Student Assistance (Loans Guarantee and Subsidy) Act 1982

Overview

The Student Assistance (Loans Guarantee and Subsidy) Act 1982 was enacted to provide financial support to eligible students by ensuring the availability of loans through the Commonwealth's guarantee and subsidy mechanisms. The Act was passed by the Parliament of Australia and received Royal Assent on 31 December 1982. It was designed to address the gap in financial assistance for students pursuing higher education by facilitating access to loans through authorised banks. The policy objective of the Act is to assist eligible students in meeting their educational and maintenance expenses, thereby enabling broader participation in tertiary education. The Act allows the Treasurer to provide guarantees to approved banks for loans made to eligible students, subject to certain limits and conditions, while also enabling the Minister to subsidise the interest on these loans to reduce the financial burden on students.

Scope and Application

The Student Assistance (Loans Guarantee and Subsidy) Act 1982 applies to loans made by approved banks to eligible students for the purpose of contributing to the maintenance and educational expenses of the student and to the maintenance of any dependants of the student. It provides for the Commonwealth to give guarantees for approved loans, which must be made under prescribed terms and conditions. The Act defines "approved bank" to include trading banks as defined in the Banking Act 1959, banks established by a State Act, or any other bank approved in writing by the Treasurer. An "eligible student" is someone who is an Australian citizen or a permanent resident of Australia, enrolled in an approved course of study, and has been granted certain types of assistance or has passed a prescribed means test. The Act extends to the Commonwealth of Australia and may be extended by subordinate instruments such as regulations. There are no stated exclusions or exemptions, though there are thresholds on the amount of the principal moneys guaranteed and the amount of the loans. The Act allows the Treasurer to give a guarantee for the repayment of the principal moneys and the payment of interest on approved loans, up to an aggregate limit of $50,000,000 or a greater amount prescribed for the relevant year. The validity of the guarantee cannot be questioned on the grounds that it was not given in accordance with the Act. If the Commonwealth makes a payment under a guarantee, the borrower is liable to repay the amount of the payment plus interest, which may be recovered as a debt due to the Commonwealth. The Minister is required to pay an amount of money ascertained in accordance with the regulations as subsidy of the interest payable on approved loans, which is to be applied by the bank towards the discharge of the students' liability to pay interest on those loans. The Treasurer or the Minister may delegate their powers under the Act to another person, and the Minister is required to lay an annual report on the operation of the Act before each House of the Parliament.

Key Provisions

The Student Assistance (Loans Guarantee and Subsidy) Act 1982 (hereafter referred to as the Act) is an Australian legislative instrument designed to facilitate the provision of financial assistance to students through the guarantee and subsidy of loans. The Act allows the Treasurer to provide guarantees to approved banks for approved loans made to eligible students (sections 4 and 5). These loans must be made on prescribed terms and conditions and must contribute to the student's maintenance and educational expenses. The Act also mandates that the Minister pay subsidies to approved banks for the interest payable on approved loans made to eligible students (section 8). These subsidies are to be applied towards the discharge of the students' liability to pay interest on these loans. The Act imposes several obligations on the parties involved. For the Treasurer, the Act requires the provision of guarantees to approved banks for approved loans made to eligible students, subject to certain conditions (section 4). The Treasurer must ensure that the total principal amount of loans guaranteed does not exceed prescribed limits (section 4(2)). For the Minister, the Act requires the payment of subsidies to approved banks for the interest on approved loans (section 8). The Minister must also ensure that these subsidies are applied correctly towards the students' interest liabilities. Approved banks, on the other hand, must comply with the terms and conditions set forth in the Act for the loans they make to students (section 4). These include adhering to the prescribed terms and conditions, ensuring that the students are eligible, and correctly applying any subsidies received. The Act also outlines various consequences for breaches of its provisions. Firstly, any guarantee issued under the Act is legally binding and cannot be contested in court on the grounds that it was not issued in accordance with the Act (section 6). Secondly, if the Commonwealth makes a payment under a guarantee, the borrower is liable to repay the guaranteed amount plus interest, which can be recovered as a debt through legal action (section 7). Additionally, the Act does not specify particular criminal or civil penalties for breaches but implies that legal recourse is available for non-compliance with its provisions. The Act requires the Minister to report annually on its operation (section 10), which serves as a mechanism for oversight and accountability.