The Tuition Protection Service (TPS) assists VET Student Loans (VSL) students whose education providers are unable to fully deliver their course of study. TPS works with VSL providers to meet their tuition protection obligations and collects levies to support this activity.
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The TPS protects VET Student Loans (VSL) students at private education providers when their provider defaults. A provider defaults when they close, fail to start a course, or stop offering a course to enrolled students.
The TPS helps VSL students to:
- continue their studies with a replacement provider in an equivalent or similar course; or
- if a suitable course is not available, receive a loan re-credit for parts of the course that the student commenced but could not complete due to a provider default.
The TPS is sector funded and supported by the Department of Education. Providers contribute an annual TPS levy according to the size and risk of defaulting. VSL providers are covered by the TPS. There is no need to register for the TPS. While most universities, TAFEs and government owned providers are exempt from the tuition protection requirements, this does not prevent them from enrolling affected students as replacement providers.
VSL providers are automatically covered by the TPS. There is no need to register for the TPS.
The TPS Director is also the VSL Tuition Protection Director under the relevant legislation.
Ongoing provider requirements
The VET Student Loans Act 2016 and VET Student Loans Rules 2016 set out requirements for VSL providers. It is important that providers fulfill their reporting requirements, which include:
- Data reported in the Tertiary Collection of Student Information (TCSI)
- Students’ unique student identifier (USI)
- Records of unit and course completions.
It is also important to maintain the following information in the event of a default:
- Student contact details
- Unit of competency to unit of study mapping.
The VSL Provider Manual guides providers through meeting the VET Student Loans program requirements.
VSL tuition protection levy and fund
All non-exempt VSL providers are required to pay the annual VSL tuition protection levy (VSL levy). The VSL levy funds the student placement and loan re-credit activities of the TPS in the event of a VSL provider default, as well as TPS operational costs.
The VSL levy is paid into the VSL Tuition Protection Fund (the Fund), which is managed by the TPS Director.
The VSL levy is comprised of three components:
- the administrative fee component, set by the relevant Minister
- the risk rated premium component, set by the TPS Director
- the special tuition protection component, set by the TPS Director.
Annual VSL levy settings for each component are determined in legislative instruments made under the VET Student Loans (VSL Tuition Protection Levy) Act 2020.
The formula below demonstrates how an individual VSL provider’s levy is calculated.
The VSL levy was charged for the first time in 2022. The Australian Government waived the 2020 and 2021 VSL levies as a COVID-19 pandemic relief measure for VSL providers.
Administrative fee component
The administrative fee component is intended to contribute to the ongoing administration costs of the VSL tuition protection arrangements.
The annual administrative fee component settings are determined by the relevant Minister. The settings are indexed if the Minister chooses not to determine new amounts in a given year.
Risk rated premium component
The risk rated premium component is comprised of risk factors and settings developed by the Australian Government Actuary (AGA). The TPS Director determines the annual risk rated premium component settings in collaboration with the AGA, the TPS Advisory Board and feedback from stakeholders.
The risk factors comprising the risk rated premium component are intended to reflect the risk of default. They are:
- Financial strength
- Completion rate
- Non-compliance history and registration renewal.
Special tuition protection component
The special tuition protection component contributes to building the balance of the Fund to ensure there are sufficient funds available in the event of a large provider default, or multiple provider defaults. The TPS Director determines the annual special tuition protection component settings in collaboration with the AGA, the TPS Advisory Board and feedback from stakeholders.
2023 VSL levy
The 2023 VSL levy is made up of the following components at these rates:
| Administrative fee component | Risk rated premium component | Special tuition protection component |
|---|---|---|
| $119 per provider + $10.01 per VSL student |
$6.00 per VSL student + 0.17% total 2022 loan amounts |
0.10% x total 2022 loan amounts |
Components of the 2023 VSL levy
The TPS Advisory Board released its final advice to the TPS Director regarding the settings for the risk rated premium component and special tuition protection component of the 2023 VSL levy in June 2023. This advice was offered to the TPS Director in accordance with the advice received from the AGA.
The legislated risk rated premium component and special tuition protection component settings for the 2023 VSL levy are given in the VET Student Loans (VSL Tuition Protection Levy) (Risk Rated Premium and Special Tuition Protection Components) Determination 2023. The administrative fee component settings for the 2023 VSL levy were indexed.
The 2023 Domestic Tuition Protection Levies Fact Sheet contains further information about the VSL levy, its components, the risk factors and how the levy is calculated.
Interaction with education and training sector regulators
The TPS maintains regular contact with the education and training sector regulators to discuss relevant issues, for example education providers at risk of compliance action. The TPS Advisory Board also invites the regulators to its Board meeting on an annual basis to share views on the domestic and international education sectors, which helps inform the risk factor settings of the respective TPS levies each year. As the risk factor calculations for the respective TPS levies are designed to reflect the risk of provider default, they are not equivalent to the risk assessments conducted by the regulators and are calculated using different data.
VSL provider defaults
A default occurs when a provider closes, fails to start, or stops offering a course or unit of study. Please contact the TPS immediately at operations@tps.gov.au if you are at risk of defaulting. The TPS will help guide you through your next steps.
VSL provider default obligations
If a VSL provider defaults, the provider is required to notify the TPS Director of the circumstances of the default within 24 hours.
The provider must also notify students within 24 hours, alerting them to:
- the name of the course or parts of the course affected by the default
- the date of the default
- a link to the Tuition Protection Service.
Within 3 days the provider must supply the TPS Director with additional information.
Please note that if the TPS Director is unable find a suitable replacement course for affected students, students are entitled to a VET Student Loan re-credit. Re-crediting VET Student Loans will result in the defaulting provider having a debt to the Commonwealth.
Helping students in a default situation
Providers are encouraged to be transparent and upfront in their communications with their students, ensuring students are aware of the assistance available to them.
If possible, the TPS encourages providers to keep any online portals live and available for students to access so they can print copies of assignments, assessments, and results, which may assist them in moving to a replacement provider. Providers are also encouraged to update their websites to reflect the default information and to direct students to the TPS.
It is important that records, including student contact details, unit/course status and other data reported in the Tertiary Collection of Student Information (TCSI) are accurate and up to date. This information will help determine a student’s tuition protection eligibility, their continued study with a replacement provider, and loan re‑crediting.
Determining affected parts of a course
In determining the parts of a course affected by a VSL provider default, the TPS will consider the following principles:
- Students affected by a default must not be charged for replacement components of a replacement course if tuition fees have been paid for the affected parts of their original course. [See section 66G(3)(b) of the VSL Act].
- Where a suitable replacement course cannot be found, the student will have their HELP balance re-credited for the loan amount used to pay tuition fees for the affected parts of the original course. [See section 72A of the VSL Act].
In determining what constitutes an affected part of a course, the TPS Director may consider all relevant evidence available to ensure students receive their correct entitlement. Types of evidence that may be considered include:
- AQF certification documentation, such as:
- Testamur: issued once student has achieved all requirements of a VET qualification
- Statement of Attainment: issued to certify the successful completion of one or more units of competency
- Record of Results: may be issued alongside either of the above to record the results achieved by the student in each unit of competency they undertook.
- Authenticated VET transcript issued by the Student Identifiers Registrar
- Data reported by the defaulting provider into TCSI and the Electronic Commonwealth Assistance Form (eCAF)
- Student study information provided by the defaulting provider under subsection 66C(3) of the VET Student Loans Act 2016
- The course mapping of the defaulting provider, i.e., evidence of which units (or parts of units) of competency sit under each unit of study
- Any other evidence considered relevant by the TPS Director.
Replacement providers
The TPS may contact providers with an opportunity to enrol additional students. This will happen when there has been a default and there are students who need to continue their studies.
Becoming a replacement provider
VSL providers are encouraged to act as replacement providers. Providers identified as delivering possible suitable replacement courses will be contacted by the TPS to discuss:
- the willingness and capacity of the provider to act as a replacement provider
- the date affected students would be able to commence in a replacement course
- the incentive payment (if any) that may be available to assist with administrative costs of taking on affected students.
The process of placing students with replacement providers is as follows:
- The TPS will formally advise the students of suitable replacement courses.
- Students will then be instructed to contact their potential replacement provider(s) and discuss whether the replacement course will meet their personal needs.
- Students are then required to inform the TPS of their preferred replacement course.
- The TPS will contact the replacement provider to advise them of the students’ choices.
- Replacement providers will then need to contact the students to facilitate offers and enrolment. If there are any problems at this stage, please contact the TPS at administrator@a.tps.gov.au.
- Replacement providers will then enter into a signed student placement agreement with the student.
Incentives for becoming a replacement provider
Incentive payments may be made to replacement providers. The purpose of these payments is to contribute towards the unavoidable costs associated with accepting additional students.
The TPS may offer incentive payments to facilitate positive outcomes for students who are affected by a default. There is no minimum or maximum incentive payment amount.
The incentive payment becomes payable to the replacement provider after the student's first reported census date, if the following have occurred:
- the student is enrolled
- an agreement is signed by the provider and the student, or their guardian, and provided to the TPS; and
- the student submits an Electronic Commonwealth Assistance Form (eCAF).
Replacement provider obligations
The VSL tuition protection arrangements impose obligations on replacement providers. These obligations are prescribed in the VET Student Loans Act 2016 (VSL Act) and include:
- notifying the TPS Director in writing of a student’s acceptance of an offer of a place in a replacement course within 14 days of the acceptance
- granting course credits for parts of the original course successfully completed by a student as evidenced by:
- a statement of attainment or other AQF certification documentation; or
- an authenticated VET Transcript
- not charging students tuition fees for replacement components of the affected part of the original course for which tuition fees were already paid
- enrolling a student in the replacement course as soon as practicable.