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2022-2023
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
HIGHER EDUCATION SUPPORT AMENDMENT (RESPONSE TO THE AUSTRALIAN
UNIVERSITIES ACCORD INTERIM REPORT) BILL 2023
EXPLANATORY MEMORANDUM
(Circulated by authority of the Minister for Education, the Hon Jason Clare MP)
TABLE OF CONTENTS
TABLE OF CONTENTS ........................................................................................................ I
OUTLINE ................................................................................................................................. 1
FINANCIAL IMPACT STATEMENT.................................................................................. 2
CONSULTATION ................................................................................................................... 2
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS .................................... 3
Overview of the Bill 4
Human rights implications 5
Conclusion 6
NOTES ON CLAUSES............................................................................................................ 7
Clause 1: Short title 7
Clause 2: Commencement 7
Clause 3: Schedules 7
SCHEDULE 1--AMENDMENTS ......................................................................................... 8
i
HIGHER EDUCATION SUPPORT AMENDMENT (RESPONSE TO THE AUSTRALIAN
UNIVERSITIES ACCORD INTERIM REPORT) BILL 2023
OUTLINE
The Higher Education Support Amendment (Response to the Australian Universities Accord
Interim Report) Bill 2023 (the Bill) amends the Higher Education Support Act 2003 (HESA) to
allow all First Nations students (known as 'Indigenous students' in HESA), including First
Nations students living in metropolitan areas, to be eligible for Commonwealth supported
places in demand driven higher education courses. The Bill will also amend HESA to remove
the requirement that students must pass 50 per cent of the units they study to remain
eligible for a Commonwealth supported place and FEE-HELP assistance, and insert a new
requirement that higher education providers must have, and comply with, a policy that
addresses the support higher education providers will provide to their students, in order to
assist them to successfully complete the units of study in which they are enrolled.
The amendments in Part 1 of Schedule 1 to the Bill, to expand eligibility for places in
demand driven higher education courses, will mean the Commonwealth will provide funding
on a demand driven basis for all First Nations students to enrol in bachelor and bachelor
honours level courses (other than a designated higher education course, currently a course
in medicine) at a Table A provider (as listed in section 16-15 of HESA). This means there will
be no cap on the number of First Nations students that can enrol in Commonwealth
supported places, and that Table A providers will receive Commonwealth funding for all
First Nations students under Part 2-2 of HESA.
Expanding demand driven funding for all First Nations students will have a positive effect on
First Nations student participation rates and will lead to a significant increase in First
Nations people with higher education qualifications over time. This supports the
Government's commitment to the Closing the Gap tertiary education target. The number of
First Nations students who have commenced a domestic bachelor course at a university has
also more than doubled over the last 12 years. This demonstrates an increasing demand
from this group over time. The amendments to expand eligibility for demand driven higher
education courses presents an opportunity to provide access to higher education to more
First Nations students and encourages this cohort to consider study at the bachelor level.
The amendments in Part 2 of Schedule 1 to the Bill will remove the current requirement for
students to maintain a pass rate above 50 per cent of the units of study they undertake,
which is assessed after students have completed eight units in a bachelor degree or higher,
or four units in all other cases. Students who cannot maintain this pass rate currently lose
eligibility for Commonwealth assistance, and must either pay for their course upfront,
transfer to another course, or withdraw from their studies.
The pass rate measures were originally introduced with the intention of dissuading students
from continuing in courses they are not academically suited for, to avoid accruing large
Higher Education Loan Program (HELP) debts without successfully gaining a qualification.
1
However, the practical effect of these measures has been overly punitive for students and
has not necessarily motivated higher education providers to provide better support to
students experiencing academic difficulties. The impact of these measures has also fallen
disproportionately on students from First Nations, low socioeconomic status, and other
under-represented or educationally disadvantaged cohorts.
In order to motivate higher education providers to provide appropriate support for students
to assist students to successfully complete their studies, the amendments in Part 2 also
insert a new requirement that higher education providers must have, and comply with, a
policy that addresses the support higher education providers will provide to their students,
in order to assist them to successfully complete the units of study in which they are
enrolled. This will require higher education providers to demonstrate how they will support
their students experiencing academic difficulties. This includes, but is not limited to, the
provider having processes for identifying students at risk of not successfully completing
their units of study and supports available to students to successfully complete their studies.
These requirements are not onerous, particularly for a quality provider fulfilling other
requirements under law and meeting community expectations. Support for student success
and monitoring of student progress is expected of a modern, quality higher education
provider. This measure will ensure that mechanisms for monitoring student progress,
developed by higher education providers for the implementation of the pass rate measure,
are maintained despite the removal of the measure, along with appropriate supports for
students. Higher education providers that do not have such processes or supports in place
will need to implement a quality student support policy in order to be compliant with their
obligations under HESA.
FINANCIAL IMPACT STATEMENT
The expansion of demand driven places is estimated have a cost of up to $34.1 million in
underlying cash terms over the period 2023−24 to 2026−27.
The removal of the 50 per cent pass rate requirement and the imposition of the new
requirement that higher education providers must have, and comply with, a policy that
addresses the support higher education providers will provide to their students, is expected
to have an underlying cash impact of $1.1 million over the period 2023−24 to 2026−27.
CONSULTATION
Following extensive consultation, the Australian University Accord Panel (Accord Panel)
recommended a number of priority actions, including the two to which this Bill responds.
The Accord Panel's Priority Action 2 is to "Cease the 50% pass rule, given its poor equity
impacts, and require increased reporting on student progress. Introduced as part of the JRG
package, the 50% pass rule disproportionately disadvantages students from under-
represented cohorts. Enhanced reporting on student progress will increase the focus on
improving the success rates of at-risk students. While the Review believes other aspects of
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the JRG package need reform, this change should proceed at the first possible opportunity".
The amendments to the pass rate measures have been made in response to this priority
action recommended by the Accord Panel.
The Accord Panel's Priority Action 3 is to "Ensure that all First Nations students are eligible
for a funded place at university, by extending demand driven funding to metropolitan First
Nations students. Consistent with the principle behind the introduction of guaranteed
funding for First Nations students from regional and remote areas in 2021, this funding
arrangement should apply to all First Nations people undertaking higher education,
including in metropolitan areas". The amendments to the demand driven measure have
been made in response to this priority action recommended by the Accord Panel.
The Accord Panel also recommended "[extending] visible, local access to tertiary education
by creating further Regional University Centres (RUCs) and establish a similar concept for
suburban/metropolitan locations". In response the Australian Government has committed
to double the existing number of Hubs with up to 34 new regional and suburban university
study hubs, which will be implemented through the Higher Education Support (Other
Grants) Guidelines 2022 (outside of this Bill).
Universities Australia (UA), the Equity Practitioners in Higher Education Australasia and the
National Aboriginal and Torres Strait Islander Higher Education Consortium welcomed the
initial demand driven funding for regional and remote First Nations students measure and
have called for the initiative to be expanded to all First Nations students. The amendments
in Part 1 of Schedule 1 to the Bill are being made in response to these calls to expand the
measure.
The National Indigenous Australians Agency has also been consulted in relation to the
amendments to demand driven places and are supportive of the change.
The effectiveness of the pass rate measures was discussed as part of the Australian
Universities Accord. Many stakeholders raised concerns over their current operation,
including UA, who provided detailed analysis on the effect of the pass rate measures on
affected students to the Accord Panel. Based on this feedback, the Accord Panel
recommended the removal of the pass rate measures. The Accord Panel was clear in doing
this that there should be increased accountability and reporting processes to support
student progress as this will increase the focus on improving the success rates of at-risk
students. These students should be identified as early as possible to implement support at
the right time and ensure students do not accrue debt unnecessarily. The amendments to
insert a new requirement that higher education providers must have, and comply with, a
policy that addresses the support higher education providers will provide to their students,
in order to assist them to successfully complete the units of study in which they are
enrolled, have been made in response to this recommendation by the Accord Panel.
STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS
3
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Higher Education Support Amendment (Response to the Australian Universities Accord
Interim Report) Bill 2023
The Higher Education Support Amendment (Response to the Australian Universities Accord
Interim Report) Bill 2023 (the Bill) is compatible with the human rights and freedoms
recognised or declared in the international instruments listed in section 3 of the Human
Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Bill
The Bill amends the Higher Education Support Act 2003 (HESA) to allow all First Nations
students (known as 'Indigenous students' in HESA), including First Nations students living in
metropolitan areas, to be eligible for Commonwealth supported places in demand driven
higher education courses. The Bill also amends HESA to remove the requirement that
students must pass 50 per cent of the units they study to remain eligible for a
Commonwealth supported place and FEE-HELP assistance, and insert a new requirement
that higher education providers must have, and comply with, a policy that addresses the
support higher education providers will provide to their students, in order to assist them to
successfully complete the units of study in which they are enrolled.
The amendments in Part 1 of Schedule 1 to the Bill to expand eligibility for places in demand
driven higher education courses, will mean that the Commonwealth will provide funding on
a demand driven basis for all First Nations students to enrol in bachelor and bachelor
honours level courses (other than a designated higher education course, currently a course
in medicine) at a Table A provider (under section 16-15 of the HESA). This means there will
be no cap on the number of First Nations students that can enrol in Commonwealth
supported places, and that Table A providers will receive Commonwealth funding for all
First Nations students under Part 2-2 of HESA.
Expanding demand driven funding for all First Nations students is expected to have a
positive effect on First Nations student participation rates and will lead to an increase in
First Nations people with higher education qualifications over time. This supports the
Government's commitment to the Closing the Gap tertiary education target. The number of
First Nations students who have commenced a domestic bachelor course at a university has
also more than doubled over the last 12 years. This demonstrates an increasing demand
from this group over time. The amendments to expand eligibility for demand driven higher
education courses presents an opportunity to provide access to higher education to more
First Nations students and encourages this cohort to consider further study at the bachelor
level.
The amendments in Part 2 of Schedule 1 to the Bill will remove the current requirement for
students to maintain a pass rate above 50 per cent of the units of study they undertake,
which is assessed after students have completed eight units in a bachelor degree or higher,
or four units in all other cases. Students who cannot maintain this pass rate currently lose
4
eligibility for Commonwealth assistance, and must either pay for their course upfront,
transfer to another course, or withdraw from their studies.
The pass rate measures were originally introduced with the intention of dissuading students
from continuing in courses they are not academically suited for, to avoid accruing large
Higher Education Loan Program (HELP) debts without successfully gaining a qualification.
However, the practical effect of these measures has been overly punitive for students and
has not necessarily incentivised higher education providers to provide better support to
students experiencing academic difficulties. The impact of these measures has also fallen
disproportionately on students from First Nations, low socioeconomic status, and other
under-represented or educationally disadvantaged cohorts.
In order to motivate higher education providers to provide appropriate support for students
to assist students to successfully complete their studies, the amendments in Part 2 also
insert a new requirement that higher education providers must have, and comply with, a
policy that addresses the support higher education providers will provide to their students,
in order to assist them to successfully complete the units of study in which they are
enrolled. This will require higher education providers to demonstrate how they will support
their students experiencing academic difficulties. This includes, but is not limited to, the
provider having processes for identifying students at risk of not successfully completing
their units of study and supports available to students to successfully complete their studies.
These requirements are not onerous, particularly for a quality provider fulfilling other
requirements under law and meeting community expectations. Support for student success
and monitoring of student progress is expected of a modern, quality higher education
provider. This measure will ensure that mechanisms for monitoring student progress,
developed by higher education providers for the implementation of the pass rate measure,
are maintained despite the removal of the measure, along with appropriate supports for
students. Higher education providers that do not have such processes or supports in place
will need to implement a quality student support policy in order to be compliant with their
obligations under HESA.
Human rights implications
Article 13: Right to education
The Bill engages the right to education, which is set out in Article 13 of the International
Covenant on Economic Social and Cultural Rights (ICESCR). Article 13 recognises the
important personal, societal, economic and intellectual benefits of education. Article 13
provides that secondary education in all its different forms, including higher education, shall
be made generally available and accessible to all by every appropriate means.
Part 1 of Schedule 1 to the Bill expands demand driven funding for Commonwealth
supported places to all First Nations students (not just regional and remote First Nations
students) to enrol in bachelor and bachelor honours level courses at Table A universities.
This measure will improve access to higher education for First Nations Australians, who have
5
historically had lower higher education participation rates than the rest of the population,
by ensuring that there is no cap on the number of First Nations students that can enrol in
Commonwealth supported places. These amendments also mean that Table A providers will
receive Commonwealth funding for these students under Part 2-2 of HESA, supporting
providers to continue to deliver quality higher education to these students.
Part 2 of Schedule 1 to the Bill will remove the pass rate measures. The removal of the pass
rate measures removes a barrier that was in place for students accessing Commonwealth
assistance for higher education, as students needed to satisfy the pass rate requirement to
access Commonwealth assistance. The removal of this requirement improves access to
education, as it makes it easier for students to access Commonwealth assistance when
undertaking higher education. The pass rate measures also disproportionately affected
students from under-represented cohorts. The removal of the pass rate measures will
support all students, in particular students from under-represented cohorts, to undertake
further study.
The amendments in Part 2 requiring higher education providers to have, and comply with, a
policy that addresses the support providers will provide to their students, in order to assist
them to successfully complete the units of study in which they are enrolled, also support the
right to education by ensuring that students receive the support they need to complete
their studies. These amendments will also help prevent students from accruing unnecessary
debts as a result of taking out loans for units of study that they do not successfully
complete. As there is a lifetime limit on the amount of HELP debt an individual can hold at
any one time, accruing a large amount of debt due to unsuccessful completion of units of
study may impact on an individual's ability to undertake further study in future. By better
supporting students so that they can avoid this situation from occurring, the amendments
support the right to education.
Conclusion
The Bill is compatible with human rights because it supports the right to education.
Minister for Education, the Hon Jason Clare MP
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HIGHER EDUCATION SUPPORT AMENDMENT (RESPONSE TO THE AUSTRALIAN
UNIVERSITIES ACCORD INTERIM REPORT) BILL 2023
NOTES ON CLAUSES
Clause 1: Short title
1. This is a formal provision specifying the short title of the Act.
Clause 2: Commencement
2. The table in this clause provides that the whole of the Act commences the day the Act
receives the Royal Assent.
Clause 3: Schedules
3. This clause provides that any legislation that is specified in a Schedule to the Act is
amended or repealed as set out in the applicable items in the Schedule and that any
other item in a Schedule has effect according to its terms.
7
Schedule 1--Amendments
Higher Education Support Act 2003
Part 1--Indigenous students
4. Part 1 of Schedule 1 amends the Higher Education Support Act 2003 (HESA) in order
to expand eligibility for Commonwealth supported places in demand driven higher
education courses, and enables the Commonwealth to provide funding on a demand
driven basis for all Indigenous students to enrol in bachelor and bachelor honours
level courses (other than a designated higher education course, currently a course in
medicine) at a Table A provider.
Item 1: Paragraph (a) of the definition of 'demand driven higher education course'
5. This item repeals paragraph (a) of the definition of 'demand driven higher education
course' and replaces it with a new paragraph (a).
6. Previous paragraph (a) provided that a demand driven higher education course is a
course of study that is undertaken by an eligible Indigenous person for the course of
study with a Table A provider. 'Eligible Indigenous person' was defined as an
Indigenous person whose permanent residential address, at the time the person first
enrols in a course of study with a Table A provider, is in a 'regional area' or 'remote
area'. New paragraph (a) provides that a demand driven higher education course is a
course of study that is undertaken by an Indigenous person, removing the reference
to an 'eligible Indigenous person,' as the provision of funding has been expanded so
that it is not limited to only Indigenous persons living in a regional or remote area.
Items 2 to 4: definitions of 'eligible Indigenous person', 'regional area' and 'remote area'
7. Items 2 to 4 repeal the definitions of 'eligible Indigenous person', 'regional area' and
'remote area'.
8. These definitions were only used in the context of defining what an 'eligible
Indigenous person' was for the purposes of determining eligibility for demand driven
higher education courses. As the eligibility for demand driven higher education
courses has been expanded to include all Indigenous people, regardless of where
they live, these definitions are no longer necessary.
Item 5: Application of amendments
9. Item 5 provides that the application of the amendments in Schedule 1 apply in
relation to funding agreements entered into under Part 2-2 of HESA in respect of
8
2024 and later calendar years, and grants payable under that Part for 2024 and later
calendar years.
9
Part 2--Supporting students to succeed
10. Part 2 of Schedule 1 amends HESA to remove the requirement that students must
pass 50 per cent of the units they study to remain eligible for a Commonwealth
supported place and FEE-HELP assistance.
11. Part 2 of Schedule 1 also amends HESA to insert a new requirement that higher
education providers must have, and comply with, a policy that addresses the support
higher education providers will provide to their students, in order to assist them to
successfully complete the units of study in which they are enrolled.
Item 6: After Section 19-42
12. This item inserts a new section 19-43 in Division 19 of HESA, which sets out the
quality and accountability requirements on higher education providers.
13. New section 19-43 provides that higher education providers must have a policy (a
support for students policy) that addresses the support higher education providers
will provide to their students, in order to assist them to successfully complete the
units of study in which they are enrolled.
14. Subsection 19-43(2) imposes requirements on the higher education provider's
support for students policy. Paragraph 19-43(2)(a) provides that a higher education
provider's support for students policy must include information on the provider's
processes for identifying students that are at risk of not successfully completing their
units of study and the supports available from or on behalf of the provider to assist
students to successfully complete the units of study in which they are enrolled.
Paragraph 19-43(2)(b) also provides that the support for students policy must
comply with any requirements specified in the Higher Education Provider Guidelines.
15. The requirements for what must be included in the support for students policy that
may be specified in the Higher Education Provider Guidelines, may include setting
out processes that the higher education provider has in place to identify and
intervene early with students who are struggling, processes about providing access
to support for students, and improved and strengthened processes to assess
students' academic suitability.
16. Subsection 19-43(3) provides that, without limiting paragraph 19-43(2)(b), the
requirements specified in the Higher Education Provider Guidelines may relate to the
requirements for the higher education provider's support for students policy to
include specified information and requirements about the presentation, format and
availability of the policy.
17. Subsection 19-43(4) provides that a higher education provider must comply with its
support for students policy.
18. Subsections 19-43(5) and (6) provide that a higher education provider must provide
a report to the Minister relating to the provider's compliance with its support for
10
students policy, and that the report must include the information required by the
Higher Education Provider Guidelines and must be provided at the time, or within
the period, specified in the Higher Education Provider Guidelines.
19. Subsection 19-43(7) provides that a provider contravenes subsection (7) if the
provider is subject to a requirement under section 19-43 and does not comply with
the requirement. Subsection (7) imposes a civil penalty of 60 penalty units if the
provider does not comply with the requirements set out in section 19-43.
20. As such, a provider's failure to comply with its support for students policy, and any
failure to give a report to the Minister about its compliance with its support for
students policy, that includes the information required by the Higher Education
Provider Guidelines, and at the times specified in those Guidelines, will attract a civil
penalty of 60 penalty units. This is consistent with similar provisions in HESA, such as
section 19-70, which provides that failure of a provider to give the Minister
information in the form approved by the Minister and in accordance with such other
requirements as the Minister makes will attract a civil penalty of 60 penalty units.
21. Further, including a civil penalty provision in subsection 19-43(7) will provide the
department or the Tertiary Education Quality and Standards Agency with the ability
to take action under Part 5-8 of HESA (including issuing an infringement notice under
Part 5 of the Regulatory Powers (Standard Provisions) Act 2014) in the event of a
provider's non-compliance. This is an appropriate additional action to ensure
compliance with section 19-43, noting that the current actions available to the
department or the Minister (or his delegate) under HESA include issuing a
compliance notice under section 19-82, or, in extreme cases, suspending or revoking
a provider's approval under Division 22 (which could have a detrimental impact on
students and the Australian higher education system).
Items 7 to 9: subparagraph 19-45(1)(c)(i), paragraphs 19-45(4)(a), 19-50(1)(a) and 19-
50(2)(c) and subsection 19-60(1)
22. These items amend subparagraph 19-45(1)(c)(i), paragraphs 19-45(4)(a), 19-50(1)(a)
and 19-50(2)(c) and subsection 19-60(1), to remove references to paragraph
36-13(2)(b), to reflect that section 36-13 has been repealed by item 10.
Item 10: section 36-13
23. This item repeals section 36-13.
24. This section provided that a higher education provider must not advise a person that
the person is a Commonwealth supported student in relation to a unit of study if the
person did not meet the pass rate requirements. This section also had provisions
that provided which units of study should be disregarded for the purposes of
determining whether the student had met the pass rate requirements.
11
25. Item 10 repeals section 36-13, as the pass rate requirements that students must
meet to be eligible to be a Commonwealth supported student have been removed.
The repeal of section 36-13 will mean that all students (regardless of whether they
have, due to the operation of this section, been found previously to not be eligible to
be a Commonwealth supported student) will not need to meet the pass rate
requirements to be eligible to be a Commonwealth supported student.
Item 11: subsection 104-1(1)
26. This item amends subsection 104-1(1) to remove references to section 104-1A, to
reflect that section 104-1A has been repealed by item 12.
Item 12: section 104-1A
27. This item repeals section 104-1A.
28. This section provided that a student is not entitled for FEE-HELP assistance for a unit
of study provided, or to be provided, by a higher education provider, if the student
did not meet the pass rate requirements. This section also provided that the section
did not apply if the student applied for an exemption and the higher education
provider was satisfied that special circumstances applied to the student.
29. The repeal of section 104-1A will mean that all students (regardless of whether they
have, due to the operation of this section, been found previously to not be eligible
for FEE-HELP assistance) will not need to meet the pass rate requirements to be
eligible for FEE-HELP assistance.
Item 13: subsection 104-30(1)
30. This item amends subsection 104-30(1) to remove references to paragraph
104-1A(2)(b) to reflect that section 104-1A has been repealed.
Item 14: section 206-1 (table items 1AE and 1)
31. This item repeals table items 1AE and 1 in section 206-1, as they related to decisions
made under paragraph 36-13(2)(b) and subsection 104-1A(2), and sections 36-13
and 104-1A have been repealed.
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Items 15 to 17: subsection 209-1(2) (note 1), paragraph 238-1(2)(a) and subsection 238-
10(1) (table item 1)
32. These items amend subsection 209-1(2), paragraph 238-1(2)(a) and subsection
238-10 (table item 1) to remove references to paragraph 36-13(2)(b) and section
36-13, to reflect that section 36-13 has been repealed by item 10.
Items 18: Application of amendments
33. This item provides that new section 19-43 of HESA, as inserted by Part 2 of Schedule
1 to the Bill, applies on and after the commencement of item 18 in relation to higher
education providers approved under section 16-25 of HESA, or taken to be approved
under section 16-5 of HESA, whether approved, or taken to be approved, before or
after that commencement.
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