Improving the sustainability of higher education

The higher education sector will be more sustainable through changes to the sharing of costs between taxpayers and students, improvements to the Higher Education Loan Program (HELP) and strengthening responsibility for recognising and rewarding quality learning and teaching.

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The Australian Government's proposed higher education reform package remains in the Senate. The Government is currently considering options as reforming the higher education system remains a priority, both to maintain and enhance Australia's world-class higher education sector, and to ensure future funding arrangements remain sustainable, in line with the reforms announced in the 2017-18 Budget. For current information, visit the Government's reform package webpage.

Increased student share of higher education funding

The maximum student contribution will increase from 1 January 2018 with an offsetting reduction in taxpayer funding. The Commonwealth will remain the majority funder of higher education teaching and learning.

The increase in fees will be phased in from 2018 to 2021, with a 1.8 per cent increase in each year cumulating to a 7.5 per cent increase by 2021. The proposal will affect all students who access a Commonwealth supported place (CSP) from 2018, irrespective of when they commenced their course. The new maximum student contribution amounts will apply to all students, including nursing and teaching students who commenced their course before 2010.

Efficiency dividend on the Commonwealth Grant Scheme

Subsidies provided under the Commonwealth Grant Scheme (CGS) will be subject to a 2.5 per cent efficiency dividend applied in each of 2018 and 2019. The existing medical loading of $1394 per EFTSL in 2017 will be extended to include veterinary science and dentistry units of study from 2018 to improve the funding arrangements for these courses.

Under this measure, an efficiency dividend of 2.5 per cent will apply to 2018 and 2019 CGS funding rates. The CGS rates will also gradually reduce in line with an increase in the maximum student contribution amount of 1.8 per cent each year, for four years, from 2018. 

In addition, this measure will extend the existing medical loading to include veterinary science and dentistry units of study from 2018. This will improve the funding arrangements for these courses.

New schedule of repayment thresholds for the Higher Education Loan Program

A new set of repayment thresholds will be introduced from 1 July 2018, affecting all current and future HELP debtors by changing the timing and quantity of their repayments.

The Australian Government is improving the sustainability of the HELP scheme by introducing a new set of HELP repayment thresholds and rates from 1 July 2018. This will help ensure that the HELP scheme is affordable and can continue to help people to participate in tertiary education.

Under this measure, the compulsory HELP repayment threshold will be set at $42,000 with a one per cent repayment rate, increasing to a 10 per cent repayment rate when a person's income reaches $119,882 and above.

New indexation arrangements for repayment thresholds for the Higher Education Loan Program

From 1 July 2019, the indexation of Higher Education Loan Program (HELP) repayment thresholds, currently linked to Average Weekly Earnings (AWE), will be changed to align to the Consumer Price Index (CPI).

In addition to the proposed changes of the compulsory repayment threshold, indexing the repayment thresholds at CPI (instead of AWE) will maintain the value of the thresholds in real terms, as the thresholds will increase in line with consumer prices rather than average wages.

Replacing subsidies with loans for most permanent residents and New Zealand citizens

From 1 January 2018, subsidies for most Australian permanent residents and most New Zealand (NZ citizens enrolling in a Commonwealth Supported Place (CSP) will be withdrawn, making them fee paying students.

Under current arrangements, most Australian PRs and most NZ citizens are treated as domestic students for the purposes of receiving a CSP but they are not eligible for the Higher Education Loan Program (HELP). Only Australian citizens, permanent humanitarian visa holders (PHVs), and certain NZ Special Category Visa holders (who arrived in Australia as minors and meet the long-term residency requirements) can access HELP loans. All other students have to pay upfront fees — presenting a significant barrier to higher education for many students.

Under this proposal, PRs and NZ citizens would gain access to HELP loans from 1 January 2018, removing the barrier of upfront costs. Affected PR and NZ students who are enrolled in a CSP at this time can continue in their CSP or transfer into a fee-paying place to access a HELP loan.

The current CSP and HELP eligibility arrangements will remain in place for all Australian citizens, PHVs, and New Zealand Special Category Visa holder students who meet the specific long-term residency criteria.

Information for Permanent Humanitarian Visa holders (PHVs)

This proposal also seeks to continue access to a CSP and HELP loan for PHVs in the particular circumstance where the PHV loses their PHV status due to travelling outside Australia after the travel facility of their visa has expired. In this instance, the PHV will be required to apply for a Resident Return Visa (RRV) on their return to Australia. A RRV is a permanent visa.

Quality in higher education learning and teaching

The Promotion of Excellence in Learning and Teaching in Higher Education (PELTHE) program will cease and the administration of the Australian Awards for University Teaching (AAUT) and the Office for Learning and Teaching digital repository will be transferred to Universities Australia.

Under this measure, the PELTHE program will cease from 1 January 2018. All financial obligations to ongoing grants made under PELTHE will be met, with the last payments to be made by the end of 2017.

Transfer of the Australian Awards for University Teaching to Universities Australia

From 1 January 2018, responsibility for the AAUT will be transferred to Universities Australia. This recognises that the best approach to the long-term sustainability of the awards lies with the higher education sector taking ownership and ensuring that the AAUT target exceptional performance in areas that are relevant, and important, to the sector.

Provider FAQs

For further information about how these reforms affect universities and private higher education providers, visit Provider FAQs.

Student FAQs

For further information about how these reforms affect students, visit Study Assist.

Factsheets

Factsheets on the Higher Education Reform measures.