Budget 2014 - Student Overview

Higher Education - it's worth it!

This information is for domestic students who are studying at campuses in Australia.

The Australian Government is introducing a range of reforms to improve our higher education system. These changes will create greater choice for all students, whatever you choose to study and wherever you go. By fostering the autonomy, innovation and creativity of our universities and higher education institutions, they will be better equipped to support you to develop the skills needed for local and global labour markets.

The higher education reform measures which are most likely to affect you are:

  1. Changes to the level of subsidy provided by the Government for Commonwealth supported places and the deregulation of tuition fees;
  2. Support for diploma, advanced diploma and associate degree courses;
  3. Support for students at all higher education institutions; and
  4. Changes affecting the repayment of HELP loans.

It is important that current and future students understand how these changes will affect them.

For a complete list of Higher Education reform measures announced in the 2014-15 Budget go to the Higher Education Budget (opens in a new window) page.

The Government is committed to having an affordable and sustainable higher education system. This means re- balancing the share of costs paid by students and the Government. This recognises the benefits you get from higher education through increased job opportunities and higher incomes.

Students will still be able to defer payment of their fees through HELP if they meet the HELP eligibility requirements.

Students who were enrolled in, or had accepted, a Commonwealth supported place (CSP) on or before 13 May 2014 will continue to be charged under existing arrangements until they finish their study or until the 31st of December 2020 (whichever comes first). This covers people currently enrolled in undergraduate courses and non-research postgraduate courses.

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FREEDOM TO CHOOSE YOUR PATH OF STUDY

The changes announced in the 2014-15 Budget will give all Australian students who want to undertake a diploma, advanced diploma or associate degree course the same access to Commonwealth subsidies as students doing bachelor degree courses at public universities.

Currently there is only a limited number of Commonwealth supported places for students undertaking a diploma, advanced diploma or associate degree course.

From 1 January 2016, the Government will be extending the demand driven funding system to include all diplomas, advanced diplomas and associate degree courses.

These shorter courses are valuable in quickly providing students with skills needed in local regions. They also provide important pathways for less-prepared students wanting to undertake higher education study.

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FREEDOM TO CHOOSE WHERE YOU STUDY

The changes announced in the 2014-15 Budget will give all Australian undergraduate students access to Commonwealth subsidies, creating a fairer system of support.

Currently many students who choose to study at a TAFE which offers higher education courses, a private university or a private college are excluded from Commonwealth subsidies. While they may be able to defer payment of their tuition fees through HELP, they are subject to loan fees and limits which do not apply to Commonwealth supported students. The Government is introducing a more equitable system of support for these students.

From 1 January 2016, all Tertiary Education Quality Standards Agency (TEQSA) accredited higher education institutions will be able to choose to provide Commonwealth supported places for their students. This will cover students undertaking an accredited bachelor, diploma, advanced diploma or associate degree course.

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CHANGES TO COMMONWEALTH SUBSIDIES AND STUDENT CONTRIBUTIONS – from 1 January 2016

Under current funding arrangements for Commonwealth supported students, the Government pays most of the cost of courses and students make a contribution. The Government sets the maximum amount of contribution which a student can be charged.

From 1 January 2016, the maximum contribution amount for students at universities and other higher education institutions will be removed and the Commonwealth subsidy paid toward the cost of the course will be reduced. Universities and higher education institutions will be able to determine the fees they charge Commonwealth supported students.

Students will continue to be able to defer payment of their student contribution through the Higher Education Loan Program (HELP). Higher education graduates will not be required to commence repayment of their HELP debt until their income reaches the minimum repayment threshold which is estimated to be $50,638 in 2016-17.

I’m already studying – what happens to me?

Some students who are preserved funding students will continue to receive subsidies and pay tuition fees at existing levels until they finish their study or until 31 December 2020 (whichever comes first).

A preserved funding student is a student who, on 13 May 2014:

  • was enrolled as a Commonwealth supported student, either at a university or other higher education institution; or
  • had accepted an enrolment offer as a Commonwealth supported student either at a university or other higher education institution and was on an approved deferral of the commencement of their course; or
  • had commenced their course as a Commonwealth supported student and was on an approved leave of absence; or
  • had accepted an offer of a Commonwealth supported place but the relevant enrolment period for the course had not yet closed, and the person then enrolled in the course by the end of the enrolment period.

Preserved funding students who complete their course and commence in another course within twelve months as a Commonwealth supported student (either at their undergraduate or postgraduate level) are also eligible for preserved funding status for their second course. They will continue to be eligible until they finish their course or until 31 December 2020 (whichever comes first).

Students should note that preserved funding students who are offered a Commonwealth supported place in a postgraduate course at the conclusion of their undergraduate course but choose to defer the commencement of their course may not be guaranteed a Commonwealth supported place when they return, and hence may forego their preserved funding status.

Students who have a HELP loan need to be aware of other changes that the Government is making to HELP. These are outlined below.

I am thinking of studying in the future – how will these changes affect me?

The new funding arrangements will affect all Commonwealth supported students who are not a preserved funding student. Changes to Commonwealth subsidies and student contributions do not take effect until 1 January 2016. Students will be charged under the existing arrangements until 31 December 2015.

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CHANGES AFFECTING THE REPAYMENT OF HELP LOANS

Access to higher education should not be based on a person’s ability to pay tuition fees. All eligible higher education students studying with an approved Higher Education Institute will continue to be able to defer payment of their student contributions or tuition fees through HELP.

These changes make the HELP scheme sustainable and ensure it will continue to be available for current students and future generations of Australians seeking the knowledge, skills and opportunities that come from higher education.

These measures are as follows:

Equal access to loans for all Australian undergraduate students

The existing 25 per cent FEE-HELP loan fee and the 20 per cent VET FEE-HELP loan fee will be removed from 1 January 2016. Students who have already incurred the loan fee prior to this date will still be required to repay it.

Removal of the FEE-HELP limit

The FEE-HELP limit will be removed and there will be no limit on the amount of FEE-HELP and VET FEE‑HELP assistance that a student can access. This change will apply for all students from 1 January 2016.

Simplifying HELP

From 1 January 2016 FEE-HELP and HECS-HELP will be merged into a new single scheme called HECS-HELP. All students who were eligible for either HECS-HELP or FEE-HELP will continue to be eligible for HELP.

Revision of HELP repayment thresholds

A new minimum repayment threshold for HELP will be introduced from the 2016‑17 income year (1 July 2016‑30 June 2017). In that year, graduates will commence repaying their HELP debt once their income reaches an estimated $50,638. A 2 per cent repayment rate will apply for those with incomes above this new threshold, up to the existing threshold (estimated to be $56,264 for the 2016-17 income year).

The repayment arrangements applying to students with incomes above the existing repayment threshold will not change.

Changes to indexation arrangements for HELP debts

HELP debts will be indexed by the Treasury 10 year bond rate (to a maximum of 6.0 per cent per annum) rather than the Consumer Price Index (CPI). This means that the government is lending money at broadly the same interest rate as it borrows money. The new arrangements will apply to all HELP debts (including those incurred by former students, continuing students and new students) beginning with the indexation of debts on 1 June 2016.

People with a HELP debt have indexation applied to their debt every year on 1 June. Debts are not indexed until they are 11 months old. Indexation can occur while the person is still studying, and continues to be applied each year until the person has repaid their debt.

In respect of HELP indexation, all the Government is doing is changing the rate.

Removal of HECS-HELP Benefit Scheme

The take-up of the HECS-HELP benefit has been low, providing evidence that it has not been an effective employment incentive for these occupations. The benefit currently reduces HECS‑HELP repayments for graduates who take up employment in education, nursing, early childhood, maths and science. The HECS-HELP benefit will be discontinued for periods of employment after 30 June 2015. Graduates will have until 30 June 2017 to claim HECS-HELP benefit for employment prior to 1 July 2015.

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Improving Opportunity and Access

What additional assistance is available to disadvantaged students to help them participate in higher education?

Commonwealth Scholarship scheme

As a result of the 2014-15 Budget higher education institutions will be required to commit $1 in every $5 of additional revenue to a new Commonwealth Scholarship scheme to support student access, participation and success. Universities and other higher education colleges will provide tailored, individualised support to students including needs-based scholarships to help meet costs of living, fee exemptions, tutorial support, and assistance at other critical points in their university career.

These Commonwealth scholarships are in addition to the existing student income support payments which are available to eligible students from the Department of Social Services. More information about these student support payments available on the Student Income Support page.

Universities and other higher education institutions who are required to make the Commonwealth scholarships available will be expected to provide the scholarships from 1 January 2016.

Students will need to contact their university or higher education college closer to that date.

Delivering real benefits to students.

You may be able to access additional help through your university or higher education institution if you need more support to succeed in higher education because of disrupted education or for some other reason. Universities can provide support through individualised arrangements such as tutorial assistance, personal support (e.g. counselling and guidance), and financial support for example. Potential students from disadvantaged backgrounds who may not otherwise have attended university will be supported through Higher Education Participation and Partnerships (HEPP) funded outreach activities such as in‑school programmes where they are introduced to the idea of university study, exposure to the kinds of learning activity that takes place in universities, and work that helps potential students gain the required academic skills to succeed in university study.

Pathways to University

The changes announced in the 2014-15 Federal Budget will give all Australian students who want to undertake a diploma, advanced diploma or associate degree course the same access to Commonwealth subsidies as students doing bachelor degree courses at public universities.

From 1 January 2016, the Government will be extending the demand driven funding system to include all diplomas, advanced diplomas and associate degree courses.

These shorter courses are valuable in quickly providing students with skills needed in local regions. They also provide important pathways for less‑prepared students wanting to undertake higher education study.

In addition the Commonwealth provides specific funding to support potential students who want to go to University but have not completed high school or may not have the required academic skills to gain entry to a degree program. These enabling courses are short term courses that focus on specific skills required to succeed at university and are offered by all universities. You should contact your university to find out more about this pathway to university.

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Further information and FAQs for students

The Government recognises that these reforms affect many Australians and that you will have important questions that have an impact on your future. We are currently working through implementation arrangements and look forward to providing you with more information on how these measures will be implemented in the near future. For a complete list of higher education reform measures announced in the 2014‑15 Budget go to the Higher Education Budget (opens in a new window) page.

See also:

FAQs for current students

FAQs for future students

FAQs for former students

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