Commonwealth of Australia Explanatory Memoranda

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HIGHER EDUCATION SUPPORT AMENDMENT (FEE-HELP LOAN FEE) BILL 2010

                               2008-2009-2010




               THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA








                          HOUSE OF REPRESENTATIVES








      HIGHER EDUCATION SUPPORT AMENDMENT (FEE-HELP LOAN FEE) Bill 2010








                           EXPLANATORY MEMORANDUM










 (Circulated by authority of the Minister for Education the Honourable Julia
                                 Gillard MP)


      HIGHER EDUCATION SUPPORT AMENDMENT (FEE-HELP LOAN FEE) BILL 2010


                                   OUTLINE

      The Bill will amend section 137-10(2)(a) of the Higher Education
      Support Act 2003 to increase the amount of the FEE-HELP debt to 125
      per cent of the loan.


The amendment will give effect to the recommendation of the Review of
Australian Higher Education to increase the loan fee for FEE-HELP for fee
paying undergraduate students to 25 per cent.


                              FINANCIAL IMPACT

The estimated financial impact of the increase in the loan fee is $17.6
million on fiscal balance over the period 2010-11 to 2012-13.
      HIGHER EDUCATION SUPPORT AMENDMENT (FEE-HELP LOAN FEE) BILL 2010


                              NOTES ON CLAUSES

Clause 1 - Short title

Provides for the Act to be cited as the Higher Education Support Amendment
(FEE-HELP Loan Fee) Act 2009.


Clause 2 - Commencement

Provides that the Act commences on the day on which it receives Royal
Assent.


Clause 3 - Schedule(s)

Provides that each Act that is specified in a Schedule is amended or
repealed as set out in the applicable items in the Schedule and that any
other item in a Schedule has effect according to its terms.


Schedule 1-Amendments

Higher Education Support Act 2003

Item 1 - Paragraph 137-10(2)(a)

Item 1 increases the amount of the FEE-HELP debt which is incurred under
paragraph 137-10(2)(a) from 120% to 125%.

Subsection 137-10(2) provides that the amount of a FEE-HELP debt is:
a) if the loan relates to FEE-HELP assistance for a unit of study that
   forms part of an undergraduate course of study - an amount equal to 120%
   of the loan; or
b) if, paragraph (a) does not apply - the amount of the loan.

This amendment will increase the FEE-HELP debt for those people to whom
paragraph 137-10(2)(a) applies.


Item 2 - Application

Item 2 contains an application provision which provides that the increase
in the FEE-HELP debts in Item 1 will apply to FEE-HELP debts incurred on or
after 1 July 2010 in relation to units of study whose census dates are on
or after 1 July 2010.

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