Wednesday, 28 March 2018
Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018; Second Reading
That this bill be now read a second time.
This bill, the Student Loans (Overseas Debtors Repayment Levy) Amendment Bill 2018, and the Education and Other Legislation Amendment (VET Student Loans Debt Separation) Bill 2018, work together to separate VET student loan debts from other forms of Higher Education Loan Program debts.
The two bills achieve this while maintaining and aligning the fundamental repayment features of the HELP program with the VET Student Loans program.
This includes the requirement for debtors who reside overseas to make repayments against their debts.
Vocational education and training is central to Australia's economic prosperity and employment outcomes for students.
Income contingent loans in VET help achieve this prosperity by assisting students to access higher level VET qualifications.
The government supports income contingent loans—without them, students would miss out if they could not afford to pay full tuition fees to undertake higher level VET qualifications.
The VET Student Loans program provides capped income contingent loans to students undertaking these qualifications.
The Education and Other Legislation Amendment (VET Student Loans Debt Separation) Bill 2018 provides for the ability to better measure the program's fiscal sustainability, in conjunction with this bill.
There is currently limited capacity to measure the sustainability of the VET Student Loans program because a debtor's HELP repayments are not disaggregated by loan type.
Irrespective of whether the debt applies to HECS-HELP, FEE-HELP, SA-HELP, OS-HELP, historical VET FEE-HELP or VET student loans assistance, loan repayments are made towards a single, aggregated HELP debt.
This means the government cannot accurately determine what proportion of which form of HELP assistance paid by the government has been repaid by debtors.
Similarly, where a HELP debt is not being repaid, it is not possible to identify the form of HELP assistance the debt relates to.
The Education and Other Legislation Amendment (VET Student Loans Debt Separation) Bill 2018 separates VET Student Loans debts from other forms of HELP debts, providing greater transparency of repayment rates for VET students and better information to inform policy decisions and the public.
That bill will ensure the repayment thresholds, repayment rates and indexation with respect to VET student loan debts will be the same as the repayment thresholds, repayment rates and indexation for HELP debts.
Consistent with existing arrangements, the two bills together ensure that persons residing overseas who have a VET student loan debt make repayments in respect of those debts.
This is not a substantive change from the existing circumstances. VET Student Loans debtors who reside overseas are already required to make repayments of those debts.
This is by virtue of VET student loan debts being HELP debts.
The two bills will support more timely, transparent and accurate reporting on the fiscal sustainability of the VET Student Loans program, and support greater public accountability of the program.
I commend the bill.