Welcome to the VET Student Loans Guide 5.4 - July 2023. This guide is tailored for finance professionals, including accountants, CFOs, and directors in corporations and educational institutions. It also provides essential information for ambitious students navigating the VET student loan landscape.
On this page:
VET Student Loans (VSL)
Program FAQs
Who can offer VET Student Loans (VSL)?
What is an eligible student?
What courses can a student apply for a VET Student Loan for?
What is a unit of study?
What is a census day?
What is a course loan cap?
What are ‘covered fees’?
What is a tuition fee?
What is a gap fee?
What are fee periods?
What is the provider fee limit?
What is the HELP loan limit?
What is the HELP balance?
What is a genuine student?
When do providers get paid?
What is the VSL tuition protection levy?
Course provider requirements
Financial performance
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I. VET Student Loans (VSL)
VSL is an income contingent loan program to assist eligible vocational education and training (VET) students to pay their tuition fees for selected courses at the Diploma level and above. The program is designed to provide financial loan support to students undertaking higher level training in courses that address workplace and industry needs, creating better opportunities for employment. The VSL program is governed by the VET Student Loans Act 2016 (the Act) and the VET Student Loans Rules 2016. The VET Student Loans (Charges) Act 2016 allows for the imposition of an annual approved course provider charge on providers. The VSL program has been designed to give VET sector students and providers the opportunity to meet industry needs and employment outcomes while ensuring only high-quality providers deliver training under the program.
II. Program FAQs
1. Who can offer VET Student Loans (VSL)?
Only registered training organisations that have been approved by the Secretary of the Department of Employment and Workplace Relations can offer VSL to eligible students.
2. What is an eligible student?
This is a student who meets all the eligibility requirements under Part 2 Division 2 of the Act.
3. What courses can a student apply for a VET Student Loan for?
Eligible students may only access a VET Student Loan for an approved course at an approved course provider that has been approved to offer that approved course.
4. What is a unit of study?
The components of training (subjects or competencies) needed to be undertaken by students as part of the course or qualification. Students incur the liability to pay tuition fees at the unit level. Preferably, a unit of study is equal to a unit of competency (or module in an accredited course). However, a unit of study may comprise a group of units of competency. Many rules apply in respect of units of study, such as Determining census days, publishing fees, issuing notices, Data reporting, fees and completions, and withdrawal and penalty provisions. Providers will determine, publish, charge and report tuition fees at the unit of study level. Census days (TCSI Element 489) are set for each unit, and providers will report enrolments and completions at the unit level. For reporting in TCSI, where units of study are equal to units of competency, unit codes (Element 354) will match the Subject Identifier used in the AVETMISS Standard.
5. What is a census day?
The day the student incurs financial liability for the unit of study. Students may cancel their enrolment on or before the census day without incurring tuition fees (or a HELP or VSL debt) for the course or the part of the course.
6. What is a course loan cap?
This is the total amount of loan an eligible student may access for a particular course.
7. What are ‘covered fees’?
The amount of the course tuition fees to be covered by a VSL. This will be set out on the student’s VSL Statement of Covered Fees.
8. What is a tuition fee?
The total fees to be charged to the student for the course (including the covered fees plus any gap fee). Tuition fees can include the cost of assessing academic suitability for the course, enrolment in and tuition and examination for the course and the award of a qualification for completion of the course. Additional fees for certain goods or services cannot be included.
9.What is a gap fee?
The difference between the covered fees and the total tuition fee for a course.
10. What are fee periods?
The tuition fees for the course must be reasonably and proportionately distributed across at least 3 sequential fee periods. Each fee period must contain at least one census day. Therefore, there will be at least 3 census days/3 units over the course.
11. What is the provider fee limit? The maximum dollar amount for VSL that can be paid to an approved course provider for a particular period and/or for approved course(s).
12. What is the HELP loan limit? The maximum amount a person can borrow over their lifetime for VSL, VET FEE-HELP, FEE-HELP, and HECS-HELP. (Note, only HECS-HELP incurred from 1 January 2020 counts towards the HELP loan limit). The HELP loan limit is indexed annually on 1 January.
13. What is the HELP balance? A person’s HELP limit minus any VSL, VET FEE-HELP, FEE-HELP and HECS-HELP loans they have used.
14. What is a genuine student? Whether or not a student is a ‘genuine student’ is determined in accordance with factors set out at section 5 of the Rules. This is relevant, as the Secretary does not need to pay a loan amount for a student who is not genuine. Genuine student factors include considering whether students have demonstrated they are reasonably engaged in the course and have completed the student progression requirements.
15. When do providers get paid? Providers will ordinarily be paid monthly in arrears of reported census days for genuine students.
16.What is the VSL tuition protection levy? The VSL tuition protection levy is a risk-based annual levy, payable by leviable providers, to fund tuition protection arrangements for the VSL program.
III. Course provider requirements
To become an approved course provider, the course provider must:
meet the course provider requirements [Act s 47(2)];
comply with any conditions imposed on your approval [Act s 47(1)];
meet the provider suitability requirements [Act s 47(2)];
be financially viable and be able to pay your debts as, and when, they are due and payable [Rules s 23];
have robust and appropriate management and governance structures;
have experience in providing VET as an RTO;
have adequate completion rates for each of your courses that lead to a diploma, advanced diploma, graduate certificate or graduate diploma [Rules s 33]; and
must demonstrate the provider and key persons are ‘fit and proper persons’ to ensure they meet coefficient standards of integrity, honesty and good character.
IV. Financial performance
In accordance with above requirements, the provider must be financially viable and be able to pay your debts as, and when, they are due and payable.
During the approval process, the provider must submit sufficient information to assist the Secretary in assessing the level of risk associated with your financial viability. This information should include audited financial statements.
Subsequently, the provider must provide, annually, accurate financial statements prepared by an independent qualified auditor.
A qualified auditor means:
(a) the Auditor-General of a state or territory or
(b) a registered company auditor (within the meaning of section 9 of the Corporations Act 2001) or
(c) a person approved by the Secretary in writing.
The word ’independent’ in this case is given its ordinary meaning that is a registered company auditor who is independent of the company being audited.
Note: These financial performance details are to be provided to the department via the HITS system and need to be accompanied by required information (Copies of notices given to other regulators 4.4.4).
Indicators of financial viability are:
the provider generated sufficient income to meet operating payments and debt commitments and allow growth
the provider maintains a positive equity position and there is no evidence to suggest this might change
if the provider has been operating for 3 or more years and is not a charitable or not-for-profit organisation registered with the Australian Charities and Not-for-profits Commission – it must have operated at a profit for at least 2 of the 3 most recent financial years
if the provider had at least 100 enrolments in courses leading to awards of qualifications in the Australian Qualifications Framework – at least 20% of its total revenue for that previous financial year came from sources other than payments of Commonwealth assistance that gave rise to HELP debts or VETSL debts
the provider has a net positive operating cash position from operating activities determined in accordance with accounting standards
the provider is not providing guarantees, or loans, that could have a material effect on the provider’s finances
the provider is not offering its assets as security other than under a commercial loan arrangement with an ADI.
Dividends and related party transactions
The provider’s dividend distributions during a financial year must not exceed their after-tax profit for the previous financial year.
Payments to key personnel and related parties for the provision of goods or services during a financial year must only be for goods and services which are reasonably necessary for the operations and on terms that comply with the accounting standards, including in relation to arm’s length transactions.
Insurance
The provider must have workers’ compensation insurance as required by law and adequate public liability insurance. These insurance requirements are necessary to ensure that the provider has adequate financial resources to respond to and handle claims relating to workers’ compensation and public liability. If the total liability incurred by the provider under such a claim exceeds the amount for which the provider is insured, then the provider will be liable to pay the balance of the liability out of own resources.
If the provider has in place workers’ compensation insurance as required by the laws of each state and territory in which the provider has workers, the provider meets the workers’ compensation insurance requirement.
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