Should students lose Commonwealth support for failing too many subjects?

My previous post explained various measures proposed in new government legislation to reduce how many students fail subjects. These include restrictions on marketing to students who may not be serious, a new Departmental power to not pay universities for subjects if the student is deemed not ‘genuine’, a requirement that universities refund student contributions or fees where the student is not genuine, a new obligation to check the student’s academic suitability at the subject as well as the course level, and restrictions on students taking more subjects in a year than they can manage.

Most of yesterday’s media attention, however, focused on a different part of the legislation, restricting Commonwealth Grant Scheme and HELP entitlements for students who fail too many subjects.

In explaining this change I am, as with the previous post, going to cite legislative provisions to help people who are working on providing feedback on the bill. HESA 2003 means the Higher Education Support Act 2003. As before, please feel free to point out errors or alternative interpretations in comments or via email.

General rule – failing more than half of subjects leads to loss of funding entitlements

The general rule is that students who fail more than half their subjects in a course will lose their entitlement to Commonwealth support: new section 36-13 of HESA 2003 for Commonwealth supported students, for FEE-HELP students existing section 104-1A activated by schedule 5 part 2 of the draft legislation. At public universities, FEE-HELP borrowers are mainly postgraduates, as they cannot offer undergraduate full-fee places except in narrow circumstances.

For students in bachelor or higher degrees, the subject fail rate is not calculated until they have undertaken eight or more subjects. In first year, failing 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 fails

Contrary to some 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 four of eight subjects in first year. They keep their entitlement. But if the student then fails three of four subjects in the first semester of second year their running total is seven fails 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 fails The bachelor/postgraduate rule refers to ‘units of study at that provider as part of that course of study’, emphasis added (proposed section 36-13(1)(a)(i)). I take that as meaning that 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 (proposed section 36-13(1)(b)(i)). Say a student began in an enabling course, progressed to one of the minister’s undergraduate certificates, 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 bill allows.

Existing unsatisfactory progress processes

Some of the comments I heard or saw yesterday seemed to assume that students failing 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

The difference between current standard practice and the government’s bill is not whether the student is at risk of losing their enrolment and funding. They are in trouble either way. The difference between the status quo and the government’s bill is the considerations that can be taken into account in deciding whether to give the student a second chance.

The government’s policy links those considerations back to sections 36-20 and 36-21 of HESA 2003, with the detail in legal guidelines (draft bill page 37, section 36-13(2)(b)). These provisions currently determine when to refund HELP debt for certain students who did not complete subjects.

The relevant circumstances have to be beyond the student’s control and not occur, or have their full impact, until after the subject’s census date. The examples given in the guidelines include: 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.

A number of student cases on this 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.

These rules won’t cover more general issues, such as trouble adapting to university life, or lower-level medical issues that make study more difficult but don’t meet the level required for a section 36-20 HELP remission. Universities are, however, free to take these considerations into account as part of the unsatisfactory progress process.

I haven’t seen any research that assesses outcomes for students given a second chance. But a university’s judgment on the student’s specific circumstances is likely to be fairer than an inflexible bureaucratic rule.

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.

Timing of new rules

For anxious 2020 Year 12s, it is worth noting that this fail-half-or-more rule only applies to students starting on 1 January 2022 or later: pages 36-37 of the draft legislation.

Youth Allowance

A final point worth noting is that even if Commonwealth support continues for course funding, income support may not. The Youth Allowance rules limit the amount of time students can stay on benefits, in ways that limit scope for failing and repeating large numbers of subjects.


It would be worth doing an analysis of students who are re-admitted to a course despite a high subject failure 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, or indeed for any of its proposals, other than how many students are enrolled at more than one university.

In the absence of contrary evidence, the current situation in which the funding entitlements of failing students are determined by universities, considering all relevant circumstances, is preferable to the government’s proposal.

One thought on “Should students lose Commonwealth support for failing too many 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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