(AUS) Setting Up and Using Australian Loan Processing

This chapter provides an overview of loan processing for Australian higher education and discusses how to:

• Set up Australian loan defaults.

• Review Higher Education Contribution Scheme (HECS) results and run the HECS reconciliation.

• Create and update FEE-HELP loans.

• Create and update OS-HELP loans.

• Create Commonwealth Assistance Notices (CAN).

Understanding Loan Processing for Australian Higher Education

The Higher Education Loan Program (HELP) is a suite of income contingent loans: HECS-HELP, FEE-HELP, and OS-HELP.

This section discusses:

• HECS-HELP.

• Tuition Calculation for HECS.

• FEE-HELP.

• OS-HELP.

• How to prepare for setting up HELP.

HECS-HELP

The Higher Education Contribution Scheme (HECS) provides students with a loan to cover all or part of the Student Contribution amount. Students may also receive a discount if they choose to pay their Student Contribution up-front. HECS-HELP loans are available to eligible students enrolled in Commonwealth-supported places. If a student receives a HECS-HELP loan, the Australian government pays the loan amount directly to the higher education provider on the student's behalf, and a HECS-HELP debt is recorded with the Tax Office. No loan fees are charged on HECS-HELP loans.

HECS requires most students to contribute to the cost of their higher education. Student Contribution is calculated for each class based on the academic student load—the EFTSL (Equivalent Full Time Student Load) and annual course contributions—HECS Bands. Student Contribution is calculated based on a student's load as of the census date for the term. A student's total Student Contribution for the term is based on the sum of the Student Contribution amounts for each class in which the student is enrolled for that term.

Students can pay their Student Contribution in full, make a partial payment and defer the remainder, or defer the entire amount. Students who defer the payment of their Student Contribution incur a debt with the government that is repaid through the taxation system when the student's salary is above a predetermined level.

Administering HECS requires you to complete tasks using the PeopleSoft system as well as tasks outside the system. The tasks that use the system during HECS processing are listed here. They are organized into groups based on the time frame for performing the tasks during the academic cycle.

At the time of enrollment:

• Estimate each student's Student Contribution by term for the classes in which the student is enrolling.

  The Student Contribution is a type of tuition fee and that you calculate using the Tuition Calculation process.

• Inform all students in writing of their Student Contribution by sending student bills.

By the census date of each term:

• Collect and enter into the system full up-front payments from students who choose the up-front payment option for HECS payments.

• Collect and enter into the system partial up-front payments from students who choose the deferred payment option for HECS payments.

After the census date of each term:

• Calculate the actual Student Contribution of each student as of the census date.

• Inform all students in writing of their Commonwealth Support.

  A CAN must be issued within 28 days of the class census date.

• Refund any excess contributions, confirm payment application for Student Contributions, or both.

Note. Every time tuition is calculated or a payment is processed for a student, the system updates the student's HECS calculations.

• Supply the Australian Tax Office (ATO) with a file of data containing details of the HECS liabilities of students who elect to defer payment of their contributions together with relevant personal identification details required by the ATO.

  Do this through Department of Education and Science Training (DEST) reporting.

• Supply DEST with a file of data on HECS liabilities for all students.

  Do this through DEST reporting.

• Supply DEST with information regarding adjustments to up-front payments and refunds due to special circumstances.

• Supply the ATO with information about changes to HECS liabilities that were made after the initial data files were sent.

  Do this through DEST reporting.

Students must complete a Commonwealth Assistance Form (CAF) for each program in which they are enrolled before the census date of the first term in which they commenced their program of study. Students who want to defer all or part of their Student Contribution must provide a valid Tax File Number (TFN) on the Payment Options Declaration form. Students cannot be enrolled if they have not completed these requirements.

Calculating Student Contribution and Deferment Amounts

The Higher Education Support Act 2003 (HESA) requires higher education providers to allocate individual units of study (courses) to funding clusters. Units of study are allocated to funding clusters based on their classification against the Australian Standard Classification of Education (ASCED). Each provider then determines the Student Contribution amount applicable to each unit of study up to a maximum Student Contribution amount allowed for the funding cluster in which the unit is classified. The funding clusters are currently grouped into four contribution bands.

Commonwealth-supported students are classified into three groups for the purpose of determining the maximum Student Contribution amount:

• Post-Reform students (student commenced course of study on or after 1 January 2005).

• Pre-2005 Differential HECS students.

• Pre-1997 students or Fixed HECS.

If students make up-front payments, they may be eligible for a discount on their Student Contribution amount.

If a student withdraws from a program of study on or before the census date, no Student Learning Entitlement is consumed and no contribution is payable. The institution must refund any payments made by the student for that term.

Making Payments

Students can pay their Student Contribution in these ways:

• Pay the Student Contribution in full up-front and receive a 20 percent discount on the total Student Contribution for the term.

• Make a partial up-front payment of 500.00 AUD or more and receive a 20 percent discount on that payment; the remainder of the Student Contribution is deferred. (Note that if a student's assessed fees are less than 500.00 AUD, then he or she can make a partial payment and still receive the 20 percent discount.)

• Make a payment of less than 500.00 AUD with no discount applied; the remainder of the Student Contribution is deferred.

• Defer payment and repay through the ATO when the student's income exceeds the minimum repayment threshold.

Students who complete the CAF are required to indicate their intended payment option on the form. This information is intended to provide institutions with an indication of students' intended payment options. A student's actual payment option is determined after the census date based on the up-front payments that the student made on or before the census date. This determines the student status that is applicable at the enrolment level.

Note. After the census date, students can make only repayments of deferred Student Contribution to a branch of the ATO.

Making Full Up-Front Payments

Students who want to make a full up-front payment must pay 80 percent of their Student Contribution for the term by the census date or the date set by the institution, whichever is earlier. When students pay 80 percent of their total Student Contribution, the remaining 20 percent of their Student Contribution is discounted. If a student has not made a full up-front payment of the Student Contribution for the term by the census date and has not provided a TFN, the institution must cancel the student's enrollment.

A payment of more than 80 percent of the total Student Contribution for a term cannot be used to reduce the student's HECS debt from previous terms. Any overpayment amount should be left on the student's account as an unapplied charge or can be refunded to the student.

Making Partial Up-Front Payments

Students can choose to make partial up-front payments toward their Student Contribution. If a student makes an up-front payment of 500.00 AUD or more, the student can receive a discount on that payment. Partial up-front payments can be made to the institution only before the census date.

Institutions can accept partial payments that total less than 500.00 AUD; however, payments that total less than 500.00 AUD are not discounted (unless the total Student Contribution amount applicable to the student, program, and census date is less than 500.00 AUD).

Deferring All Charges

Eligible students can choose to make no up-front payments and defer the entire Student Contribution amount. If they choose this option, they must provide a TFN to their institution on the CAF. No discount exists for students who defer their entire Student Contribution amount.

Tuition Calculation for HECS

The Tuition Calculation process calculates tuition using HECS bands. When you set up Term Fee codes for HECS charges, you indicate that the fee should be charged by band. When Tuition Calculation processes a fee charged by band, the process knows that it must calculate the HECS load factor, which is the EFTSL using billing units. The HECS load factor calculation uses the Level/Load rules from the student's academic program. The process calculates the HECS load factor for each class. It then calculates the charges for each class in which the student is enrolled by using the band assigned to the class and the band charge that is indicated on the Fee Code table (SEV_FEE_TBL). Fee codes are assigned to tuition groups and students are selected for tuition groups based on the selection criteria that is set up for the tuition group.

To calculate a HECS discount waiver or HECS deferral waiver, the Tuition Calculation process references the student liability status code, which is indicated on the AUS Student Enrol page in the Enrolment component. The appropriate discount or deferral waiver is created based on the enrolment level student status.

When a student makes a payment for HECS, the posting program updates the enrolment-level student liability status, if necessary, based on the amount of the payment. For example, if a student indicates that he or she will make a partial payment, but the student actually makes a full payment, the Payment Posting process changes the enrolment level student status code accordingly.

Note. The student liability status referenced on the HECS Election page in the Term Activation component is a default value for all enrolments in that program and term. Tuition calculation, payment processing, or HECS reconciliation processing never updates the default value.

FEE-HELP

FEE-HELP is a loan program that provides eligible fee-paying students with help to pay part or all of their tuition fees. The Commonwealth pays the amount of the loan directly to the student's provider. Students repay their loan through the tax system after their income is above the minimum threshold for compulsory repayment. A 20 percent loan fee is applied if a student in an undergraduate course of study accesses FEE-HELP.

OS-HELP

Overseas HELP (OS-HELP) assists eligible undergraduate Commonwealth-supported students to undertake some of their courses of study overseas. OS-HELP is not available to students undertaking all of their courses outside Australia. The loans are allocated to higher education providers (HEPs). The HEPs select the students who receive the loans. Eligible students can borrow up to 5,000.00 AUD per study period for one or two study periods of overseas study.

See Defining OS HELP Loan Defaults.

Preparing for Setting Up HELP

These are some of the general setup steps that you must complete within Student Financials:

• Set up Australian loan data.

• Set up HECS-HELP account types.

• Set up HECS and FEE-HELP item types.

• Set up HECS and FEE-HELP charge priority lists.

• Set up a HECS and a FEE-HELP tuition group.

  You specify the HECS Fee code in a HECS tuition group.

• Set up HECS and FEE-HELP criteria.

These are some of the general setup steps that you must complete outside of Student Financials:

• Set up foundation table reporting codes.

• Set up academic structure defaults.

• Set up DEST reporting codes.

• Set up items in the course catalog.

• Activate and enroll students.

See Also

(AUS) Setting Up Government Reporting

(AUS) Setting Up Government Reporting

(AUS) Generating Government Reports

Setting Up Australian Loan Defaults

This section discusses how to:

• Define liability statuses.

• Define HECS HELP loan defaults.

• Define FEE HELP loan defaults.

• Define OS HELP loan defaults.

• Define status change rule loan defaults.

• Set up HECS fee codes.

• Set up HECS band fees.

• Link band fees to tuition groups.

• Exclude HECS classes.

Pages Used to Set Up Australian Loan Defaults

Defining Liability Statuses

Access the Liability Status page (Set Up SACR, Product Related, Student Financials, Australian Defaults, Liability Status).

The discount and deferral payment processes use these codes. Each liability status can be assigned only one code type. The code types are Deferral, Discount, and Normal.

Defining HECS HELP Loan Defaults

Access the HECS HELP page (Set Up SACR, Product Related, Student Financials, Australian Defaults, Loan Default, HECS-HELP).

Use this page to define the minimum payment amount and the discount percent for your HECS SetID, account type, and item types.

Defining FEE HELP Loan Defaults

Access the FEE HELP page (Set Up SACR, Product Related, Student Financials, Australian Defaults, Loan Default, FEE HELP).

Use this page to define, for each career, the FEE-HELP loan fee percent amount.

Defining OS HELP Loan Defaults

Access the OS HELP page (Set Up SACR, Product Related, Student Financials, Australian Defaults, Loan Default, OS HELP).

Use this page to define the OS-HELP loan fee percent amount. OS-HELP does not appear in a student's account; however, the loan fee percent and the loan amount appear in CAN or DEST reports.

Use the Academic Career field to designate which careers are eligible to receive an OS-HELP loan.

See Also

Creating Commonwealth Assistance Notices

(AUS) Setting Up Government Reporting

Defining Status Change Rule Loan Defaults

Access the Status Change Rule page (Set Up SACR, Product Related, Student Financials, Australian Defaults, Loan Default, Status Change Rule).

Use this page to define the rules that you want to set for changing liability statuses. For example, a student is assigned a liability status of 111 for 2005, and pays his or her fees with a discount of 20 percent. After the tuition calculation and reconciliation is run, you discover that the fees did not meet the 500.00 AUD requirement, so the student's status changes to 110 (deferred).

Liability statuses are delivered values.

See Defining Liability Statuses.

Setting Up HECS Fee Codes

Access the HECS Fee Codes page (Set Up SACR, Product Related, Student Financials, Australian Defaults, HECS Band Fees, HECS Fee Codes).

HECS band fees determine the rate of the charge (Student Contribution amount) for a course taken by a Commonwealth-Supported student. The government provides the maximum Student Contribution amount allowable via funding clusters. Student Financials uses the band ID to calculate the Student Contribution amount.

Note. Configuration of Student Contribution amounts via Band Fee Codes acknowledges the original terminology for the Higher Education Contribution Scheme (HECS). Maximum Student Contribution amounts are outlined in the current legislation and guidelines grouped by Funding Cluster. The combination of Band ID assigned to the course and cohort assigned to the band fee code allow institutions the flexibility to cater for as many student contribution amounts as desired for a single course (DEST Unit of Study).

Setting Up HECS Band Fees

Access the HECS Band Fees page (Set Up SACR, Product Related, Student Financials, Australian Defaults, HECS Band Fees).

These are the definitions of the different HECS bands:

• Band 1: Humanities, Arts, Behavioral Science, Social Studies, Foreign Languages, Visual and Performing Arts.

• Band 2: Accounting, Commerce, Administration, Economics, Mathematics, Statistics, Computing, Built Environment, Health, Engineering, Science, Surveying, Agriculture.

• Band 3: Law, Dentistry, Medicine, Veterinary Science.

• Band 4: National Priorities: Education and Nursing.

• Fixed HECS: Enables you to set up an amount for students who started their courses before 1997.

See Also

(AUS) Setting Up Government Reporting

Linking Band Fees to Tuition Groups

Access the Tuition Groups - Definition page (Set Up SACR, Product Related, Student Financials, Tuition and Fees, Tuition Groups, Definition).

Use the Definition page to add the HECS fee code to the tuition group.

Excluding HECS Classes

Access the Term Fees page (Set Up SACR, Product Related, Student Financials, Tuition and Fees, Term Fees).

You can exclude HECS classes from a term fee.

Reviewing HECS Results and Running the HECS Reconciliation

This section discusses how to:

• Review HECS results.

• Reconcile HECS on the census date.

Pages Used to Review HECS Results and Run the HECS Reconciliation

Reviewing HECS Results

Access the Review HECS Results page (Student Financials, Tuition and Fees, Australian Loan Processing, Process HECS Reconciliation, Review HECS Results).

This page shows the charge and any discount, payment, or deferral amount that is associated with that charge. Click the Display Details link to show the class number and description, the liability status, and the individual charge amounts for that class.

This page displays the class number and description, the liability status, and the individual charge amounts for that class.

Reconciling HECS on the Census Date

Access the HECS Reconciliation page (Student Financials, Tuition and Fees, Australian Loan Processing, Process HECS Reconciliation, HECS Reconciliation).

This page displays the results of HECS reconciliation: the fees charged, payments, deferrals, and discount amounts.

The Reconciliation process reconciles the HECS payments and deferrals as of the census date. If a student has indicated he will pay his full Student Contribution, but as of the census date he has not, this process will change the student's exemption status to deferred or partial payment and remove the full 20 percent discount. The program will then apply any discounts applicable to the partial payment. This process also creates discount and deferral waivers based on the amount of payment as of the census date. You should run this process on the census date, after all of the students' payments are entered in Student Financials.

Parameters

Creating and Updating FEE-HELP Loans

This section provides an overview of FEE-HELP loans and discusses how to:

• Create and update FEE-HELP loans.

• Using FEE-HELP process rules.

• Update statuses for FEE-HELP determinations.

Understanding FEE-HELP Loans

FEE-HELP loans help students who are paying full fees in public and eligible private HEPs. Before you create or update FEE-HELP, the following business processes must be completed:

• CHESSN allocation.

• Student eligibility for FEE-HELP.

See Also

(AUS) Managing CHESSN Data Storage

Pages Used to Create and Update FEE-HELP Loans

Creating and Updating FEE-HELP Loans

Access the FEE HELP Loan page (Student Financials, Tuition and Fees, Australian Loan Processing, Maintain FEE-HELP Loan, FEE-HELP Loan).

Use this page to add the loan and set or change the status (both the liability and the loan status).

Status Information

Use the Status Information tab to add the loan and set the status.

Financial Information

Access the FEE HELP Loan page. Select the Financial Information tab.

The Financial Information tab displays the eligible charges, any payments that have been made, the loan amount, the loan fee amount, the posted flag, and the last update date and time.

Updating Statuses for FEE HELP Determinations

Access the FEE HELP Determination page (Student Financials, Tuition and Fees, Australian Loan Processing, Process FEE-HELP Determination, FEE HELP Determination).

The FEE-HELP Determination process is run before the census date to process and post the FEE-HELP loan to the student's account (and pay the eligible charges). The FEE-HELP Determination process must be run; otherwise, the loan will not appear on the CAN.

Understanding FEE-HELP Process Rules

To determine whether a FEE-HELP deferral will occur and for what amount, it is important to understand the FEE-HELP Entitlement attributes for the student:

• Entitlement check on the Student CHESSN record.

• Balance Override check box on Student Loan Record.

• Entitlement only check box on the process run control.

The combination of these attributes determines how the process assesses the student.

Note. If the student does not have a CHESSN record, no deferral occurs.

Processing Rules Where the Limit is Less Than the Eligible Charge

If a student has eligible charges in excess of the available FEE-HELP balance, application of the FEE-HELP balance is applied first to classes with the earliest census date and then to the most expensive units of study. This is in accordance with the HEIMS order of precedence for entitlement consumption.

Example 1

Assume the student has a FEE-HELP balance available of 1,000 AUD and enrolls in Class A with a census date of 31 March 2007. Tuition fees for Class A are 2,000 AUD.

When the FEE-HELP process is run, it defers Class A in part for $1,000.00. This results in a balance of 1,000 AUD remaining for payment.

The student subsequently enrolls in Class B also with a census date 31 March 2007. Tuition fees for Class B are 2,500 AUD.

When the FEE-HELP process runs, if the student has not made any payments, the deferral of 1,000 AUD swaps to apply to Class B, the more expensive class.

Example 2

Assume the student has a FEE-HELP balance available of 1,000 AUD and enrolls in Class A with a census date 31 March 2007. Tuition fees for Class A are 2,000 AUD.

When the FEE-HELP process runs, it defers class A in part for 1,000 AUD. This results in a balance of 1,000.00 AUD remaining for payment.

The student subsequently enrolls in Class B, which is scheduled in the same term as Class A, but has a census date 15 March 2007. Tuition fees for Class B are also 2,000 AUD.

When the FEE-HELP process runs, if the student has not made any payments, the deferral of 1,000 AUD swaps to Class B, the class with the earliest census date.

Creating and Updating OS-HELP Loans

This section provides an overview of OS-HELP loans and discusses how to maintain OS-HELP loans.

OS-HELP loans help students who decide to take part of their study overseas. Before you create or update OS-HELP, the following business processes must exist:

• The student is not in his or her first or last year of study.

• The student is eligible and has an activated CHESSN.

See Also

(AUS) Managing CHESSN Data Storage

Page Used to Create and Update OS-HELP Loans

Maintaining OS-HELP Loans

Access the Student Loan - OS-HELP page (Student Financials, Tuition and Fees, Australian Loan Processing, Maintain OS HELP Loan, Student Loan - OS HELP).

Use this page to create OS loans. You can start the loan as Pending (until you receive further information), and then change it to Approved (or Denied) according to information that you receive.

Creating Commonwealth Assistance Notices

Create the CAN after the census date to notify students of their liabilities (the loans they have secured, the amounts, and the courses). This notice must be provided to all students who are Commonwealth-supported or Commonwealth-assisted.

This section discusses how to create or update commonwealth assistance notices.

Page Used to Create Commonwealth Assistance Notices

Creating or Updating Commonwealth Assistance Notices

Access the Commonwealth Assistance Notice page (Student Financials, Tuition and Fees, Commonwealth Assistance Notice).

Reprint

Use this check box to toggle printing. Select Reprint to re-create all of the CAN data. Clear Reprint to re-create data only for those students who have made changes since the previous run. For instance, if you ran the CAN process yesterday and then you run it today with Reprint cleared, the CAN process will print only the students whose data changed since the last run.

Group Boxes

You can enter information in any or all of the group boxes to define the group for which you want the CAN printed. If you leave all of the group boxes blank, you will get all students who have HECS-HELP, FEE-HELP, or OS-HELP.