Key points

• The Bill will amend the Higher Education Support Act 2003 to:
  • amend HELP indexation so that it is the lower of Consumer Price Index or the Wage Price Index, backdated to 2023
  • allow for Table A and Table B providers to apply for grants to make payments to students who are undertaking mandatory practicums as part of a course of study (the Commonwealth Prac Payment). It is expected that these payments will be means-tested and for priority areas (currently teaching, nursing, midwifery and social work)
  • establish a new Commonwealth Grant Scheme funding cluster for FEE-FREE Uni Ready courses
  • require higher education providers to distribute 40% of the Student Services and Amenities Fees they collect to student-led organisations
  • add Adelaide University as a Table A provider and remove the University of South Australia and University of Adelaide from the list, following their merger and the expected commencement of Adelaide University in 2026.
• The Bill fulfills a number of commitments made in the lead-up to the 2024–25 Budget and is a response to the Australian Universities Accord Final Report.
• Some stakeholders have criticised the extent of relief for students from these policies or a lack of detail on implementation. They have highlighted other relevant and unaddressed Universities Accord recommendations, such as reforming the Job-ready Graduates scheme and changing the date of HELP debt indexation.
• The Bill has been referred to the Senate Education and Employment Legislation Committee for inquiry and report by 3 October 2024. It has not yet been considered by any other Parliamentary committees.

Introductory Info

Date introduced: 15 August 2024
House: House of Representatives
Portfolio: Education
Commencement: Sections 1 to 3, Parts 1, 3 and 5 of Schedule 1, and Schedules 4 and 6 commence on Royal Assent. Parts 2 and 4 of Schedule 1 commence on 1 June 2025. Schedules 2 and 3 commence on 1 January 2025. Schedule 5 commences on the earlier of Proclamation, or 31 March 2026.

Purpose of the Bill

The purpose of the Universities Accord (Student Support and Other Measures) Bill 2024 (the Bill) is to respond to recommendations made in the Australian Universities Accord Final Report (the Accord) and fulfill commitments made in the lead-up to the 2024–25 Budget. It follows other responses to the Accord including the passage of the Higher Education Support Amendment (Response to the Australian Universities Accord Interim Report) Act 2023 and the introduction of the Education Services for Overseas Students Amendment (Quality and Integrity) Bill 2024.

Summary of the Bill

The Bill is comprised of 5 schedules, of which the first schedule contains 5 parts:

• Part 1 of Schedule 1 will change HELP debt indexation to be based on whichever indexation factor (resulting from the Higher Education Support Act 2003 (HESA) calculation method) is lower, using either the Consumer Price Index (CPI) or the Wage Price Index (WPI).
• Part 2 of Schedule 1 provides that from 1 June 2025, the HELP debt indexation factor will be determined by reference to the CPI or WPI numbers for the four quarters ending on 31 December, instead of the four quarters ending on 31 March. The shift to the earlier date is due to the timing of the release of WPI data, as the Explanatory Memorandum explains (p. 16). The indexation will also be backdated to 1 June 2023, meaning the WPI rate will be retrospectively applied to the 2023 and 2024 indexations, with the “refund” credited to remaining loans (or added to tax returns for those who would otherwise have cleared their debt).
• Through Parts 3 to 5, these changes to indexation will also apply to VET Student Loans, Australian Apprenticeship Support Loans, Student Start-up Loans, ABSTUDY Student Start-up Loans and the Student Financial Supplement Scheme (for more on these student loans, see the Parliamentary Library’s quick guide).
• Schedule 2 will require higher education providers to allocate a minimum of 40 per cent of their Student Services and Amenities Fee revenue to student-led organisations. The Bill proposes to define a student led organisation, based upon enrolled students constituting a majority of the governing body of the organisation, enrolled students electing the majority of such members, and satisfying requirements in the Higher Education Support (Student Services, Amenities, Representation and Advocacy) Guidelines 2022.
• Table A providers will have a potential transition period of up to 3 years, and non-Table A providers up to 5 years, subject to agreement with the Secretary of the Department of Education (or their delegate). The providers may apply for this extension and the Secretary must be satisfied that without the extension the provider would be unable to maintain key services at an appropriate level, and that the provider has a plan of transition towards compliance.
• Schedule 3 will rename enabling courses ‘FEE-FREE Uni Ready Courses for students in Commonwealth supported places and establish a new Commonwealth Grant Scheme (CGS) funding cluster for these courses, with a specified Commonwealth contribution amount for 2025 of $18,278. This amount will apply to grandfathered Commonwealth contributions. A FEE-FREE Uni Ready course will not reduce a student's Student Learning Entitlement.
• Schedule 4 will create a new purpose for which grants can be paid to higher education providers under Part 2-3 of HESA, to provide payments to students undertaking mandatory practicums as part of their course of study. It also provides that eligibility for the grant will apply to Table A providers, Table B providers and bodies corporate that are specified in the Other Grants Guidelines. The government has outlined some of the scope for these payments in other sources (see background).
• Schedule 5 will remove references to the University of Adelaide and the University of South Australia and add Adelaide University to the list of Table A providers in HESA.
• Schedule 6 will give the Minister power to make transitional rules in response to unforeseen consequences caused by changes made in the Bill. These may relate to the recalculation of debts or amounts owing, such as in cases where repayment amounts were previously waived (see Explanatory Memorandum, p. 44).

Background

The Australian Universities Accord

The Bill comes in the context of the Australian Universities Accord, which conducted a 12 month review of the higher education sector and produced the Accord in February 2024.

The Accord makes 47 recommendations, many with a suite of sub-recommendations. Their scope includes qualification attainment targets, greater equity support, governance and funding reform, drawing higher education and vocational education and training (VET) into closer alignment, and strategic planning on international education.

All but the Adelaide University measures in this Bill aim to address Accord recommendations or their parts.

HELP Indexation

Contributions and repayments

When first introduced in 1989, the Higher Education Contribution Scheme, now HECS-HELP, had a flat contribution rate of $1,800 per annum. Repayments were compulsory once taxable income reached $22,000 (84% of the annualised May 1989 full-time Adult Weekly Ordinary Time Earnings – AWOTE, May 1989 release, Table 3) and had a maximum repayment rate of 3% for incomes over $35,000 (134% of the AWOTE).

In 2024, student contribution amounts range from $4,445 to $16,323 per annum, depending on the subject studied. For 2023–24, compulsory repayment of loans commence when repayment income reaches $51,550 (just over 51% of annualised AWOTE for May 2024), while those with income over $151,201 (just over 151% of AWOTE) have a repayment rate of 10%.

Indexation

The indexation arrangements for contribution rates, outstanding debt and repayment incomes are all specified in the HESA. While they are all linked to the All Groups CPI, the calculation for each differs (see the Parliamentary Library’s HELP debt FlagPost).

Outstanding debt is indexed each year on 1 June by the sum of the CPI index for each of the 4 quarters to March, over the sum of the 4 quarters to March the previous year (section 140-10 of HESA).

Taking as an example the June 2023 indexation, the highest rate since 1990, the relevant quarters and their yearly totals are set out in Table 1 below.

Table 1  CPI index numbers for HELP debt indexation factor, for June 2023

Current year	March 2023	Dec 2022	Sept 2022	June 2022	Total
	132.6	130.8	128.4	126.1	517.9
Previous year	March 2022	Dec 2021	Sept 2021	June 2021	Total
	123.9	121.3	119.7	118.8	483.7

Source: ‘Consumer Price Index’, Australian Bureau of Statistics (ABS), Table 1.

Therefore, the indexation factor for 1 June 2023 was 517.9/483.7 which equalled 107.1, a 7.1% increase. This was slightly different to the annual rise in the CPI, which compared the quarterly index at March 2023 to March 2022, and resulted in an increase of 7.0%. However, in 2022 student loan debt was only increased by 3.9%, while the March quarter 2022 CPI annual increase was 5.1%.

Figure 1 plots the June indexation rate going back to when it was last higher than 7.1%, in 1990 when it was 8.0%.

Figure 1 HELP indexation rates based on CPI calculations, 1990–2024

Source: Parliamentary Library calculations based on Consumer Price Index, ABS, Table 1; and verified against relevant Commonwealth Government Gazettes and Richard Highfield and Neil Warren, ‘Does the Australian Higher Education Loan Program (HELP) undermine personal income tax integrity?’, eJournal of Tax Research 13, no. 1 (2015): p. 252.

Debt

The Australian Taxation Office publishes HELP debt statistics. According to the most recent statistics, in 2023–24 total outstanding HELP debt was $81.1 billion among almost 3 million debtors (an average of $27,641 per debtor). For comparison, in 2005–06, the debt was $12.4 billion among 1.2 million debtors (an average of $10,460 per debtor). Also, in 2005–06 the average time to repay debt in full was 7.3 years and in 2023–24 it was 9.9 years.

The Accord and the government response

Recommendation 16d of the Accord calls for setting HELP indexation as the lower of the CPI or the WPI (p. 25).

The government outlined its intention to change the indexation arrangements in a pre-budget media release, the 2024–25 Budget, and the Accord Budget summary.

Over the forward estimates it will cost the government $239.7 million to set indexation to the lower of the CPI or the WPI, backdating this change to 1 June 2023, and applying it to all HELP, VET Student Loan, Australian Apprenticeship Support Loan and other student support loan accounts (Budget measures: budget paper no. 2: 2024–25, p. 63; Accord Budget summary, p. 7).

The government has not yet addressed other parts of recommendation 16, such as:

• reducing the student contribution rates introduced through the Job-ready Graduates (JRG) package (Recommendation 16a)
• delaying the timing of the annual indexation of HELP debts from 1 June (to, for example, 30 November) so that the indexed debt takes into account the compulsory repayments made over the previous financial year (Recommendation 16c) (See also Policy position of non-government parties/independents).

Commonwealth Prac Payment

Many university courses have compulsory placements to enable students to gain practical skills and experience. Increasingly, universities are offering opportunities for work-integrated learning (WIL) as part of a wider range of courses.

A range of terminology is used to refer to various forms of WIL, including placements, unpaid work experience (UWE), practicums, field education, professional experience, internships and cadetships.

Vocational placements are lawfully unpaid if they meet the definition under the Fair Work Act 2009 (FW Act). The Fair Work Ombudsman sets out four criteria that allow vocational placements to be unpaid, around the need for the placements to be approved by a relevant authority and for the purpose of an education or training course, without entitlement to be paid.

Reports on prevalence of UWE and WIL

The 2016 report, Unpaid Work Experience in Australia, reported survey findings of people’s most recent episode of UWE. In relation to the duration of UWE, it found that the majority of UWE was less than a month, or less than 35 hours; however, for a sizable proportion of people, it was much longer, with a third reporting UWE of over 70 hours (p. 6).

Universities Australia (UA) published a report in 2019 on Work Integrated Learning in Universities based on data collected from universities in 2017. Overall, in 2017, 451,263 students had a WIL experience, which was equivalent to more than one-third of university students (37.4%) enrolled in Australia in 2017 (p. 8).

Although these figures include paid and unpaid WIL, the most common type of WIL was a placement (43%) which could partially be explained ‘by placements that are integrated into specific degree programs because they are mandatory for registration in professions such as teaching, medicine and nursing’ (p. 8). Figure 2 below shows the prominence of WIL in Health; Agriculture, environmental and related studies; and Education disciplines, while Figure 3 below shows that for Health and Education, placements were the most prominent WIL.

Figure 2 WIL participation by discipline area—unique headcount (%)

Source: Universities Australia, Work Integrated Learning in Universities, (Canberra: Universities Australia, 2019), 13.

Figure 3 WIL participation by type of activity by discipline area

Source: Universities Australia, Work Integrated Learning in Universities, (Canberra: Universities Australia, 2019), 16.

Mandatory placement requirements

Several professional disciplines require work placements as part of the accreditation of university courses. The following table compiles information about minimum requirements for placements in selected illustrative disciplines. Disciplines may require placements in multiple blocks and in diverse settings.

Table 2  Minimum placement requirements for illustrative disciplines

Discipline	Minimum placement requirement	Source
Clinical psychology	1000 hours (Masters) 1500 hours (Doctoral)	Accreditation Standards for Psychology Programs, p. 36.
Education	80 days (undergraduate and double degree education programs) 60 days (graduate entry programs)	Accreditation of Initial Teacher Education Programs in Australia, see Standard 5.2, p. 18.
Engineering	60 days (12 weeks), Professional Engineer level 40 days (8 weeks), Engineering Technologist level	Accreditation Criteria User Guide – Higher Education, see Standard 3.4, pp. 16–19.
Nursing	800 hours	Registered Nurse Accreditation Standards 2019, see Standard 3.12, p. 16.
Occupational therapy	1000 hours	Minimum Standards for the Education of Occupational Therapists, p. 49.
Social work	1000 hours	Australian Social Work Education and Accreditation Standards, see Standard 4.1, p. 11.
Veterinary science	52 weeks of Work Integrated Learning placements	AVBC Accreditation Standards for Veterinary Programs—Version 1 2024, see ‘7. AVBC WIL requirements’, pp. 17–18.

Enrolments in special courses

The Department of Education publishes Higher Education Statistics on enrolment numbers for ‘special courses’, which include courses that ‘provide for initial registration as nurses’ and ‘provide for initial teacher training’.

Table 33 shows a breakdown of the number of commencing students in these courses in 2022 (latest available data), by gender, mode and type of attendance and course level.

Table 3  Commencing students enrolled in selected special courses by gender, mode of attendance, type of attendance, course level, full year 2022

		Nursing	Teaching	Medical	Veterinary	Dental	Psychology
Gender	Males	3,456	7,004	2,177	np	309	np
	Females	20,682	20,588	2,541	496	338	1,149
	Indeterminate Intersex/ Unspecified	39	84	6	< 5	0	< 5
	TOTAL	24,177	27,676	4,724	617	647	1,421
Mode of Attendance	Internal	14,879	12,417	4,049	455	406	875
	External	2,194	9,161	0	0	0	243
	Multi-modal	7,104	6,098	675	162	241	303
	TOTAL	24,177	27,676	4,724	617	647	1,421
Type of Attendance	Full-time	20,238	21,551	4,707	583	610	1,096
	Part-time	3,939	6,125	17	34	37	325
	TOTAL	24,177	27,676	4,724	617	647	1,421
Course Level	Postgraduate	832	7,495	2,475	259	329	1,257
	Undergraduate	23,345	20,181	2,249	358	318	164
	TOTAL	24,177	27,676	4,724	617	647	1,421

Source: ‘2022 Section 8 Special Courses’, Department of Education, Table 8.1. See original source for definitions and explanatory notes.

The Accord and the government response

Recommendation 14 of the Accord calls for Australian Government financial support for unpaid work placements, that ‘should include funding by governments for the nursing, care and teaching professions, and funding by employers generally (public and private) for other fields.’ (p. 23)

The Employment White Paper 2023 also recognised that unpaid practicum placements discouraged enrolment or completion for many students in care and teaching professions, and the government committed to exploring options to ‘mitigate financial hardship’ (p. 206).

The government outlined some details of its approach in a pre-budget media release, the 2024–25 Budget, and the Accord Budget summary. Commwealth Prac Payments would be:

• benchmarked to the single Austudy rate
• means-tested
• available for teaching, nursing and midwifery, and social work students during placements
• available at $319.50 per week from 1 July 2025.

Over the forward estimates, the government budgeted $369.2 million for a Commonwealth Prac Payment, and $58.2 million for eligible students in VET (Accord Budget summary, p. 8). It stated the payments would be available to ‘68,000 eligible domestic higher education students and 5,000 VET students each year’. The Bill only proposes to amend the HESA to allow for grants to be paid to higher education providers for the Commonwealth Prac Payment.

As has been noted in commentary and by parliamentarians (see below), the government has not yet revealed certain details about the payment, such as how it will be means-tested and how universities will administer the payment. Further grant conditions such as these will need to be specified in the Higher Education Support (Other Grants) Guidelines 2022 (HES Guidelines).

FEE-FREE Uni Ready courses

Enabling courses are non-award courses run by universities to prepare students for undergraduate study. Students undertaking an enabling course in a Commonwealth Supported Place (CSP) do not pay a student contribution. In place of the student contribution, some universities receive a Commonwealth grant under the Enabling Loading Program (ELP) (HES Guidelines, Part 2, Division 5) which is part of the Indigenous, Regional and Low Socio-Economic Status Attainment Fund (IRLSAF). In terms of the Commonwealth contribution universities receive, this is paid in accordance with the funding cluster to which the enabling course belongs, in the same way that undergraduate Commonwealth Supported Places are funded through the Commonwealth Grant Scheme (CGS).

The ELP was set at $3,484 per full-time student in the HES Other Grants Guidelines (subsection 31(2)) and is indexed annually. According to Parliamentary Library calculations, this amount would be $3,887 for 2024. This amount is below the lowest maximum student contribution rate for 2024, being those parts of funding clusters to which the maximum student contribution rate is set at $4,445.

Figure 4 shows the number of enrolments in enabling courses from 2001 to 2022, with a steady increase until 2020, after which enrolments have dropped. Enabling programs are reported as having a relatively high proportion of students from indigenous, low-socio-economic, and remote and regional backgrounds.

Figure 4 Enabling course enrolments, 2001–2022

Source: ‘Student Enrolments Pivot Table 2022’, Department of Education, Filters: Broad course level – enabling; ‘uCube – Higher Education Data Cube’, Department of Education, Rows: Broad course level (Filter: Enabling), Columns: Year.

The Accord and government response

Recommendation 12 of the Accord calls for a significant increase in the availability of fee-free preparatory course places, and includes these first three (of six) goals:

1. the number of Commonwealth supported places is expanded to meet demand from students
2. preparatory courses are free for any student in a Commonwealth supported place and this is enshrined in legislation
3. funding for preparatory places reflects the cost of delivery (p. 22)

The 2024–25 Budget included $350.3 million over 4 years from 2024–25 to expand access to enabling courses through a new FEE-FREE Uni Ready Courses (Budget measures: budget paper no. 2: 2024–25, p. 63). The Accord Budget summary specified that this amount would be additional CGS funding and would commence from 1 January 2025 (p. 9).

This Bill and the Department of Education’s webpage show that the government’s approach is to establish a dedicated funding cluster for these enabling courses, such that they receive a consistent (not dependent on subject) rate of $18,279 per full-time student.

The government estimates that the changes and extra funding will increase enabling course enrolments by ‘40 per cent by 2030 and double the number [of] students by 2040’ and that by 2030 around ‘30,000 students will be studying in FEE-FREE Uni Ready courses each year.’

The changes will result in higher funds for enabling courses in subjects in funding clusters where the Commonwealth contribution amount, when combined with the ELP rate, is lower than $18,279. But for some enabling courses this combined amount would be above $18,279, making them worse off.

Analysis by Andrew Norton finds that currently nearly 40% of enabling places are in funding clusters with the lowest Commonwealth contribution. Applying the proposed changes to the 2022 equivalent full-time student load (EFTSL) for enabling courses, would ‘significantly increase revenue for 38.5% of places, significantly reduce revenue in 30.2% of places (mainly science) and slightly reduce revenue in the remaining 31.3% of places.’ Norton also notes that the $18,278 will count towards a university’s maximum basic grant amount (MBGA) – whereas the ELP component doesn’t count – which means there will be a shift in how different disciplines impact a university’s MBGA. However, from 2026, a proposed new Managed Growth Funding system would mean that MBGAs are set as an EFTSL cap rather than a monetary amount.

Currently universities have no cap on how many enabling courses they can run. However, the amount of ELP funding a provider receives to cover the gap left by student contributions is allocated in their funding agreements, and some universities have no or little enabling loading allocation. By subsiding student contributions through the set funding cluster amount, rather than the Enabling Loading Program, the FEE-FREE Uni ready courses program could allow universities to run more enabling courses with greater flexibility.

Student Services and Amenities Fee

In 2006 the Howard Government abolished compulsory student union membership and replaced it with Voluntary Student Unionism (VSU). In 2012 it was superficially restored when the Labor government introduced the Student Services and Amenities Fee (SSAF), but unlike pre-2006, these fees were not required to go to the student unions and were paid to the university, which could allocate the funding at their discretion.

Higher education providers can charge their students a SSAF for student services and amenities of a non-academic nature, such as sporting and recreational activities, employment and career advice, child care, financial advice and food services. Currently, subsection 19-38(4) of HESAprescribes the purposes for which the SSAF can be used but does not include any specification regarding allocation to student-led organisations.

Individual providers determine whether to charge a fee. The maximum fee a provider can charge a student is capped. This maximum amount is indexed annually. Students studying on a part-time basis cannot be charged more than 75% of the maximum amount that students studying on a full-time basis are charged. In 2024 the maximum fee is $351.

A provider can charge the SSAF regardless of whether the student intends to use any of the service and amenities provided.

• SSAF funds can be allocated to student unions that provide relevant services. Under Part 3 of the Higher Education Support (Student Services, Amenities, Representation and Advocacy) Guidelines 2022, universities are required to consult with democratically elected student representatives and representatives from major student organisations at the university about how the SSAF is spent.

The Accord and the government response

Recommendation 19 of the Accord calls for a (undetermined) set proportion of SSAF funding to be allocated to student-led organisations to protect their long term sustainability (p. 26). While it acknowledges the importance of student unions and their reliance on the SSAF, the Accord also suggests the government should ‘set appropriate mechanisms’ so that mandating the allocation for student-led organisations does not impede universities from delivering ‘other services including professional wellbeing and mental health support for students, career development advice, and sport and recreation’ (p. 170).

Subject to the Bill’s amendments to the HESA, from 1 January 2025, universities will be required to direct at least 40% of their SSAF revenue to student-led organisations.

Adelaide University merger

In 2018, the University of Adelaide and the University of South Australia announced they were exploring the possibility of a merger, and stalled efforts were revived in 2022. The merger was agreed in July 2023, and this year ‘Adelaide University’ formally registered with TEQSA in May and ‘formally launched’ for international student admissions ahead of a 2026 start date.

Policy position of non-government parties/independents

In a second reading speech, Paul Fletcher, Manager of Opposition Business in the House of Representatives signalled that the Coalition would not oppose the Bill in the House. However, he noted several issues:

• the absence of a date ‘by which student [HELP] debt credits will be applied or refunds will be paid’ and how much money would be paid as a refund
• the absence of detail on ‘how students will be eligible, means tested or paid’ in regards to the Commonwealth Prac payment
• disappointment among students at the delay in implementing the Commonwealth Prac payment, and among those students in disciplines that were excluded from the payment
• a lack of ‘any measures that require transparency over how unions, guilds and associations use [SSAF] funding’.

The Greens have criticised the government for not going further in reducing the burden of HELP debt, noting that CPI has often been lower than WPI. They have also argued that the Commonwealth Prac Payment amount is inadequate and excludes ‘hundreds of thousands of other students required to undertake unpaid placement work.’

Greens and independents such as Dai Le, have also called for the government to prioritise changing the JRG package, which increased the student fees for a number of degrees. Independents Zoe Daniel and Zali Steggall  proposed second reading amendments that additionally call for changes such that indexation of HELP debts would apply after compulsory repayments are processed.

Responses to Budget 2024–25 announcements

Given that some of these policy proposals were announced around the 2024–25 Budget, some parliamentarians also responded at that time:

• Angus Taylor (Shadow Treasurer) and Sarah Henderson (Shadow Minister for Education), ‘Labor’s HECS debt chaos is a mess of its own making’, media release, 5 May 2024.
• Mehreen Faruqi (Australian Greens Deputy Leader and Spokesperson for Higher Education), ‘Greens and Students Against Placement Poverty say Labor’s plan to address placement poverty is totally inadequate’, media release, 6 May 2024.
• Zali Steggall, ‘Welcome changes to paying off student debt, but more to do’, media release, 5 May [2024].
• Tammy Tyrrell, ‘The actual HECS help students require’, Canberra Times, 13 May 2024.

Position of major interest groups

Universities Australia gave general approval to the government’s ‘prioritisation of measures to support students’ in the 2024–25 Budget. The Group of Eight (Go8) also responded at the time in favour of student relief through changing HELP debt indexation, but urged abolition of the JRG scheme as a crucial reform.

In response to the announcements around the Budget, the National Union of Students (NUS) considered the HELP indexation changes and Commonwealth Prac Payments as providing some relief, but not going far enough to help students. It also noted, as some commentary has, that WPI is not often lower than CPI. The NUS welcomed the proposed changes to SSAF.

A range of professional bodies have expressed disappointment at their disciplines being excluded from the Commonwealth Prac Payment at the time of its announcement and in response to the Bill. These include bodies representing or affiliated with pharmacists, psychologists, allied health professionals, and veterinarians. The Australian Education Union and the Independent Education Union welcomed the initiative, but the former called for more support. Students Against Placement Poverty, in a media release with the Greens, called the payment inadequate.