CTH Introduces Job-Ready Graduates Bill To Reform Higher Education Funding

Thursday 27 August 2020 @ 12.20 p.m. | Legal Research

On 26 August, the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 (Cth) (‘the Bill’) was introduced to the House of Representatives. An exposure draft of the Bill was released earlier, on 11 August 2020, and the consultation process has recently concluded. According to a June Media Release, Hon Dan Tehan, the Minister for Education, stated that the Bill will “incentivise students to make more job-relevant choices, that lead to more job-ready graduates, by reducing the student contribution in areas of expected employment growth and demand.”

Redesign of the Commonwealth Grant Scheme and University Costs

Firstly, the Bill proposes a redesign of the Commonwealth Grant Scheme (CGS) to modify the amount of money that the Government will provide universities for different courses. The Explanatory Memorandum states that this measure is intended to ensure funding is “ directed to areas of national priority and employment growth”. According to the Minister’s Second Reading Speech:

  • Students enrolled in teaching, nursing, clinical psychology, English and languages will pay 42 per cent less for their degree.
  • Students who study agriculture and maths will pay 59 per cent less for their degree.
  • Students who study science, health, architecture, environmental science, IT, and engineering will pay 18 per cent less for their degree.

The Minister further stated that:

“Based on university data provided by the sector to Deloitte, the government has better aligned the cost to students and the taxpayer of teaching a degree with the revenue a university receives to teach that degree.”

Furthermore, the loan fee for a FEE-HELP loan will be reduced from 25 to 20 percent for an undergraduate student at a non-table B provider. Notably, the loan fee only applies to undergraduate students who are not in Commonwealth supported places at a non-university higher education provider, or at a Table A university.

Specifically for the disciplines of social work and psychology, the Bill intends to establish new professional lower-cost pathways under the Commonwealth Grant Scheme.The Minister specifically referenced the value of such disciplines for providing support for the recovery from COVID-19, drought, bushfires and other events.

The Funding Envelope

Secondly, the Bill proposes the introduction of a funding envelope which will combine funding for Commonwealth supported places across levels of higher education. Currently, universities receive funding allocated to specific streams for bachelor, postgraduate, and sub-bachelor students. According to the Discussion Paper, the rigidity of this funding structure often results in both over-funding and under-funding of various groups. By amalgamating these streams, the Bill intends to provide more flexibility for universities in order to maximise public investment in the university sector.

Collaboration with Industry

Thirdly, the Bill intends to encourage the integration of work experience and industry practice into university education. The Bill proposes to extend Commonwealth support to more 'work experience in industry' units of study. These subjects are currently subject to a broad exclusion from CGS funding.

Support for Regional and Remote Students

The Bill contains various measures intended to support regional and remote students pursue tertiary education. Firstly, the Bill proposes that Table A providers receive funding for Indigenous students from regional and remote Australia on a demand-driven basis. Effectively, this will ensure that an Indigenous student from regional and remote Australia admitted to a table A university will have a bachelor-level Commonwealth supported place. The Higher Education Support Act 2003 provides a list of universities classified as Table A providers. Furthermore, according to the Second Reading Speech, amendments to the Indigenous, Regional and Low Socio-Economic Status Attainment Fund (IRLSAF) so that more regional, rural, Indigenous and low-SES students “are supported to access university, graduate from their studies, and enjoy the benefits higher education offers”.

Implementation of the Bill

Contingent to the Bill’s passage, certain provisions have been included outlining how the Bill will be implemented within the current education system. Firstly, the Bill proposes a “transition fund” which according to the Second Reading Speech, is intended to ensure “that table A providers maintain their revenue over the grant years 2021 to 2023, while the Job-ready Graduates Package is implemented.” Secondly, the Bill establishes grandfathering arrangements to ensure that the new costs arrangements will only apply to students enrolling in 2021.

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Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 (Cth) and additional materials available from TimeBase's LawOne Service

Media Release: Job-ready graduates to power economic recovery (Minister of Education - Hon Dan Tehan, 19 June 2020)

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