Understanding Loan Processing for Australian Higher Education
The Higher Education Loan Program (HELP) is a suite of income contingent loans: HECS-HELP, FEE-HELP, OS-HELP, and SA-HELP.
This section discusses:
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 DIISRTE (Department of Industry, Innovation, Science, Research and Tertiary Education) reporting.
Supply DIISRTE with a file of data on HECS liabilities for all students.
Do this through DIISRTE reporting.
Supply DIISRTE 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 DIISRTE reporting.
See Understanding Australian Government 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 enrollment 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.
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 Enrollment 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 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.
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.
As of academic year 2012, government legislation allows higher education institutions to charge students a fee for amenities. The fee has a capped annual amount, half of which is usually charged at the start of each semester. The Due Date is the date in the semester on which the government and institution consider that a student owes the fee—this date usually coincides with the census date. Part time students with less than 75 percent of a standard full time load are charged a smaller fee amount than full time students.
Student Amenities HELP (SA-HELP) allows students to defer payment of their Student Amenities fee.
See:
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.
Set up SA Fee accounts types (with account per term).
Set up SA Fee and SA-HELP item types and item type groups.
Set up tree manager with SA Fee item types.
Set up SA Fee session based term fees.
Add SA Fee term fee to tuition groups.
Set up charge priority list.
Set up payment overall priority by charge tree node.
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 DIISRTE reporting codes.
Set up items in the course catalog.
Activate and enroll students.