Purpose of the Bill

The purpose of the Education Legislation Amendment (2022 Measures No. 1) Bill 2022 (the Bill) is to amend the Higher Education Support Act 2003 (the HESA) to implement the following range of measures:

• Require students to provide their unique student identifiers (USIs) to their higher education provider and the Secretary as a prerequisite to receiving Commonwealth assistance under the HESA. This amendment also allows for the standardisation of student identification under a USI enabling the phasing out of the previous identifier, the Commonwealth Higher Education Student Support Number. This will also enable simplified data reporting and give effect to the 2019–20 Budget commitment to extend the student identifier scheme to higher education (Part 1 of Schedule 1).[1]
• Establish that enabling or pathway courses are not counted as part of the Student Learning Entitlement (SLE) under the HESA. The SLE is a lifetime limit on the amount of Commonwealth support a student may receive as part of a Commonwealth supported place (CSP) (Part 2 of Schedule 1).
• Make microcredential course students eligible for FEE-HELP (Part 3 of Schedule 1).
• Extend the FEE-HELP loan fee exemption to 31 December 2022. This was a COVID-19 relief measure designed to mitigate the impacts on students by reducing student loan amounts and encouraging students to take up FEE-HELP study during the global pandemic (Schedule 2).
• Require New Zealand citizens occupying a Commonwealth supported place to be resident in Australia during their studies to be eligible for HECS-HELP and FEE-HELP (Schedule 3).
• Abolish the discount of up to 10 per cent for students paying up front course fees (Schedule 4).

The Bill also makes minor technical amendments to the Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act).

Commencement

The Bill comprises four Schedules which are subject to differing commencement dates:

• Schedule 1 amends the HESA and the TEQSA Act. The amendments commence on the day after Royal Assent.
• Schedule 2 contains amendments which commence on 1 January 2022.
• Schedule 3 amends the HESA. The amendments commence on 1 January 2023.
• Schedule 4 contains other amendments to the HESA. If the Act receives Royal Assent before 31 December 2022, the amendments will commence on 1 January 2023. However, if the Act receives Royal Assent on, or after, 31 December 2022 then the amendments in Schedule 4 commence on the day after Royal Assent.

Background

Student identification

Currently there exist two ways in which higher education students’ identification may be recorded: under a Unique Student Identifier (USI) or under a Commonwealth Higher Education Student Support Number (CHESSN).

The amendments proposed by the Bill will support the use of the USI as the single student identifier, which should give the government a more accurate picture of the Australian higher education system student body by virtue of having a fuller record and a single identifier type for monitoring and reporting.

Enabling courses

The Minister for Education, Jason Clare, delivered a speech on 6 July 2022 to the attending Vice Chancellors and other senior university staff at the Universities Australia 2022 Gala Dinner.[2] This was the new Minister’s first opportunity to outline what would be his approach to higher education. Minister Clare’s speech was peppered with anecdotes and references to the power of education in transforming lives and, in particular, the lives of disadvantaged peoples.

It is, therefore, not surprising that legislative changes proposed by the Bill include supporting people to complete enabling courses at higher education institutions. The measure ensures that those who undertake enabling courses, which are pathways to further study, are not penalised by having these courses count toward their lifetime study allowance in a Commonwealth supported place (CSP). This then allows students to continue on their path to obtaining qualifications without having the impediment of paying up front fees for one or more enabling courses.

Disadvantaged groups face a range of barriers to completing higher education qualifications. Data for Indigenous university students show that completion rates lag well behind non-Indigenous students coming in at 49.4 per cent and 72.2 per cent, respectively.[3]

Microcredentials

Previous government

Microcredentials to address skills shortages was a policy of the previous Government. This policy, a part of the broader Job-Ready Graduates Package (JRG), aimed to provide support for short retraining courses as a means of filling skills shortage in areas including teaching, health, science, information technology and agriculture.

A National Microcredentials Framework (NMF) was published in November 2021, which describes how the microcredentials policy would work in practice. The NMF defines a microcredential as follows:

A microcredential is a certification of assessed learning or competency, with a minimum volume of learning of one hour and less than an [Australian Qualifications Framework] AQF award qualification, that is additional, alternate, complementary to or a component part of an AQF award qualification.[4]

As well as providing a definition for microcredentials the NMF also establishes:

• agreement on unifying principles for microcredentials
• critical information requirements
• a minimum standard for microcredentials that will sit on the Microcredentials Marketplace.[5]

Current Government

The microcredentials amendment follows on from the previous Government’s work by extending FEE-HELP eligibility under the Act to microcredential courses. Previously, short courses provided by higher education providers were not eligible for FEE-HELP.

This will further encourage higher education providers to deliver microcredential short courses, which the Government intends will help people retrain in another occupation to bolster occupations where there are labour and skills shortages.

Skills shortages and workforce productivity were key features at the Jobs and Skills Summit, held at Parliament House 1–2 September 2022.[6] From here the Government is in the process of developing its Employment White Paper where it will consider input from external stakeholders and bring together its own policy, including addressing the role of education and training in labour force optimisation.

Related to this, the Government is in the process of developing a Universities Accord, which has been described by Tanya Plibersek (when she was Shadow Education Minister) as follows:

The accord would be a partnership between universities and staff, unions and business, students and parents, and, ideally, Labor and Liberal, – that lays out what we expect from our universities.

…

The aim of an accord would be to build consensus on key policy questions and national priorities in a sober, evidence-based way, without so much of the political cut and thrust. Building that consensus should help university reform stick.[7]

It is anticipated that, through this Accord, new higher education policy will be forged, together with the sector’s representatives including Universities Australia, the Group of Eight, and Regional Universities Network.

Other measures

One other measure included in the Bill is the removal of the up to 10 per cent discount for CSP students paying course fees up front.[8] This will create cost savings, estimated at around $140 million over the forward estimates (2022–2023 to 2025–2026), and is intended to place all students on the same footing regarding fee payment.

Committee consideration

At its meeting of 27 October 2022, the Senate Standing Committee for the Selection of Bills deferred consideration of the Bill to its next meeting.[9]

Senate Standing Committee for the Scrutiny of Bills

At the time of writing this Bills Digest, the Senate Standing Committee for the Scrutiny of Bills had not made any comment on the Bill.

Policy position of non-government parties/independents

At the time of writing this Bills Digest no comments about the content of the Bill by Members and Senators of non-government parties or independents had been identified.

Position of major interest groups

Fee help for microcredential courses

The Bill would amend the HESA to enable government loans through FEE-HELP to be applied to select microcredentials, eligible through a microcredential pilot program.[10] Universities Australia has previously called for the removal of financial barriers impeding the uptake of short courses and microcredentials. In a publication released prior to the Jobs and Skills Summit in September 2022, Universities Australia called for the extension of FEE-HELP to ‘anyone undertaking short courses and microcredentials in critical areas of skills shortage’.[11]

Speaking at the Australian Financial Review Higher Education Summit in August 2022, University of Queensland Chancellor, Peter Varghese, said ‘… bringing short courses under some form of HECS arrangement is very important’, explaining that ‘Giving people an opportunity at different points in their career to come back for short periods – because they can’t afford long periods, frankly – and renew their skills I think is hugely important’.[12]

Concern over the purpose and quality of microcredentials has previously been raised by the National Tertiary Education Union, which, in its submission to the 2019 Australian Qualifications Framework (AQF) Review (which considered extending the AQF to cover microcredentials), commented that:

… There are also questions as to the relative value of microcredentials – if they are to be recognised for the purposes of credit for prior learning, or as ‘stackable’ qualifications towards a recognised qualification, then there may be an argument in favour of recognising micro credentials so that the appropriate weight may be given in credentialing. However, if the micro-qualifications are to be ‘stand‑alone’ offerings, the Union has serious concerns as to their worth and their potential to be misused.[13]

A more pointed criticism likens microcredentials to an unfavourable economic condition:

…micro-credentials are gig credentials for the gig economy…They accelerate the transfer of the costs of employment preparation, induction, and progression from governments and employers to individuals. [14]

The Independent Tertiary Education Council Australia (ITECA) outlines another limitation with microcredentials in that they are limited to those courses provided by universities rather than also including Registered Training Organisations (RTOs). This removes a large part of the training workforce that could deliver microcredentials.

Discount for upfront payment

There has also been some support from student bodies in relation to the removal of the 10 per cent HECS-HELP discount. In response to the October 2022­–23 Budget, University of Sydney Student Council President, Lisa Perkins, agreed with the removal of the discount, while calling for changes to Youth Allowance, saying ‘That discount mostly impacts students who come from really wealthy backgrounds, so I completely see why they would take that money away and put it towards helping disadvantaged students’.[15]

Financial implications

According to the Explanatory Memorandum to the Bill:

The Bill is expected to lead to revenue gain.

The FEE-HELP loan fee exemption extension is estimated to have a cost of $81.3 million in fiscal balance terms over the period 2021-22 to 2025-26 and an underlying cash impact of $0.6 million over the same period.

The FEE-HELP component of the microcredentials measure is estimated to have a cost of $5.2 million in fiscal balance terms over the period 2021-22 to 2025-26 and an underlying cash impact of $0.0 million over the same period.

The cessation of the HECS-HELP discount measure is estimated to provide a saving of $138.1 million in fiscal balance terms over the period 2022-23 to 2025-26 and an underlying positive cash impact of $144.1 million over the same period.

Other measures will not have a financial impact.[16]

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.[17]

Parliamentary Joint Committee on Human Rights

At the time of writing this Bills Digest the Parliamentary Joint Committee on Human Rights had not commented on the Bill.

Key issues and provisions

Student identification

Item 3 of Part 1 in Schedule 1 to the Bill inserts proposed subsections 36-10(2C) and 36-10(2D) into the HESA to impose the new student identifier requirements. Under proposed subsection 36-10(2C) a person will meet the student identifier requirements provided that, before the census date, the person has a student identifier and has notified an appropriate officer of the higher education provider and the Secretary of that identifier. Proposed subsection 36-10(2D) allows for the relevant notification to be given as part of the process of requesting Commonwealth assistance in relation to a unit or a course of study. Item 1 amends paragraph 36-10(1)(f) so that a higher education provider must not advise a person that he, or she, is a Commonwealth supported student in relation to a unit of study unless the person meets the student identifier requirements.

Part 1 of Schedule 1 to the Bill makes near equivalent changes as follows:

• items 4 and 5 of Part 1 of Schedule 1 to the Bill amend section 104-1 of the HESA so that a person will not be entitled to FEE-HELP assistance if they do not meet the student identifier requirements
• items 6 and 7 amend section 118-1 and insert proposed section 118-12 of the HESA (respectively) so that a person will not be entitled to OS-HELP assistance unless they meet the student identifier requirements
• items 8 and 9 amend section 126-1 and insert proposed section 126-10 of the HESA (respectively) so that a person will not be entitled to SA-HELP assistance unless they meet the student identifier requirements.

Enabling courses

Section 70-1 of the HESA summarises Part 3-1 of the HESA, which deals with the Student Learning Entitlement. It explains that a person may be entitled to HECS-HELP assistance for a unit of study for which the person is a Commonwealth supported student if, among other things, the unit is covered by the person’s Student Learning Entitlement.

A person will start with an SLE amount that is equivalent to seven years of full-time study. However, the person’s SLE amount may be added to for the purposes of certain courses of study or in certain circumstances. A person’s SLE amount is reduced as the person undertakes units of study as a Commonwealth supported student.

Item 11 of Part 2 of Schedule 1 to the Bill amends section 70-1 of the HESA to reflect the amendment made by item 12 to section 76-1 (which provides for the reduction of a person’s SLE amount) so that a unit of study undertaken as part of an enabling course does not reduce the person’s SLE amount.

Microcredential courses

Key provisions

Item 16 of Part 3 of Schedule 1 to the Bill inserts the definition of microcredential course into the dictionary in Schedule 1 of the HESA. The term microcredential course means a course of instruction that consists of one or more units of study and meets the requirements specified in the FEE-HELP Guidelines. Item 14 inserts proposed subparagraph 104-10(1)(b)(ia) into the HESA so that domestic students undertaking a unit of study that forms part of a microcredential course are eligible for FEE-HELP.

Discount for upfront payments

The amendments in Schedule 4 to the Bill amend the HESA to remove the 10 per cent discount on up-front payments. It does this in two ways.

First, under existing section 36-50 of the HESA a higher education provider must not accept up‑front payments in relation to a unit of study totalling more than 90 per cent of the person’s student contribution amount for that unit if the student is entitled to HECS-HELP assistance for the unit. Item 4 of Schedule 4 to the Bill repeals this section so that a higher education provider ‘must be able to accept up-front payments totalling 100 per cent of the person’s student contribution amount for a unit of study’.[18]

Second, items 7 and 8 amend section 93-15 which deals with upfront payments. In particular, subsection 93-15(3) is repealed. According to the Explanatory Memorandum, ‘this subsection is removed as, due to the removal of the up-front discount, payments made in relation to a unit of study should be an up-front payment even where the sum of the payment or other payments exceeds 90 per cent of the student contribution amount’.[19]

Concluding comments

The key issue arising from the amendments in the Bill is whether fee assistance to those persons undertaking microcredential courses will solve—or go some way towards solving—the problem of skills shortages.

It is unclear what types of qualifications are being proposed. Indeed, in some respects a microcredential course does not exist by that name. There are courses shorter in nature and more about the ‘how’ rather than the ‘why’, but the linkage of such courses to major qualifications, such as teaching and nursing where there exist staff shortages, is unclear.

The Government is in the process of developing its Employment White Paper in which it will respond to/incorporate input from external stakeholders and bring together its own policy development to address the role of education and training in labour force optimisation.