My previous post argued that some university students needlessly incur HELP debts and fails on their academic record. This post looks in more detail at several measures proposed in new legislation to alleviate this problem.

Although these measures arrived without warning they have a history. With some amendment and addition, they extend to public universities rules applying to non-university higher education institutions since the 2017 provider integrity legislation. In turn the 2017 non-university provider legislation imported vocational sector rules intended to avoid a repeat of the VET-FEE HELP debacle.

Provider marketing and student motivations

The issues in VET FEE-HELP and higher education are, however, quite different. The offering of inducements, misleading statements about HELP, and cold calling that would be restricted or banned for public universities by the new legislation never or rarely happen in higher education.*

But there is significant cultural, parental and sometimes political encouragement and pressure to go to university (which will be increased for prospective regional students under the Tehan package). This means increasing numbers of young people comply with social expectations and enrol at university but remain uncertain about their specific direction. More low-ATAR and part-time students take higher education courses, and they have an elevated risk of attrition.

The policy task here is not primarily dealing with malpractice, as it was in VET FEE-HELP reform, but managing risk prudently. Too much risk aversion means students who could succeed are denied entry to university or kicked out prematurely; too much risk taking means that students unnecessarily fail subjects and incur HELP debt.

In what follows I make reference to specific parts of the bill or current statute. This is to help other people working to understand the bill; it is complex and so if anyone thinks I have made a mistake or misinterpreted something let me know in comments or via email. HESA 2003 means the Higher Education Support Act 2003.

Genuine students

The existing rules for non-university providers, which would be extended to universities, use the language of a ‘genuine student’. This terminology is a hangover from the regulatory response to VET FEE-HELP. VET FEE-HELP students often weren’t genuine; some did not even know that had been enrolled, others only enrolled to get a free laptop. What we are really talking about in higher education is students who, for whatever reason, have disengaged from their studies. I will keep using the bill’s term, but read ‘genuine’ as mainly meaning ‘engaged’.

The current requirement that non-university providers assess that a FEE-HELP student is ‘genuine’ would be removed (repeal of section 104-1(1)(ab) of HESA 2003; appearing on page 30 of the draft legislation). I am not sure why this requirement is deleted; perhaps to avoid the need to document for every subject how the student’s genuineness was assessed.

The Department would, however, gain a new power to determine that either a Commonwealth support student (new section 36-5, page 25 of the draft legislation) or a FEE-HELP student (new section 104-1(1AA), page 30 of the draft legislation) were not genuine students, and therefore not eligible for Commonwealth support.

Factors the Department would consider in deciding whether students are genuine is whether they are reasonably engaged in the course, whether they have satisfied course requirements, and if the course is online how many times they have logged on. These factors are listed in the Higher Education Provider Amendment (Tuition Protection and Other Measures) Guidelines 2019.

How this would work in practice is unclear. The genuineness test applies to a student’s enrolment in the unit of study rather than the course. The major non-genuine indicators reveal themselves during the unit of study, but the Commonwealth does not collect any real-time data about progress during a unit of study.

The government could get more information, as the draft bill extends to universities investigative powers and audit provisions currently only applying to non-university providers: sections 19-71 and 19-80 of existing HESA 2003, activated by sub-sections (5) and (6) on pages 30-31 of the draft.

But with millions of subject enrolments every year, the investigators or auditors would need some clues. Perhaps students will complain, seeking to avoid paying for their courses – but if many of them don’t understand the census date, I doubt too many will be across the technicalities of HESA 2003. Perhaps the investigators or auditors will look for patterns of fails to decide which cases to audit.

If the Department determines that a student is not genuine, the university has to re-credit the student’s HELP balance by the student contribution amount (new section 97-50, page 30 of draft) or fees in the case of FEE-HELP students (existing HESA 2003 section 104-43 as amended). For Commonwealth supported students, the non-genuine student would no longer be counted for the purposes of Commonwealth Grant Scheme funding: section 33-5 of HESA 2003, as amended on pages 14-16 of the draft bill). The Administrative Appeals Tribunal can review the decision: section 206-1 of HESA 2003, as amended on page 33 of the draft bill.

How universities respond to this change will depend on how they perceive it being enforced. They might judge that the Department, which struggles to perform its current functions in a timely manner, and which has little experience or knowledge of the details of student performance or how these are recorded in university IT systems, will confine itself to the most egregious cases. Again we go back to VET FEE-HELP, where initially regulators felt that they did not have the full legal authority needed to intervene as things were obviously going wrong.

But if universities believe that they will be regularly audited or investigated they will terminate the enrolments of disengaged students more quickly, to avoid losing funding for high-risk students. Students who are clearly not studying at all would benefit from not being liable for student contributions. But grey area students, with some but insufficient engagement, will be hard cases. Universities would have to choose between losing funding or doing the student a potential injustice. Students can appeal against an adverse decision under the statutory grievance process: section 19-45 of HESA 2003.

Academic suitability at the subject level

Under rules that TEQSA administers, universities must already assess the academic suitability of applicants to each course. The draft bill (page 23) would activate section 19-42 of HESA 2003, as it already applies to non-university providers, so that universities would have to access academic suitability for each subject as well as course.

This is a general provision applying irrespective of the student’s funding status, so it also applies to international students. As an academic issue that parallels admissions requirements it might be better if TEQSA handled both, if section 19-42 is necessary.

The government’s explanations to date provide no direct guidance in interpreting section 19-42. The explanatory memorandum for the 2017 provider integrity legislation was also of no help, making irrelevant references to course admission issues already handled by TEQSA, and suggesting that section 19-42 would ‘deter any less scrupulous providers from undertaking on behalf of students, or assisting students to complete, the academic suitability assessments’. There is no evidence that this is a problem in higher education.

If a student was admitted on reasonable grounds to their course in the first place, and has made satisfactory progress since, that should qualify them as academically suitable for all subjects in their course.

Perhaps subject-level academic suitability might raise issues in subject smorgasbord courses like Arts. The minister suggested in his National Press Club address that Arts students could take maths, science or IT subjects to avoid the $14,500 student contribution applying to most humanities students. But perhaps section 19-42 would block them if they haven’t previously done prerequisite Year 12 subjects.

The other area where section 19-42 issues might arise is students continuing despite failing previous subjects. However, Grattan desktop research of a sample of universities in 2018 found that every institution already had processes for dealing with subject failure.

Universities that don’t assess at the subject level can be fined 120 penalty units, or $26,640 at current penalty unit rates.

Students taking too many subjects

Students will generally be prevented from taking a study load of more than two EFTSL: new section 36-12 for CSP students and 104-1AA for FEE-HELP students. An exception applies to students with ‘demonstrated capacity and capability’.

I haven’t seen any research on high-study-load students. But too many commitments would plausibly cause failure in one or both courses. In Grattan’s work on attrition, we took the very high attrition of part-time students as being strongly linked to competing work and family commitments.

Universities already regulate subject over-loading within their institution. But the Department says that about 2,500 students a year enrol at more than one university.

Unless students volunteer information, universities have no way of knowing about dual enrolments. On current Departmental practices, March 2020 enrolment data will be available some time in late 2021, far too late to fix excessive study loads in 2020. An enrolment IT upgrade should provide real-time information in 2021.

Given the small number of students involved, I think this measure is only worthwhile if highly automated, such such as being checked by the Department’s IT as enrolment information is uploaded.

However, the test of excess study load is the combined EFTSL of subjects with census dates in the last 12 months. Given that most subjects only last a few months, that’s a rough proxy for having too much work to do.

Conclusion

I think the government is, in broad terms, trying to address a real problem. But the government’s approach owes too much to how they responded to provider malpractice in the vocational sector. The situation in higher education is different. The legislation takes a heavy-handed approach to problems that don’t exist or could be dealt with more fairly and efficiently in other ways. The ‘regulatory necessity, risk and proportionality’ principle of the TEQSA legislation should be used instead. If I get time, I will post on better ways of handling disengaged students.

The next post will look at what happens when, despite the measures in the bill, students still fail more than half their subjects.

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* This aspect is not easy to find in the draft legislation. It’s at page 23 of the draft, under ‘Further application of amendments’. Essentially what this does is extend existing sections of HESA 2003 19-36, 19-36A,, 19-36B, 19-36C and 19-36D, which currently on apply to the non-university providers approved under section 16-25, to the listed providers made eligible for funding under section 16-5.