EXPLANATORY STATEMENT

Issued by the authority of the Minister for Education

Higher Education Support Act 2003

Higher Education Support (Other Grants) Amendment (Needs-Based Funding Program) Guidelines 2025

AUTHORITY

Section 238-10 of the Higher Education Support Act 2003 (the Act) provides that the Minister may make Other Grants Guidelines to, amongst other things, provide for matters necessary or convenient to be provided in order to carry out or give effect to Part 2-3 of the Act in relation to grants payable under that Part.

Under subsection 33(3) of the Acts Interpretation Act 1901, where an Act confers a power to make, grant or issue any instrument of a legislative or administrative character (including rules, regulations, or by‑laws), the power shall be construed as including a power exercisable in the like manner and subject to the like conditions (if any) to repeal, rescind, revoke, amend, or vary any such instrument. The amendments to the Higher Education Support (Other Grants) Guidelines 2022 (the Principal Instrument) made by the Higher Education Support (Other Grants) Amendment (Needs-Based Funding Program) Guidelines 2025 (the Amendment Instrument) rely on this provision.

PURPOSE AND OPERATION

The Amendment Instrument amends the Principal Instrument to specify a new program under which grants can be made, being the Needs-Based Funding (NBF) program, which will provide grants to assist higher education providers to improve the extent to which persons from a low socioeconomic background and Indigenous persons participate, remain and succeed in higher education and obtain higher education awards, and assist providers to offset higher operating costs of campuses in regional and remote areas.

The Amendment Instrument also specifies the bodies eligible to receive a grant under this program, how the grants are to be made, and the conditions that apply to the grants.

The amendments made by the Amendment Instrument have been made in response to the recommendations made by the Australian Universities Accord (the Accord). The Accord led a 12-month review of Australia’s higher education system, led by a Panel of eminent Australians, and recommended the introduction of NBF in recognition that people from groups under-represented in higher education on average require greater support to succeed, often due to experiencing educational disadvantage.

The NBF program provides additional funding for the purpose of supporting equity cohorts and regional delivery in Australian higher education. Supporting equity groups through tailored programs designed to support students for the duration of their study will be vital to achieving the Government’s target that 80% of the working-age population will hold at least one tertiary qualification. This target is linked to projections that 9 out of 10 new jobs will require post-school qualifications and is a driver of productivity, prosperity, and fairness for all Australians. The supports required will differ from group to group, and from student to student and should seek to address individual, institutional, geographic, and material barriers.

Regional providers will also benefit from additional funding to make it more financially viable to operate regional campuses and deliver high quality higher education.

COMMENCEMENT

The Amendment Instrument commences on the day after this instrument is registered on the Federal Register of Legislation.

CONSULTATION

The NBF program is part of a broader reform in response to the recommendations of the Accord Final Report, following extensive consultation and engagement with students, staff, institutions, community groups, subject matter experts, and across government. 

The Department of Education (department) prepared a Needs-Based Funding implementation consultation paper (the consultation paper) that was open for feedback between July and August 2024. The consultation paper sought input on key elements, eligibility, contribution amounts, academic preparedness, definitions, eligible activities, transparency, accountability and data considerations. A total of 75 Submission were received from organisations including universities, peak bodies and individuals that informed the development of the program as reflected in the Amendment Instrument.

The department undertook further targeted consultation specifically on the NBF program between June and October 2025 with a range of stakeholders. The main feedback following consultation involved stakeholders seeking further clarification about definitions and eligibility, which has been detailed in the Amendment Instrument.

The department has provided a detailed fact sheet and released a funding calculator to eligible providers which gives an estimate of total grant funding to be provided under NBF for 2026, based on enrolment data provided to the department.

The stakeholders consulted in relation to the NBF program were largely supportive of the program.

STATEMENT OF COMPATIBILITY WITH HUMAN RIGHTS

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Higher Education Support (Other Grants) Amendment (Needs-Based Funding Program) Guidelines 2025

The Higher Education Support (Other Grants) Amendment (Needs-Based Funding Program) Guidelines 2025 (the Amendment Instrument) is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview of the Legislative Instrument

The Amendment Instrument amends the Higher Education Support (Other Grants) Guidelines 2022 (the Principal Instrument) to specify a new program under which grants can be made, being the Needs-Based Funding (NBF) program, which will provide grants to assist higher education providers to improve the extent to which persons from a low socioeconomic background and Indigenous persons participate, remain and succeed in higher education and obtain higher education awards, and assist providers to offset higher operating costs of campuses in regional and remote areas.

The Amendment Instrument also specifies the bodies eligible to receive a grant under this program, how the grants are to be made, and the conditions that apply to the grants.

The amendments made by the Amendment Instrument have been made in response to the recommendations made by the Australian Universities Accord (the Accord). The Accord led a 12-month review of Australia’s higher education system, led by a Panel of eminent Australians, and recommended the introduction of NBF in recognition that people from groups under-represented in higher education on average require greater support to succeed, often due to experiencing educational disadvantage.

The NBF program provides additional funding for the purpose of supporting equity cohorts and regional delivery in Australian higher education. Supporting equity groups through tailored programs designed to support students for the duration of their study will be vital to achieving the Government’s target that 80% of the working-age population will hold at least one tertiary qualification. This target is linked to projections that 9 out of 10 new jobs will require post-school qualifications and is a driver of productivity, prosperity, and fairness for all Australians. The supports required will differ from group to group, and from student to student and should seek to address individual, institutional, geographic, and material barriers.

Regional providers will also benefit from additional funding to make it more financially viable to operate regional campuses and deliver high quality higher education.

Human rights implications

The Amendment Instrument engages the right to education in Article 13 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

Right to education

Article 13 of the ICESCR recognises the important personal, societal, economic and intellectual benefits of education. Article 13 also provides that secondary education in all its different forms, including higher education, shall be made generally available and accessible to all by every appropriate means. Article 13(2)(c) of the ICESCR provides that ‘higher education shall be made equally accessible to all, on the basis of capacity, by every appropriate means, and in particular by the progressive introduction of free education’.

The Amendment Instrument amends the Principal Instrument to establish the NBF program. This new program will enable the provision of grants to higher education providers to assist those providers with improving the participation of people from a low socioeconomic background and Indigenous persons in higher education and will offset the higher costs of maintaining campuses in regional and remote areas. This program will support students from low socioeconomic backgrounds, Indigenous persons and people from remote and regional areas to participate and complete their higher education.

As such, the Amendment Instrument supports the right to education as it is aimed at reducing the barriers that students face in participating and completing their higher education.

Conclusion

The Amendment Instrument is compatible with human rights because it supports the right to education.

Minister for Education, the Hon Jason Clare MP

HIGHER EDUCATION SUPPORT (OTHER GRANTS) AMENDMENT (NEEDS-BASED FUNDING PROGRAM) GUIDELINES 2025

EXPLANATION OF PROVISIONS

Section 1: Name

1.   This section specifies the name of the instrument as the Higher Education Support (Other Grants) Amendment (Needs-Based Funding Program) Guidelines 2025 (the Amendment Instrument).

Section 2: Commencement

1.   This section provides that the Amendment Instrument commences on the day after the Amendment Instrument is registered on the Federal Register of Legislation.

Section 3: Authority

1.   This section provides that the Amendment Instrument is made under section 238-10 of the Higher Education Support Act 2003 (the Act).

Section 4: Schedules

1.   This is a technical provision that explains that each instrument that is specified in a Schedule to the Amendment Instrument is amended or repealed as set out in the applicable items in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

Schedule 1 – Amendments

Higher Education Support (Other Grants) Guidelines 2022

Item 1: Section 4 (definition of low socioeconomic background)

1.       This item repeals and replaces the definition of ‘low socioeconomic background’ to mean:
   •         in relation to Part 4A of the instrument – a person whose residential address is in the lowest quartile at the time the person enrols in their higher education course, by Statistical Area 1, as referred to in the document published by the Australian Statistician as Socio-Economic Indexes for Areas (SEIFA) (as that document was in force at the time the Amendment Instrument was made);
   •         in relation to every other reference in the instrument – a person whose residential address is in the lowest quartile, by Statistical Area 1, as referred to in the document published by the Australian Statistician as Socio-Economic Indexes for Areas (SEIFA) (as that document was in force at the time the Principal Instrument was made);
2.       This item repeals the current definition of ‘low socioeconomic background’ in the Principal Instrument to provide that the term has a slightly different meaning in relation to Part 4A (as inserted by item 2), but makes no change to the definition in relation to every other reference in the instrument.
3.       The item also inserts new notes at the end of the definition that provides further information as to where the SEIFA as in force at the time the Amendment Instrument was made and as in force at the time the Principal Instrument was made, can be found.

Item 2: After section 52

1.       This item inserts new Part 4A after existing section 52 in the Principal Instrument.
2.       New Part 4A specifies the Needs-Based Funding program as a program under which grants may be made in accordance with subsection 41-15(1) of the Act.

Section 52A

1.       This section outlines the program objectives for the Needs-Based Funding program.
2.       Subsection 52A(1) provides that the Needs-Based Funding program is specified as a program for the purpose of promoting equality of opportunity in higher education, under item 1 of the table in subsection 41-10(1) of the Act.
3.       Subsection 52A(2) provides that the Needs-Based Funding program is to provide grants to assist higher education providers to promote equality of opportunity in higher education provider by:
   •         improving the extent to which persons from a low socioeconomic background and Indigenous persons participate, remain and succeed in higher education, and obtain higher education awards; and
   •         assisting providers to offset higher operating costs of campuses in inner regional, regional, outer regional, remote and very remote areas and the Northern Territory, in comparison to campuses in metropolitan areas.

Section 52B

1.       This section specifies the higher education provides that are not Table A providers are specified for the purposes of item 1 of the table in subsection 41-10(1) of the Act as bodies corporate eligible to receive grants under the Needs-Based Funding program.
2.   The note to the section clarifies that Table A providers are already eligible for grants made for the purpose of item 1 of the table in subsection 41-10(1), and do not need to be specified in this section.

Section 52C

1.   This section sets out the extra conditions of eligibility that a higher education provider must meet in order to be eligible for grants under the program.
2.   Subsection 52C(1) provides that a higher education provider is only eligible for a grant under the program if it is eligible to receive grants under Part 2-2 of the Act for 2026.
3.   Subsection 52C(2) provides that a higher education provider is only eligible for grants under the program for 2026 if, using the most recent Commonwealth supported student load data for 2024 as verified by the provider through the HESDC, and as accepted by the Department, the provider enrolled at least one of the following types of students:
   •         students from low socioeconomic backgrounds;
   •         Indigenous persons; and
   •         students enrolled at campuses located in regional and remote areas of Australia.

Section 52D

1.   This section provides that grants made to a higher education provider for the program are made in respect of a year and are made for the purposes of either improving the extent to which persons from a low socioeconomic background and Indigenous persons participate, remain and succeed in higher education, and obtain higher education awards (Equity Grant), or assisting providers to offset higher operating costs of campuses in inner regional, regional, outer regional, remote and very remote areas and the Northern Territory, in comparison to campuses in metropolitan areas (Regional Grant).
2.   The note to the section clarifies that grant amounts for the program will be determined by the Minister in writing under paragraph 41-30(b) of the Act.
3.   The Minister will determine grant amounts with consideration given to: the relative disadvantage and completion rates of particular cohorts compared to the general student population; levels of academic preparedness; the study mode; the level of study; and the additional costs of regional and remote delivery. 

Section 52E

1.   This section sets out the conditions that apply to grants made under the program.
2.   Subsections 52E(1) to (6) specify the conditions that apply to Equity Grants under the program.
3.   Subsection 52E(1) provides that a higher education provider under the program in receipt of the Equity Grant, must use the Equity Grant to achieve the program objectives as set out in paragraph 52A(2)(a).
4.   Subsection 52E(2) provides that the Equity Grant must be spent on activities that support students from low socioeconomic backgrounds and Indigenous persons to access, participate in, succeed in, and complete higher education, and address the specific disadvantages or barriers faced by the provider’s students from low socioeconomic backgrounds and Indigenous persons in accessing, participating in, succeeding in, and completing higher education.
5.   The note to subsection 52E(2) provides that, for the avoidance of doubt, the Equity Grant could be used to fund direct support to individuals or groups of eligible students, or indirect supports that benefit a wide cohort of students as long as they are delivered for the primary purpose of supporting eligible students.
6.   Subsection 52G(3) provides that, notwithstanding subsection (2), a higher education provider may use the Equity Grant on activities targeted at those who are not yet enrolled in higher education, to build higher education aspiration and promote higher education to people from low socioeconomic backgrounds and Indigenous people, if the provider meets all of the following requirements:
   •         the provider received a grant for the 2025 grant year under the Higher Education Participation and Partnerships Program specified in Division 1 of Part 2 of the Principal Instrument;
   •         the provider will receive a grant for the 2026 grant year under the Outreach Funding Program specified in Part 9B of the Principal Instrument;
   •         the provider’s grant amount for the Outreach Funding Program for the 2026 grant year is less than the provider’s grant amount for the Higher Education Participation and Partnerships Program in the 2025 grant year; and
   •         the activities are not already funded using grant amounts received by the grant recipient under Part 2-3 of the Act.
7.   Subsection 52G(4) provides that, a higher education provider who is permitted to use the Equity Grant on the activities in subsection (3), must not spend more of the Equity Grant than the difference between the amounts listed in paragraphs 52G(3)(a) and (3)(b) on those activities.
8.   Subsection 52G(5) provides that the Equity Grant must not be spent on any activities related to infrastructure, including maintenance and constructing of buildings, fixtures, roads and pathways, and any activities related to services or transport vehicles, that are not principally for the use or benefit of students from low socioeconomic backgrounds or Indigenous persons.
9.   Subsection 52G(6) imposes requirements on reports that the provider must provide to the Minister in relation to the Equity Grant.
10.   Subsections 52E(7) and (8) specify the conditions that apply to Regional Grants under the program.
11.   Subsection 52G(7) provides that the Regional Grant must be used to offset the higher costs associated with operating regional campuses and support high-quality, accessible higher education in regional and remote Australia.
12.   Subsection 52G(8) imposes requirements on reports that the provider must provide to the Minister in relation to the Regional Grant.