VET Student Loans (External Dispute Resolution Scheme) Specification 2017

Administered by Department of Employment and Workplace Relations

Legislation au F2017L00609 In force Legislative Instrument

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Explanatory Statement

 

VET Student Loans (External Dispute Resolution Scheme) Specification 2017

Summary

The VET Student Loans (External Dispute Resolution Scheme) Specification 2017 specifies the scheme that provides for investigation and resolution of disputes in relation to loans and/or assistance provided under and compliance with the VET Student Loans Act 2016 (VSL Act) and the Higher Education Support Act 2003 (HESA).

Background

The purpose of the VSL Act is to replace the VET FEE-HELP assistance scheme under the HESA from 1 January 2017.  Among other things, the VSL Act enables the Minister to approve by legislative instrument an external dispute resolution scheme providing for the investigation and resolution of disputes relating to loans and/or assistance provided under and compliance with the VSL Act and the HESA.

 

In her second reading speech introducing the VET Student Loans Bill, the Assistant Minister for Vocational Education and Training stated that the Government would establish a VET Student Loans Ombudsman.  The background and policy reasons for the VET Student Loans Ombudsman are set out in the Explanatory Memorandum to the Education and Other Legislation Amendment Bill (No. 1) 2017.  In summary, the Education and Other Legislation Amendment Act (No. 1) 2017, establishes the VET Student Loans Ombudsman and extends the jurisdiction of the Commonwealth Ombudsman to matters related to the VSL Act and the HESA. 

 

This instrument specifies the VET Student Loans Ombudsman as the external dispute resolution scheme pursuant to section 42A of the VSL Act and specifies the Commonwealth Ombudsman as the operator of that scheme.

Consultation

The Regulatory Impact Statement (RIS) for the VET Student Loans Bill 2016, entitled VET FEE-HELP Redesign, provides that extensive consultations were undertaken to engage stakeholders through the development of the VET FEE-HELP redesign.  In particular, the RIS notes there was strong support for a student support mechanism, either through an ombudsman, the Australian Skills Quality Authority or department complaints handling function.

Regulatory Impact Statement

The external dispute resolution scheme specification gives effect to policies and proposals examined in the RIS for the VET Student Loans Bill 2016.

Authority

The VET Student Loans (External Dispute Resolution Scheme) Specification 2017 is made under section 42A of the VSL Act.

Explanation of Provisions

Section 1 sets out that the name of the instrument is the VET Student loans (External Dispute Resolution Scheme) Specification 2017.

Section 2 provides that the instrument commences on 1 July 2017.

Section 3 sets out that the authority for the instrument comes from the VET Student Loans Act 2016.

 

Section 4 specifies the VET Student Loans Ombudsman as the scheme for investigation and resolution of disputes relating to:

  • VET Student Loans as provided under the VSL Act
  • compliance by approved course providers with the VSL Act
  • VET FEE-HELP assistance under the HESA
  • compliance by VET providers under the HESA.

 

Section 5 specifies that the person who holds the office of the Commonwealth Ombudsman is the operator of the VET Student loans Ombudsman scheme.

 


Statement of Compatibility with Human Rights

 

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

 

VET Student Loans (External Dispute Resolution Scheme) Specification 2017

 

This legislative 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 VET Student Loans (External Dispute Resolution Scheme) Specification 2017 specifies the VET Student Loans Ombudsman as the scheme that provides for investigation and resolution of disputes in relation to:

  • VET Student Loans under the VET Student Loans Act 2016 (VSL Act),
  • compliance by approved course providers with the VSL Act
  • VET FEE-HELP assistance Higher Education Support Act 2003(HESA)
  • compliance by VET providers under the HESA.

 

The instrument also specifies the Commonwealth Ombudsman as the operator of the scheme.

 

The full policy context and background for the VET Student Loans Ombudsman is set out in the Education and Other Legislation Amendment Act (No. 1) 2017 (EOLA Act).

Human Rights Implications

The instrument engages the right to a fair and public hearing as set out in article 14 of the International Covenant on Civil and Political Rights (ICCPR).  Article 14 ensures ‘everyone shall be entitled to a fair and public hearing by a competent, independent and impartial tribunal established by law’ and subject to exceptions requires judgments to be publicly available.

 

By establishing an independent external mechanism to hear disputes relating to the VSL Act and the HESA, this instrument promotes the rights set out in article 14.

 

The human rights implications of the establishment of the VET Student Loans Ombudsman are discussed in the explanatory statement to the EOLA Act.  In summary, the explanatory statement to the EOLA Act states that the following rights are engaged in the establishment of the VET Student Loans Ombudsman and notes that any limitations on these rights are reasonable and proportionate:

  • right to privacy – article 17 ICCPR
  • right to a fair and public hearing – article 14(1) ICCPR
  • right to be presumed innocent – article 14(2) ICCPR.

Conclusion

This instrument is compatible with human rights as it promotes the right to a fair and public hearing set out in article 14 of the ICCPR by establishing a mechanism for dealing with disputes about loans or assistance provided under or compliance with the VSL Act and the HESA. 

 

Simon Birmingham

Minister for Education and Training

Overview

The VET Student Loans (External Dispute Resolution Scheme) Specification 2017 was enacted to establish a formal dispute resolution mechanism for students who have taken out loans under the VET Student Loans Act 2016 and the Higher Education Support Act 2003. This legislative instrument was introduced by the Parliament of Australia to address the need for an independent body to investigate and resolve disputes related to the administration of these loans and the compliance of approved course providers with the relevant legislation. The VET Student Loans Ombudsman, operating under the Commonwealth Ombudsman, was established to provide a fair and independent process for resolving these disputes, ensuring that students have access to a mechanism for addressing grievances related to their loans and the services provided under these Acts. The enactment of this scheme reflects the policy objective of creating a transparent and accessible system for managing disputes, thereby enhancing the accountability and responsiveness of the loan administration process. This initiative was introduced to support the broader educational reforms aimed at improving the vocational education and training sector in Australia.

Scope and Application

The VET Student Loans (External Dispute Resolution Scheme) Specification 2017 specifies the VET Student Loans Ombudsman as the scheme that provides for the investigation and resolution of disputes in relation to loans and/or assistance provided under and compliance with the VET Student Loans Act 2016 and the Higher Education Support Act 2003. The scheme applies to all VET FEE-HELP assistance and VET Student Loans, including any compliance issues with approved course providers and VET providers under these acts. The Commonwealth Ombudsman is designated as the operator of the VET Student Loans Ombudsman scheme, ensuring an independent and impartial process for dispute resolution. The scope of the scheme is national, applying across all states and territories in Australia, and is effective from 1 July 2017. There are no specific exclusions or thresholds outlined in this specification, although it is understood that the scheme will operate within the broader legislative framework provided by the VSL Act and HESA. The scheme is compatible with human rights, particularly engaging the right to a fair and public hearing as set out in the International Covenant on Civil and Political Rights.

Key Provisions

The VET Student Loans (External Dispute Resolution Scheme) Specification 2017 (the "Specification") specifies the VET Student Loans Ombudsman as the scheme responsible for investigating and resolving disputes related to VET Student Loans under the VET Student Loans Act 2016 (VSL Act), compliance by approved course providers with the VSL Act, VET FEE-HELP assistance under the Higher Education Support Act 2003 (HESA), and compliance by VET providers under the HESA (section 4). This instrument also specifies the Commonwealth Ombudsman as the operator of the scheme (section 5). The Specification is made under section 42A of the VSL Act and commenced on 1 July 2017 (sections 1, 2, and 3). The VET Student Loans Ombudsman has obligations and requirements to ensure that it provides an effective and efficient external dispute resolution scheme. It must be independent, impartial, and established by law, as required under Article 14 of the International Covenant on Civil and Political Rights (ICCPR). The Ombudsman must also ensure that all hearings are fair and public, and that judgments are publicly available. The Commonwealth Ombudsman, as the operator of the scheme, must ensure that the Ombudsman has the necessary resources and support to carry out its functions effectively. There are no specific offences, penalties, or civil/criminal consequences mentioned in the Specification for breach of its provisions. However, failure to comply with the VSL Act or the HESA may result in penalties under those Acts. For example, under the VSL Act, an approved course provider who fails to comply with the Act may be subject to a financial penalty of up to $11,000 (section 38). Similarly, under the HESA, a VET provider who fails to comply with the Act may be subject to a financial penalty of up to $22,000 (section 129). Additionally, the Ombudsman has the power to make orders or recommendations to resolve disputes, which may have legal consequences for the parties involved. In summary, the VET Student Loans (External Dispute Resolution Scheme) Specification 2017 specifies the VET Student Loans Ombudsman as the scheme for investigating and resolving disputes related to VET Student Loans, compliance with the VSL Act, VET FEE-HELP assistance, and compliance with the HESA. The Specification also specifies the Commonwealth Ombudsman as the operator of the scheme. The Specification imposes obligations and requirements on the Ombudsman and the Commonwealth Ombudsman to ensure that the scheme is effective and efficient. While there are no specific offences, penalties, or civil/criminal consequences mentioned in the Specification for breach of its provisions, failure to comply with the VSL Act or the HESA may result in penalties under those Acts.

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Alternative Dispute Resolution
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Legislative Instrument
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Definitions & Interpretation
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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.