46. Tuition Protection

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46.1 - What is Tuition Protection?

This section describes the higher education provider’s obligations towards their students if the provider defaults, and how Tuition Protection works.

Higher Education Tuition Protection is an initiative of the Australian Government to assist domestic higher education students if their provider defaults (fails to commence or ceases to deliver a unit of study and/or course to their students). Tuition Protection protects all domestic students at private higher education providers whether they make upfront payments or use a HELP loan to pay for their studies.

Tuition Protection ensures that domestic higher education students can either:

  • Complete their studies in an equivalent or similar unit and/or course with another higher education provider; or
  • Receive a refund of their upfront payments for tuition fees, or a re-credit of their HELP loan for units of study they were undertaking when their provider defaulted.

46.2 - Which providers does tuition protection arrangements apply to?

Table A providers [HESA section 16-15], TAFEs and Government funded providers are currently exempt from higher education tuition protection arrangements under Part 5-1A of HESA and the Part 5A of the TEQSA Act, and students enrolled with these exempt providers are not included in the scope of these tuition protection arrangements, since these providers are assessed to have a low risk of default. This does not prevent those providers from enrolling displaced students as replacement providers. 

All other registered higher education providers are statutorily required to participate in tuition protection arrangements, either for HELP students [HESA Part 5-1A] or for domestic up-front paying students [TEQSA Act, Part 5A].

46.3 - When does a provider default in relation to a student?

HELP Tuition Protection Scheme

A non-exempt higher education provider defaults [HESA section 166-10] in relation to a student if:

  • The provider fails to commence a unit of study on the day of the unit of study’s scheduled start date, or the provider ceases to provide a unit of study before the unit of study’s scheduled end date; and
  • the student has not withdrawn from the unit of study on or before that day; and
  • student was entitled or would have been entitled to FEE-HELP or HECS-HELP assistance for the unit of study.

Chapter 2 of the HEP Guidelines also prescribes further circumstances in which a higher education provider defaults in relation to a HELP student.   

Up-front Payments Tuition Protection Scheme

A registered higher education provider defaults in relation to a domestic student if [TEQSA Act, section 62C]:

  • The provider fails to commence a unit of study on the day of the unit of study’s scheduled start date, or the provider ceases to provide a unit of study before the unit of study’s schedule end date; and
  • the student has not withdrawn from the unit of study on or before that day; and
  • the student:
    • made an up-front payment for the unit of study on or before that day; or
    • did not make an up-front payment for the unit of study on or before that day and the student was not entitled, and would not have been entitled, to FEE-HELP or HECS‑HELP assistance for the unit.

Division 4 of the Tuition Protection (Up-front Payments Guidelines) 2020 also prescribes further circumstances in which a registered higher education provider defaults in relation to a domestic student. 

46.4 - What are the Tuition Protection requirements that non-exempt providers must meet?

Non-exempt higher education providers who default in relation to a HELP student or domestic up-front paying student must meet the tuition protection requirements [HESA Part 5-1A and HEP Guidelines Chapter 2; TEQSA Act Subdivision A and Up-front Payments Guidelines Part 2]:

Notice of default to the Higher Education Tuition Protection Director

  • Within 24 hours of defaulting, the higher education provider must give written notice to the Higher Education Tuition Protection Director (the Director) of the circumstances of the default [HESA subsection 166-15(2); TEQSA Act subsection 62D(2)]
  • Within 3 business days of defaulting the higher education provider must give written notice to the Director specifying:
    • information in relation to each student to whom the provider has defaulted including [HESA subsection 166-15(3); TEQSA Act section 62D(3)]:
      • the student’s full name and contact details
      • the units of study and the course of study that the student was enrolled in at the time of the default
      • the amount of the tuition fees for each unit of study that the student was enrolled in at the time of the default
      • details about the payment of those tuition fees; and
    • any other matters prescribed by the HEP Guidelines for affected HELP students; or
    • any other matters prescribed by the Tuition Protection (Up-front Payments Guidelines) 2020 for affected domestic up-front fee-paying students.

The higher education provider must also give to the Director a copy of a student’s record of results for the units of study that the student has completed if it is requested by the Director [HESA subsection 166-15(4); TEQSA Act section 62D(4)].

Notice of default to affected students

Within 24 hours of defaulting, the higher education provider must give written notice of the default to the students to whom the provider has defaulted [HESA subsection 166-20(2); TEQSA Act subsection 62E(2)] and that notice must comply with any requirements set out by the HEP Guidelines for HELP students [HESA subsection 166-20(3)], and the Up-front Payments Guidelines for domestic up-front fee-paying students [TEQSA Act subsection 62E(3)].

Providers’ obligations in case of default

Within 14 days of defaulting (‘the provider obligation period’), the higher education provider must discharge its obligations to the student [HESA subsection 166-25(2); TEQSA Act subsection 62F(2)].

A provider discharges it obligations to the student [HESA subsection 166-25(3); TEQSA Act subsection 62F(3)] when either:

  • the provider arranges for the student to be offered a place in a suitable replacement unit or replacement course and the student accepts the offer in writing; or
  • the provider re-credits the student’s *HELP balance [HESA subsections 97-42(1) or 104‑42(1)] and repays the relevant HELP loan amount to the Commonwealth [HESA subsections 36-24A(2) or 110-5(1)]; or
  • the provider provides a refund [TEQSA Act paragraph 62F(3)(b)].

Within 7 days of the end of the provider obligation period, the provider must also give a notice to the Director that includes the following [HESA section 166-26A; TEQSA Act subsection 62H(1)]:

  • whether the provider discharged its obligations to the student in accordance with section 166-25 of HESA for affected HELP students, or with section 62F of the TEQSA Act for affected domestic up-front fee-paying students; and
  • if the provider arranged a suitable replacement unit or replacement course for the student, the following information:
    • details of the student; and
    • details of the replacement unit or the replacement course; and
    • evidence of the student’s acceptance of an offer of a place in the replacement unit or replacement course; or
  • if the provider re-credited the student’s HELP balance and repaid the Commonwealth for an affected HELP student, the:
    • details of the student; and
    • details of the amount re-credited and the amount repaid; or
  • if the provider provided a refund to an affected domestic up-front fee-paying student, the:
    • details of the student; and
    • details of the amount of the refund.

Suitable replacement units or suitable replacement courses

A provider that has defaulted must identify whether there are suitable replacement units or suitable replacement courses, [HESA subsection 166-25(4); TEQSA Act subsection 62F(4)] or that there is no suitable replacement unit or suitable replacement course for the student.

For identifying whether there is a suitable replacement course, the default higher education provider must have regard to the following matters [HESA subsection 166-25(5); TEQSA Act subsection 62F(5)]:

  • whether the replacement course leads to the same or a comparable qualification as the original course
  • what credits the student may receive for the units of study of the original course successfully completed by the student
  • whether the mode of delivery of the replacement course is the same as the mode of delivery of the original course
  • the location where the replacement course will be primarily delivered
  • whether the student will incur additional fees that are unreasonable and will be able to attend the course without unreasonable impacts on the student’s prior commitments; and
  • any other matters prescribed by the HEP Guidelines for affected HELP students; or
  • any other matters prescribed by the Tuition Protection (Up-front Payments Guidelines) 2020 for affected domestic up-front fee-paying students.

For identifying whether there is a suitable replacement unit, the provider must have regard to the following matters [HESA subsection 166-25(6); TEQSA Act subsection 62F(6)]:

  • whether the student will receive credit under the student’s original course for the replacement unit
  • whether the mode of delivery of the replacement unit is the same as the mode of delivery of the affected unit
  • the location where the replacement unit will be primarily delivered
  • whether the student will incur additional fees that are unreasonable and will be able to attend the replacement unit without unreasonable impacts on the student’s prior commitments; and
  • any other matters prescribed by the HEP Guidelines for affected HELP students; or
  • any other matters prescribed by the Tuition Protection (Up-front Payments Guidelines) 2020 for affected domestic up-front fee-paying students.

If there is a suitable replacement unit or suitable replacement course available, then the default higher education provider must give a written notice to the student that includes the following [HESA subsection 166-25(7); TEQSA Act subsection 62F(7)]:

  • a statement that the student may decide to do one of the following:
    • enrol in a suitable replacement unit or replacement course
    • enrol in another unit of study or course
    • elect to have either
      • an amount equal to the amounts of FEE‑HELP or HECS-HELP assistance that the student received for the affected unit re-credited to the student’s *HELP balance; or
      • the amount equal to the sum of any up-front payments made for the affected unit refunded back to the student;
  • a description of each suitable replacement unit or suitable replacement course, including the qualification that the suitable replacement course leads to
  • the contact details of the provider of each suitable replacement unit or suitable replacement course
  • an explanation that, if tuition fees or the student’s student contribution amount have been paid for the affected unit of the original course, tuition fees or the student contribution amount would not be payable for a suitable replacement unit or a replacement unit of a suitable replacement course
  • an explanation that if the student chooses to enrol in another unit of study or course, there is no obligation on the provider of the other unit or course to offer a replacement unit without charge to the student
  • If an affected HELP student, then an explanation of the matters the provider must have regard to under subsections 166-25(5) and (6) of HESA
  • If an affected up-front fee-paying student, then an explanation of the matters the provider must have regard to under subsections 62F(5) and (6) of the TEQSA Act
  • any other matters prescribed by the HEP Guidelines for affected HELP students
  • any other matters prescribed by the Tuition Protection (Up-front Payments Guidelines) 2020 for affected domestic up-front fee-paying students.

Student elects re-credit

If a HELP student elects to receive a re-credit of their FEE-HELP or HECS-HELP loan used to pay for the affected unit of study costs, the provider must re-credit the student’s HELP balance of an amount that is equal to the amounts of FEE-HELP assistance or HECS-HELP assistance that the student received for any affected unit(s) [HESA subparagraph 166-26B(4)(a)(iii)].

Note: If a HELP student has received HECS-HELP or FEE-HELP assistance and also made a partial up-front payment for the affected unit of study costs, then any elections made must be consistent for the HELP assistance received, and the up-front payment made for the unit [HESA subsection 166-26B(9)]. For example, if the student elects a re-credit for the HELP assistance received for the affected unit, then if the student also made partial up-front payment for the same affected unit, then the student must also elect to receive a refund for the up-front payment amount.

Student elects refund

If a domestic up-front fee paying student elects to receive a refund of their affected unit costs, the provider must pay the student the refund of an amount equal to the sum of any up-front payments they made for any affected unit(s) [TEQSA Act subsection 62F(8)].

Any refund must be in accordance with any requirements in the Tuition Protection (Up-front Payments Guidelines) 2020 [TEQSA Act subsection 62F(9)].

Note: if the student made an up-front payment and accessed FEE-HELP or HECS-HELP assistance for the same affected unit then any elections made must be consistent for the HELP assistance received, and the up-front payment made for the unit [TEQSA Act subsection 62F(10)]. For example, if the student elects a refund for the up-front payment made for the affected unit, then if the student also accessed HECS-HELP or FEE-HELP assistance for the same affected unit, then the student must also elect to receive a re-credit for the HECS-HELP or FEE-HELP assistance accessed.

Provider fails to discharge its obligations

If a provider does not discharge its obligations in relation to their affected students, then the Director will assist affected students to find a suitable replacement course or to receive a re‑credit of their HELP balance, or a refund of their up-front payments [HESA section 166-26B; TEQSA Act section 62J]. 

However, if a provider fails to discharge their obligations to their affected students the provider may be subject to a civil penalty or offence of strict liability [HESA section 166-26; TEQSA Act section 62G].

46.5 – Tuition Protection Levies

This section provides information on the HELP Tuition Protection levy and the Up-front Payments Tuition Protection Levy which are part of the higher education Tuition Protection arrangements. Both levies ensure the tuition protection arrangements are sustainable and can respond to trends in the higher education sector.

The levies only apply to leviable providers, which are private higher education providers unless an exemption applies [Higher Education Support (HELP Tuition Protection Levy) Act 2020 (HELP Levy Act) subsection 5(1); Higher Education (Up-front Payments Tuition Protection Levy Act 2020 (Up-front Payments Levy Act) subsection 5(1)]. The circumstances where an exemption will apply will be set out in the HEP Guidelines and the Up-front Payment Tuition Protection Guidelines.

HELP Tuition Protection Levy

The HELP Tuition Protection Levy is part of the tuition protection arrangements to protect domestic higher education students who undertake a HELP loan in the event of a provider ceasing to deliver a course or closing. The levy is imposed under the HELP Levy Act and in accordance with the HEP Guidelines.

Up-front Payments Tuition Protection Levy

The Up-front Payments Tuition Protection Levy is part of the new tuition protection arrangements to protect domestic higher education students who pay for their study costs upfront in the event of a provider ceasing to deliver a course or closing. The levy is imposed under the Up-front Payments Levy Act and in accordance with the Tuition Protection (Up-front Payment Guidelines) 2020.

How much is payable under the levies?

Both levies are comprised of the same three components which are:

  • an administrative component [HELP Levy Act section 8; Up-front Payments Levy Act section 8], determined by the Minister [HELP Levy Act section 9; Up-front Payments Levy Act section 9];
  • a risk rated premium component [HELP Levy Act section 11; Up-front Payments Levy Act section 11] determined by the director; and
  • a special tuition protection component [HELP Levy Act section 12; Up-front Payments Levy Act section 12], determined by the Director [HELP Levy Act section 13; Up‑front Payments Levy Act section 13].

Thus, the amounts payable by private higher education providers for each levy in a year is the sum of the three components (administrative, risk rated premium and special tuition protection) [HELP Levy Act section 7; Up-front Payments Levy Act section 7]. The amounts payable for each component will be made for each leviable provider, commensurate with their size and risk. The Minister and the Director must determine the amounts for each component that are to apply to a leviable provider by 1 August each year [HELP Levy Act sections 9 and 13; Up-front Payments Levy Act sections 9 and 13]. The Director will issue leviable providers with a levy notice each year setting out the amounts determined for the levies, which providers will be required to pay by a specified timeframe.

Leviable providers may seek a review of the levy notice in relation to the determination of any components of the levies, as it is a reviewable decision. The HEP Guidelines sets out the requirements for review of a HELP Tuition Protection Levy decision, and the Tuition Protection (Up-front Payments Guidelines) 2020 set out the requirements for review of an Up-front Payments Tuition Protection Levy decision.

46.6 – Replacement providers

Higher education providers who provide a replacement unit and/or course to a domestic student affected by provider default are referred to as “replacement providers”.

This section provides information on the obligations that are imposed on replacement providers under HESA and the TEQSA Act. 

If the Tuition Protection Director (the Director) issues a notice to a higher education provider requesting information about their replacement courses, then the provider must give the requested information to the Director [HESA section 166-27; TEQSA Act section 62N]. This is to enable the Director to make a decision on suitable replacement courses for a domestic student whose provider has defaulted. 

If an affected domestic student accepts an offer of a replacement unit and course with a replacement provider, then the replacement provider must meet the following obligations: 

  • Give a written notice that they are accepting the displaced student in a replacement unit or replacement course to the Director. This must occur within 14 days of the student accepting an offer of a place in a replacement unit or replacement course [HESA subsection 166-30(2); TEQSA Act subsection 62P(2)]
  • Ensure that a student enrolled in a replacement course is granted course credits for the units of study of the original course successfully completed by the student [HESA paragraph 166-30(3)(a); TEQSA Act section 62P(3)(a)]
  • Not charge a student contribution amount or tuition fee to students enrolled in a replacement unit or units of study of the replacement course where the student has already been charged or has paid a student contribution amount or a tuition fee for an affected unit of their original course with their default provider [HESA paragraph 166-30(3)(b); TEQSA Act paragraph 62P(3)(b)]
  • Enrol affected students in the replacement unit and/or course as soon as practicable [HESA paragraph 166-30(3)(c); TEQSA Act paragraph 62P(3)(c)]
  • Keep up to date enrolment records on any domestic student enrolled in a replacement unit and/or course [HESA section 166-32; TEQSA Act section 62Q], including:
    • the student’s full name and contact details
    • the name of the replacement unit or the replacement course (and units of study) that the student is currently enrolled in
    • any student contribution amounts or tuition fees paid or incurred by the student for the replacement unit or for units of study of the replacement course
    • details of the replacement unit or units of study of the replacement course successfully completed by the student; and
    • details of the credits granted to the student for the replacement unit or units of study of original course successfully completed by the student.

Replacement provider fails to discharge its obligations

If a replacement provider fails to discharge their obligations the provider may be subject to a civil penalty or offence of strict liability [HESA sections 166-27 - 166-32; TEQSA Act sections 62N - 62Q].