carry out is in an area specified by the Guidelines by reference to the ABS Remoteness Structure, as rural, remote, or very remote[37]
• the number of hours carried out is at least as much as specified in the Guidelines[38] and
• they satisfy any other conditions specified in the Guidelines.[39]

The Guidelines are anticipated to cover the scope of work, geographical location, and time periods relevant to the program.[40] They are to be made by the Minister, following consultation with the Treasurer.[41] As discussed earlier in this Digest, the Scrutiny of Bills Committee has raised concerns about these significant issues being dealt with in the Guidelines, and asked if it would be possible to include high-level guidance on these matters in HESA.[42] In this context, it is also notable that item 45 amends section 238-10 to allow the Guidelines to may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, any matter contained in any other instrument or other writing as in force or existing from time to time. The Scrutiny of Bills Committee has previously raised general concerns about incorporation provisions, citing, for example, the potential for changes being made without Parliamentary scrutiny, uncertainty in the law, and limited access to incorporated documents.[43]

The Secretary (currently of the Department of Education, Skills and Employment, DESE) is to be the decision-maker for applications to the program.[44]

If a person makes an application and meets the requirements above for periods totalling at least the minimum time specified in the Guidelines, the Secretary will be required to determine that their accumulated HELP debt be reduced.[45] The reduction is to be for the relevant course of study only, up to an amount for the course type to be specified in the Guidelines.[46] It will be possible for the debt to be reduced to less than zero, in which case the extra amount must be refunded.[47]

The Secretary will also be required to determine that the indexation of a person’s HELP debt is reduced if the person:

• is a location-preferred HELP debtor (health practitioner) at any time in the calendar year
• has an outstanding HELP debt at 1 June (this is the date indexation is applied each year) and
• has met any other requirements specified in the Guidelines.[48]

The reduction (if any) will be in proportion to the number of days in the calendar year that the person was a location-preferred HELP debtor (health practitioner), as determined by the Secretary.[49]

An application form will be specified for both HELP reduction and indexation, and applications may not be considered if they do not meet the specified requirements.[50] An applicant is entitled to a written response outlining the decision within 60 days, or up to six months if determined by the Secretary in writing, but the application is taken to be rejected if the person is not notified of an outcome within the required timeframe.[51]

Additional program information

The Department of Health has provided additional information about the program, which includes some of the details likely to be specified in the Guidelines. According to this information, health practitioners will be able to apply for:

• a pause on all HELP indexation for the duration of the time they are working in an eligible location and
• forgiveness of 50% to 100% of eligible outstanding HELP debt, based on a combination of remoteness and time worked.[52] 

Eligibility commenced from 1 January 2022, with applicants required to work at least 24 hours per week.[53] In order to have 100% of the relevant HELP debt forgiven, those in a Modified Monash Model 6 to 7 location (remote and very remote communities) are required to work for half the length of course, and those in a 3 to 5 location (small, medium, and large rural towns) are required to work for the full length of the course.[54]

Schedule 2: FEE-HELP loan fee exemption

HESA imposes a loan fee of 20 per cent if a person uses FEE‑HELP for an undergraduate degree at a non-university higher education provider or an Australian branch of an overseas university.[55]

The fee does not apply to:

• any postgraduate students, who are the majority of FEE-HELP users[56]
• students in CSPs (including most undergraduate students at public universities), who use HECS‑HELP, which does not attract a loan fee[57]
• students at other Australian universities (Bond University, University of Divinity and Torrens University Australia, referred to as ‘Table B providers’ in HESA).[58]

This means the loan fee applies to a relatively small proportion of students—approximately 2.8% (31,444) of the 1.1 million domestic students enrolled in higher education courses in 2020.[59] Generally, these are students studying at specialist non-university higher education providers—for example, at the SAE Institute, which provides industry-engaged creative media courses in areas such as games development, animation, and film. 

As part of the Government’s response to the COVID-19 pandemic, the FEE-HELP loan fee was waived between 1 April 2020 and 31 December 2021.[60]

Items 1 and 2 of Schedule 3 of the Bill amend subsection 137-10(2) of HESA with the effect of extending the exemption for a further 12 months, until 31 December 2022.[61]

Schedule 3: FEE-HELP loans for microcredentials

Microcredentials have been an increasing area of interest in post-secondary education policy and practice in recent years. Despite having no agreed definition, these short courses are widely supported as a way to support rapid skills development, and are often seen as cheaper, and more responsive to employers’ needs.[62] 

The 2019 Australian Qualifications Framework (AQF) Review considered shorter form credentials, including microcredentials in detail. The AQF regulates qualifications in Australian education and training by setting out qualifications in a single national framework.[63]

The AQF Review defined microcredentials as:

a certification of assessed learning that is additional, alternative, and complementary to or a component part of a formal qualification.[64]

The AQF Review included microcredentials in several of its recommendations, identifying that revisions should enable better definition and recognition of these forms of learning.[65] The Government has accepted the recommendations of the AQF Review in December 2019.[66] In 2021, the University-Industry Collaboration in Teaching and Learning Review revisited the issue of microcredentials and reiterated that the Recommendations of the AQF Review should be implemented.[67]

So far, the most direct response to the AQF Review in relation to microcredentials has been funding for a National Microcredential Marketplace, which was announced in June 2020.[68] In 2021, it was announced that the (New South Wales) Universities Admissions Centre would build the marketplace.[69] Undergraduate Certificates (normally made up of four subjects and completed in six months full-time study) were also added to the AQF in May 2020 as part of the Government’s response to COVID-19.[70]

Currently, reference to the AQF is used in HESA to control access to HELP, which can only be used for a unit (often referred to as a subject) that is either an enabling course, or of a type included in the AQF.[71] Well-recognised qualifications such as Bachelor Degrees and Graduate Certificates are included in the AQF, while courses below certificate level or equivalent are not.[72]

Items 1 and 2 of Schedule 3 propose to amend section 104‑10, which deals with course requirements for FEE-HELP, as well as the definition of course of study in the dictionary in Schedule 1, to explicitly include microcredential courses as allowable courses for FEE-HELP.[73]

Item 3 inserts a definition of microcredential course into the dictionary, encompassing courses that consist of one or more units of study and meet requirements specified in the FEE-HELP Guidelines (currently the FEE-HELP Guidelines 2017), which are made by the Minister under section 238-10. The Scrutiny of Bills Committee has raised concerns about the use of the FEE-HELP Guidelines in this way, and asked if it would be possible to include high-level guidance in HESA.[74]

Some indication of the Government’s intended approach is available in the National Microcredentials Framework which was released on 22 March 2022.[75]

The framework defines microcredentials as a certification of assessed learning or competency, with a minimum volume of learning of one hour and less than an AQF award qualification, that is additional, alternate, complementary to or a component part of an AQF award qualification.[76]

This suggests a national approach to microcredentials will not include learning where attendance is the only requirement (that is, assessment must be provided as part of a microcredential), and that microcredentials are not to be added to the AQF.  

Schedule 4: HECS-HELP and FEE-HELP residency requirements for New Zealand citizens

Schedule 4 of the Bill makes changes to the residency requirements for New Zealand citizens using HECS-HELP and FEE-HELP.

Currently, both the HECS-HELP and FEE-HELP provisions require that a New Zealand Citizen:

• hold a special category visa under the Migration Act 1958
• first began to be usually resident in Australia at least 10 years before they first apply for Commonwealth assistance for their course
• was a dependent child when they first began to be usually resident in Australia
• has been in Australia for a period of, or for periods totalling, 8 years during the 10 years immediately before applying for assistance
• has been in Australia for a period of, or for periods totalling, 18 months during the 2 years immediately before the test day and
• undertake at least one unit of study within Australia.[77]

Items 1 and 2 of Schedule 4 amend section 90-5, which deals with HECS-HELP. Items 3 and 4 amend section 104-5, which deals with FEE-HELP. Amendments to both sections are in the same terms.

Proposed paragraph 90-5(2A)(a) and proposed paragraph 104-5(2A)(a) impose a new requirement that a New Zealand citizen who otherwise meets the current eligibility requirements must also be ‘resident in Australia for the duration of the unit’ in order to be eligible to defer their course fees using HECS-HELP or FEE-HELP.

Proposed subsection 90-5(2AA) and proposed subsection 104-5(2AA) specify that any period outside Australia that ‘cannot reasonably be regarded as indicating an intention to reside outside Australia for the duration of the unit’, or ‘is required for the purpose of completing a requirement of that unit’ should be disregarded for the purposes of determining if the person meets the residency requirements. 

These requirements are consistent with the eligibility requirements for CSPs in section 36-10.[78]

The Bill makes no changes to residency requirements for other HELP sub-schemes:

• OS-HELP does not require students to be resident, as the program supports overseas study, although students must be Commonwealth supported prior to applying, which does require residency[79]
• SA-HELP also does not require residency—the SSAF is payable on a single day, and eligibility relates to a person’s status on that day.[80] 

While students using HECS-HELP would already be subject to residency requirements associated with being Commonwealth supported, these amendments would reduce access for FEE-HELP students, who under current arrangements remain eligible when not resident, providing they complete at least one unit in Australia.

The application provisions at item 5 would implement the changes for units with a census date on or after January 2023.  

Concluding comments

The Bill includes four relatively minor changes to HELP, which taken together continue the Government’s efforts to incentivise study in areas of workforce need and industry engaged courses. FEE-HELP eligibility is both widened by incorporating microcredentials, and narrowed by restricting the scope for New Zealand citizens intending to complete part of a course outside Australia.  Point for referral.