Should students lose Commonwealth support for failing to complete subjects?

Post updated 1/01/22: Clarifying that the rules apply to non-completion of subjects as well as academic fails, updating to take account of amendments, and removing now irrelevant 2020 content.


On 1 January 2022 a further element of the Job-ready Graduates package commenced, which restricts Commonwealth support for students who fail to complete at least half the subjects they have taken.

General rule – failing to successfully complete more than half of subjects leads to loss of funding entitlements for that course

The general rule is that students who fail to successfully complete more than half their subjects in a course will lose their entitlement to Commonwealth support: section 36-13 of the Higher Education Support Act 2003 (HESA 2003) for Commonwealth supported students, for FEE-HELP students section 104-1A . At public universities, FEE-HELP borrowers are mainly postgraduates, as they cannot offer undergraduate full-fee places except in narrow circumstances.

In the original version of this post and my commentary while Job-ready Graduates was being debated I focused on subject fails, but the legislation’s terminology is ‘did not successfully complete’ rather than ‘the university gave a mark of less than 50 per cent’. This distinction is important, because it means that students who withdraw from a subject after the census date may still be able to avoid academic penalty from their university, but this subject will still count towards the tally of subjects that could lead to a funding penalty.

The government does not routinely publish data on withdrawing without academic penalty, but as of the middle of last decade this affected 2.4 per cent of all bachelor degree subject enrolments. Another 12.7 per cent of subjects were failed.

Distinctions between courses

For students in bachelor or higher degrees, the subject failure-to-complete rate is not calculated until they have undertaken eight or more subjects. In first year, failing to complete five or more of the standard eight subject load would normally lead to loss of Commonwealth support (there are exceptions, discussed below).

For students taking an enabling course, undergraduate certificate, diploma, advanced diploma or associate degree the 50 per cent starts calculating from four subjects. Four subjects is effectively mid-year for a standard one year diploma. On Twitter, Beni Cakitaki also highlighted enabling courses that use shorter, sharper subjects, creating more opportunities to fail.

A running count of failure to complete subjects

Contrary to some 2020 media reports, the rules apply throughout a course, not just in first year. However, fail rates are higher for commencing than continuing students (see figure 3.2 in Mapping Australian higher education).

The maths of funding eligibility would need careful monitoring. Say a student fails to complete four of eight subjects in first year. They keep their entitlement. But if the student then fails to complete three of four subjects in the first semester of second year their running total is seven failures to complete of twelve subjects taken = 58 per cent.

The separate sub-sections for bachelor-and-above courses and sub-bachelor courses have a wording difference that might also be significant in calculating the running tally of not completed subjects.

The bachelor/postgraduate rule refers to ‘units of study at that provider as part of that course of study’, emphasis added (section 36-13(1)(a)(i)). With each new course the fail count goes back to zero.

But the sub-bachelor rule applies to ‘units of study at that provider as part of a course of study’, emphasis added (section 36-13(1)(b)(i)). Say a student began in an enabling course, progressed to an undergraduate certificate, and then articulated into a diploma. Instead of the fail count going back to zero with each course move, I think the use of ‘a course’ rather than ‘the course’ means that the fail count would accumulate across courses.

The concern here is that we are dealing with students who will generally be at higher risk of failing than bachelor degree students. Enabling students by definition have some academic weakness. Pathway diploma students are a lower-ATAR group with higher-than-average fail rates. Managing them and the perhaps winding academic path they need to take requires more discretion than this law allows.

Existing unsatisfactory progress processes

Some comments on these provisions in 2020 assumed that students failing to complete more than half their subjects would be simply be allowed to continue with their studies, except for this harsh bill.

That is not the case. Students who fail more than half their subjects are already at risk of exclusion. As part of the Grattan Dropping Out report research, in 2018 a colleague collated a sample of university unsatisfactory progress policies. In almost every one of them, failing more than half of subjects taken in a semester will lead to a formal intervention or warning. The others had low average marks indicators that imply subject fails.

If poor performance persists, the student will have to ‘show cause’ why the university should not exclude them. Victoria’s University’s policy is an example.

Considerations in deciding whether to exclude a student from funding

The original Job-ready Graduates bill allowed for circumstances in which students who had failed to complete sufficient subjects could nevertheless keep their funding entitlement. The difference between current standard practice and the new law is not whether the student is at risk of losing their enrolment and funding. They are in trouble either way. The difference between the pre-2022 status quo and the new rules is the decision process in deciding whether to give the student a second chance.

Under the new rules, to be given a second chance ‘special circumstances’ now need to apply in a specific time period.

These circumstances need to be beyond the student’s control and not occur, or have their full impact, until after the subject’s census date, and make it impracticable for the student to complete the requirements for the unit: section 36-13(3).  

Originally the circumstances were to be based on those listed in the Administration Guidelines, which cover students seeking remission of HELP debt. These included medical conditions that prevent the student completing the subject, the medical condition or death of a family member, an uncontrollable change in employment arrangements, or where the provider has changed the subject in ways that make completion difficult.

These considerations are now set out in section 36-13(5), and were broadened after criticism of the fail-to-complete policy. In the aftermath of the 2019-20 bushfires and during COVID ‘natural disasters’ or other emergencies were added, and more flexibly ‘any other circumstances that the provider considers relevant’. 

These additions will probably help some students, but section 36-13(3) still applies. Problems such as trouble adapting to university life would probably not satisfy the ‘beyond the student’s control’ requirement and lower-level medical issues would probably not satisfy the impracticability requirement.

The census data provision is also important. A number of student cases on HELP remissions have been considered by the Administrative Appeals Tribunal over the years. From the judgments I have read, often it is the census date aspect that trips the student up – they did have problems that made it difficult to complete their subject(s), but these were apparent prior to the census date. Not knowing about the census date is costly.

Continuing on a full-fee basis

The section 36-13 rule is about Commonwealth support, which allows for a separate university process that lets the student on an upfront full-fee basis. Government advisory material on the equivalent FEE-HELP provision suggests that this could be used to bring the pass rate back up to the level required for Commonwealth funding.

However, under the new section 19-42 of HESA 2003 a student must be judged academically suited for every subject they undertake, whether Commonwealth supported or not. This may prevent the university from letting the student continue on any funding basis.

Second chances in other courses or universities

Although the fail rule could see students lose funding for their current course, it does not exclude them from the system.

The bachelor/postgraduate rule refers to ‘units of study at that provider as part of that course of study‘, emphasis added. In other words, the student could continue at another university or in other course.

The Grattan Dropping Out report has some evidence on this option. It confirms that prior academic performance is predictive of completion rates. Students who have previously failed half or more of their subjects have an elevated risk of non-completion. But even with a shaky start, more than half the students who start a new course despite a previous high failure rate eventually get a degree.

That shift in wording for sub-bachelor students, from ‘that course of study’ to ‘a course of study’ with that provider, might cause issues here as well. It may prohibit failing sub-bachelor students from all other courses of study at that provider. They could, however, move to another provider. It’s not clear to me that moving rather than staying would increase a student’s chances of academic success.


It would be worth doing an analysis of students who are re-admitted to a course despite a high subject failure-to-complete rate (the Grattan analysis was of students who failed and changed course). If a large proportion are being set up for further fails and more HELP debt then that is a problem. But the government hasn’t provided any evidence on this point.

In the absence of contrary evidence, the previous situation in which the funding entitlements of failing students are determined by universities, considering all relevant circumstances, is preferable to the current situation of inflexible bureaucratic rules.

One thought on “Should students lose Commonwealth support for failing to complete subjects?

  1. Boo hoo for the universities, this has been imposed on independent providers using FEE-help for Bachelor students since 2017 – it is nothing more than slowly getting a level playing field for independent providers against the universities who, TEQSA, for so long has said were low risk and the privates were where the problems are….. it appears the universities are not as squeaky clean as the Chief Commissioner has made out to be in his opening address at a number of TEQSA conferences….


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