While the deliverables provide measures of access, they do not reflect sustainability, which is a priority within the education sector. Table 1.2 summarises the key aspects of these income-contingent loan programs. The MQ platform is expected to be operational from 1 July 2017. 4.47 The ATO is committed to working with Education to develop a co-ordinated risk-based compliance strategy that will assist in identifying and dealing with risks associated with each department’s administration responsibilities. The agencies provide a range of information to support voluntary compliance with HELP obligations, including through a draft communication strategy. For 2014–15, the ATO properly applied the HELP indexation factor and compulsory repayment thresholds in updating the Integrated Core Processing system. 4.10 The Memorandum of Understanding between Education and the ATO states that the Management Committee’s53 role includes managing risks and formulating strategies to minimise risks. The Australian Government provides income-contingent loans to eligible students through the Higher Education Loan Program (HELP), which removes up-front cost barriers to tertiary education and training. Further, the absence of detailed repayment information impacts on the accuracy of program forecasts. 13. Nearly 20 million Americans attend college each year, of whom close to 12 million – or 60% – borrow annually to help cover costs. Payees can also make voluntary repayments to reduce their HELP debts. The estimated value of the debt that is not expected to be collected is around $10.2 billion. The audit objective was to assess the effectiveness of the administration of the Higher Education Loan Program (HELP) debts and repayments. Source: ANAO analysis ATO and Education information. Education then collates this data and transfers it to the ATO to be recorded on students’ records. 4.21 The draft communication strategy identifies a number of evaluation indicators for each target audience group. However, the ATO could not advise the ANAO of the value of HELP compulsory repayments that have been raised but not collected through income tax arrangements. It also needs to improve the timeliness of processing applications for the deferment of HELP debt repayments in order to meet internal standards. The Australian Taxation Office (ATO) has released new data on the Higher Education Loan Program (HELP, formerly HECS) debts, covering the 2019–20 financial year. The ATO did not replace the statement mail out with alternative ATO-initiated correspondence relating to changes in payees’ HELP debt balances. 3.31 The ATO’s quality assurance activities form part of a broader governance framework involving three lines of defence. However, there is no single overarching document that describes the various elements. The Australian Government approved Education’s proposal for an enhanced HELP database in November 2015, which should improve Education’s capacity to forecast HELP debt repayment. Nevertheless, issues with the integrity of data contained in files transferred from Education complicate the processes to upload the student debt data into the ATO’s Integrated Core Processing information technology system, and sometimes result in extensive manual data matching processes. Where payees do not lodge their income tax returns by the required date (referred to as non-lodgers), the ATO overstates the amount of HELP debt as it has not been able to attribute those compulsory repayments to the individual. Note 1: In 2015, the VET FEE-HELP and FEE-HELP limit was $97 728 for most students. These risks should be monitored every three months according to the framework and policy, however, the review dates for these plans are 12 months in advance, and in October 2015 the Higher Education Funding Branch risk management plan had not been reviewed for approximately 17 months. Q:Do I need to accept my enrolment offer before I apply for a HELP loan? 3.26 Payees can apply for a compulsory repayment deferment for the current, previous and next financial years.32 Deferring a compulsory repayment does not reduce the payee’s accumulated debt value, as the value of the compulsory repayment remains part of the total accumulated debt and continues to be indexed on an annual basis. There are complex eligibility requirements for the HECS-HELP Benefit including the type of employment undertaken and certain geographical eligibility requirements.3. In 2013, this approach enabled it to match 93 per cent of payee records, which was higher than the match rate of 81 per cent achieved in 2012. This will enable greater analysis of factors affecting HELP debt repayment and inform future policy and program design. The ATO did not update its online HELP repayment calculator17 with the compulsory repayment incomes thresholds for 2014–15 until 25 June 2015—over one year after it was advised of the revised rates. activities undertaken through the Service Delivery Quality Framework and coaching and assurance programs of service delivery business areas (first line of defence); and. The risk management arrangements outlined in the Memorandum of Understanding should assist with the effective management of HELP risks. Guidance issued by the Department of Finance (Finance) indicates that waivers should not be considered when there are other alternatives available.29 Since 2004–05, approximately $650 000 of HELP debt has been waived. If you have obtained one of these loans, you will have a HELP debt. 5.20 Education has indicated that data limitations affect its ability to assess elements of program design. It would be helpful for payees if the ATO updates the HELP repayment calculator earlier in, or prior to, the relevant financial year. The ATO’s responsibilities are further illustrated in Figure 1.4. The ATO manages relatively few HELP write-offs, waivers and deferments, and applies its broader corporate policies and processes in this regard. 50 The Australian Government Actuary uses this information to estimate the value of HELP debt that is unlikely to be collected. However, some inaccurate and incomplete information has been provided. As of 4Q 2019, there are 10.8 million borrowers with $200.7 billion of student loan debt in the Level Student Loan Repayment Plan (student loan repayment in … 60 Department of Education, Other Helpful Links [Internet], Education, available from [accessed June 2015]. While Education advised the ANAO that this measure could not be implemented as the ATO’s Integrated Core Processing information technology system is unable to differentiate repayments by loan type, Education could not provide documentation to demonstrate that there was a formal decision to not implement the measure.20. Source: ANAO analysis of international reports. Education advised the ANAO that it is difficult to accurately prepare long-term projections for HELP due to the various factors that can impact the levels of debt and repayments, such as employment and income levels and higher education participation rates. Further, as a proportion of compulsory repayments, the total value of deferments approved each year has remained relatively stable.36, Figure 3.5: Outcomes of HELP deferment applications since 2009–10. In 2013, this program was expanded to incorporate a pilot targeted at 358 payees with a HELP debt for the 2010–11 income tax year. 3.18 Debts that are deemed as uneconomical to pursue and are subsequently written-off are mostly low-value debt amounts. Accordingly, the ATO and Education need to share their risk assessments to ensure that administration of HELP effectively mitigates risks to an acceptable level. HELP debts and repayments are collected and managed by the Australian Taxation Office (ATO). The two agencies report only limited information publicly relating to the program and could expand the information reported for the benefit of stakeholders. 2.23 The Memorandum of Understanding also requires the ATO to update its annual information materials and website tools with the revised compulsory repayment thresholds. This information should improve the accuracy of Education’s HELP debt repayment forecasting. 3.29 If payees are dissatisfied with the outcome of their deferment application, they can apply to the ATO to have the decision reviewed. The ATO reports on HELP debt by size, HELP debt by state/territory of residence and HELP debtors by HELP repayment income. Compulsory repayments relating to the period prior to a person’s death are to be paid from the estate and the remainder of the HELP debt balance is written-off.27 As indicated in Figure 3.4, $67.5 million in HELP debt associated with deceased clients has been written-off since 2004–05. The ATO is required to lodge a submission to Finance in response to a waiver application.30 In 2013–14 and 2014–15, the ATO was required to provide submissions to Finance for 27 waiver requests. introduce a standing agenda item for risk management at Higher Education Meetings to facilitate discussion of relevant risks. The declining value of repayments as a proportion of the HELP debt affects the sustainability of the program (refer to Chapter 5). Figure 5.2: Value of new HELP debt incurred by students aged 60 years and older. While there are deliverables and key performance indicators for HELP, there is insufficient measurement of sustainability, which is an increasing focus for the Australian Government in the education sector. Education could also consider including the Australian Securities and Investments Commission’s webpage, Paying Off Your Uni Debt, as one of the links to other websites containing relevant information to higher education.60. 48 For VET FEE-HELP, this is rated as ‘high’ from an operational perspective and ‘medium’ from a departmental perspective, and for FEE-HELP, it is rated as ‘medium’ from both perspectives. The ATO’s Integrated Core Processing system does not support accurate processing of the HECS-HELP Benefit in all circumstances, and the ATO estimates that some 12 000 payees are affected by errors including incorrect account balances. More detail is provided in Table 1 below. Updated Higher Education Loan Program (HELP) debt statistics—2019–20 Posted 30/10/2020 by Dr Hazel Ferguson The Australian Taxation Office (ATO) has released new data on the Higher Education Loan Program (HELP, formerly HECS) debts, covering the 2019–20 financial year. Under this framework, each officer has three pieces of work assessed per month, rated as one of four categories (exceeds standard, met standard, met standard with feedback and standard not met) against eight criteria.39 If an officer achieves a result of 100 per cent40 for three consecutive months then the number of assessments is reduced to two in the following months. Monitoring the average return from the 2015 work would help the ATO to determine whether this activity provides an efficient use of its resources. The ANAO suggests that the ATO monitors the HELP populations to ensure that the standard non-lodger program is as successful as the HELP non-lodger program in raising liabilities. 40 A 100 per cent result means that all work was assessed as ‘exceeds standard’, ‘met standard’ or ‘met standard with feedback’. There is a lifetime limit of two loans per student. Are you an Employer with employees who are HELB Loan Beneficiaries? A loan to cover the fee charged by higher education providers for student services and amenities of a non-academic nature, such as sporting activities, career advice, child care and food services. Table 4.1 illustrates the ATO compliance projects that raised the largest amount of compulsory repayments. Note*: ‘VR’ stands for voluntary repayment. However, these activities are not supported by a compliance and enforcement strategy informed by an assessment of HELP risks. LEARN MORE. 4.26 Education also publishes brochures that provide general information about HELP as well as brochures for each type of loan. The Actuary has also developed longitudinal records for each HELP debt payee that forms the basis of its data analysis. A survey of 1000 frontline staff in June 2015, indicated that the ATO could improve the consistency with which these monthly conversations are held as on average 72 per cent of survey respondents had a conversation each month, although this was trending downwards, and 13 per cent had no conversations in the preceding four months.43. 5.4 The ATO reports on the value of HELP repayments in its annual reports. The draft communication strategy also does not outline a forward work program. 2.22 The ANAO’s testing did not identify any variances with the ATO’s calculations; providing assurance that the ATO updated the Integrated Core Processing system with the correct income repayment thresholds and accurately calculated HELP compulsory repayments. HELP voluntary repayments have largely been effectively managed. Education was unable to demonstrate to the ANAO that it routinely monitored and analysed factors affecting the repayment of HELP debt. Table 1.2: Summary of student loan repayment plans, 2014–15, Debt is indexed; unenforced repayments required, Continue to pay by completing annual form. In 2018, incomes below $51,957 were exempt. 2.19 The ANAO tests the ATO’s indexation process on an annual basis to confirm that the parameters used for calculating the indexation factor and the calculated factor were correct, and that the gazetted factor had been correctly applied in the Integrated Core Processing system. To improve the effectiveness of these processes for HELP, the ATO is revising its broader guidance for write-offs, which is out of date and incomplete, and may need to introduce guidance on waivers. The ATO and Education provide sufficient information to support individuals willing to meet their HELP obligations. 5.24 In 2024–25, Education estimates that approximately $5.6 billion in HELP repayments will be collected while the HELP debt will increase by $23.9 billion in the same year—representing a net increase in HELP debt of $18.3 billion. It would be helpful for payees if the ATO updates the HELP repayment calculator earlier in, or prior to, the relevant financial year. To address the matching problem outlined in Chapter 2, the Actuary matches records based on debt amounts incurred in the preceding five years. 1.11 As illustrated in Figure 1.2, this debt is projected to continue growing to approximately $55.3 billion in 2016–17 and $67.6 billion by 2017–18, with around 23 per cent of that debt not expected to be collected. Further, under section 63 of the Public Governance, Performance and Accountability Act 2013, payees can apply to the Minister for Finance to have their debt waived. HELP provides students with loans to cover relevant costs associated with higher education. 43 On 28 May 2015, the survey was issued to a random sample of 1000 frontline staff, of which there were 269 (27 per cent) respondents. During this period the total value of deferments as a proportion of compulsory repayments raised varied between 0.3 per cent in 2008–09 and 0.8 per cent in 2004–05 and 2010–11. WHAT'S NEW. It also has a risk management plan for the Higher Education Funding Branch. The Australian Government introduced arrangements aimed at ensuring a fairer HELP scheme in the 2015–16 Budget, as outlined in Figure 1.1, to provide savings estimated at $25.4 million from 2015–16 to 2018–19. In addition to a ANAO Report No.31 2015–16 Administration of Higher Education Loan Program Debt and Repayments 7 Last modified Friday April 29 @ 10:20 AM HELP voluntary repayments have largely been effectively managed. 154-60 and 154-65. The ATO advised the ANAO that the 28 day service standard is an electronic standard, and as HECS-HELP Benefit applications cannot be received and processed electronically it intends to change the standard to 50 days. In most cases, the structure of these programs is similar to that of Australia; payees are eligible to borrow funds to help cover tuition and living expenses, and payments can be deferred until after study is completed. Having these plans in place, however, does not meet Education’s responsibilities under the Memorandum of Understanding as the intent of the requirement was to capture and address the risks associated with the services delivered by each party. 5.12 The department acknowledges the need to progressively review and improve available public information on HELP. Table 4.2: HELP non-lodger program results, Estimated number of non-lodgers with a HELP debt. https://www.ato.gov.au/Rates/Schedule-8---Calculating-HELP-TSL-and-SFSS-... Administration of Higher Education Loan Program Debt and Repayments. 3 As part of the higher education reform package announced in the 2014−15 Budget, the Government proposed to discontinue the HECS-HELP Benefit from 30 June 2017 as a review of the demand driven education funding system found that there was little evidence to indicate that the benefit was achieving its intended outcome to encourage people to study in the relevant fields. the enterprise-wide process, ATO Quality (second line of defence). The ATO has quality assurance arrangements in place to support the accurate recording of HELP repayments, discounts, write-offs, waivers and deferments, particularly through its Service Delivery Quality Framework and Service Delivery Coaching Framework. Other than the HELP repayment calculator, the ATO updated its key information resources and tools with the revised compulsory repayment income thresholds and HECS-HELP Benefit amounts in a timely manner. 1 Department of Education and Training, Higher Education Loan Program (HELP) [Internet], Education, available from [accessed April 2015]. The ATO has quality assurance arrangements in place to support the accurate recording of HELP repayments, discounts, write-offs, waivers and deferments, particularly through its Service Delivery Quality Framework and Service Delivery Coaching Framework. 66 Australian Taxation Office, Tax Tables [Internet], ATO, available from [accessed October 2015]. The FEE-HELP and VET FEE-HELP risk management plans both identify the risk of providers submitting false or misleading information or not providing necessary information48, which is relevant to Education’s transfer of data to the ATO. 3.11 The ANAO planned to undertake testing of the ATO’s processing of HECS-HELP Benefit applications including confirming that no payees had breached the lifetime limit as well as confirming the number of payees receiving multiple benefits. 38 Broadly, the first line of defence relates to activities undertaken by line management, the second line of defence relates to organisational activities independent of line management and the third line of defence relates to the independent assurance functions, such as internal audit. 3.21 The ATO receives files containing data on deceased individuals from the state and territory registries of births, deaths and marriages. analysing the ATO’s and Education’s HELP debt and repayment monitoring and reporting processes. (Source: ATO, HELP statistics 2019–20, Table 5, 28 October 2020). For 2014–15, the ATO properly applied the HELP indexation factor and compulsory repayment thresholds in updating the Integrated Core Processing system. Figure 5.1: Proportion of payees making compulsory HELP repayments, 2010–11 to 2012–13. of Commonwealth supported places for which HECS-HELP loans paid, No. 4.35 Education advised the ANAO that it undertakes a range of provider and student compliance activities, including: verifying student data; monitoring students’ FEE-HELP and VET FEE-HELP lifetime limits; and reconciling the funds distributed to providers based on estimated student placements against actual student placement data. Previously, each assessor was to have had three pieces of work assessed, however this requirement was removed in May 2015 (following four months when the target was not met). There are unmatched debts that the ATO first advised providers to cancel in January 2014 for which no subsequent action has been taken by the ATO, as it is still awaiting advice from the providers. To simplify and improve the debt recording process, the ANAO recommends that Education and the ATO redesign the controls for the initial recording, transfer and upload of HELP debts. 1.1 The Australian Government provides income-contingent loans to eligible students through the Higher Education Loan Program (HELP), ‘which removes up-front cost barriers to tertiary education and training’.1 Students are required to repay the loan(s) once their income reaches a minimum threshold. 5.27 The ATO is committed to providing reliable data to Education to assist them in analysing the characteristics of the HELP debt. 4.36 The ATO undertakes general employer compliance activities, including desk and field audits, and business-as-usual payee compliance activities that include coverage of HELP. The Australian National Audit Office (ANAO) is a specialist public sector practice providing a range of audit and assurance services to the Parliament and Commonwealth entities. This could be partly because VET FEE-HELP graduates commenced employment on lower starting salaries than FEE-HELP and HECS-HELP graduates, with relatively fewer reaching the income threshold for making repayments. Trade Support Loans (TSL).These loans are established under the: 1. 2.13 Although designed as unique identification numbers, students’ CHESSNs and TFNs are not used for debt matching purposes due to the integrity issues outlined in paragraph 2.3.

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