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The Tuition Protection Service assists and protects students with VET Student Loans if you default - that is, if you close, fail to start, or stop offering a course or unit of study. A provider default occurs when a course provided by an approved course provider is not delivered to completion - for example, where a provider closes, fails to start, or stops offering a course or unit of study.
Note: if you intend to default, you must report this to the department.
50.1 - VSL tuition protection levy
As part of the service, non-exempt providers need to pay the VSL tuition protection levy.
The levy consists of an administrative fee component, a risk-rated premium component and a special tuition protection component. It is collected in the second half of each calendar year.
You must pay an annual levy that aligns with your size and risk. The Australian Government Actuary developed the framework to ensure the tuition protection arrangements are sustainable and can respond to trends in each sector.
The levy is reviewed annually to ensure it remains appropriate to the sector. It is calculated in line with legislative instruments.
Parts of the levy are calculated using a provider’s validated data from previous years so that it reflects the provider’s actual enrolments and risk. Therefore, it is essential that you ensure your reportable data is up to date.
The levy is held in a sector-specific quarantined account and is used to support students and providers.
Tuition protection arrangements can be used only for tuition fees paid using a VET Student Loan.
50.2 - Exempt providers
TAFEs, other government-owned providers and Table A universities are exempt from the tuition protection service levy. However, they still have obligations concerning providing information about replacement courses and obligations as replacement providers.
These providers are exempt because they are at very low risk of default. If they do default, they have a greater capacity and capability to place students in suitable replacement courses without the assistance of the VET Student Loans Tuition Protection Director.
To ensure students accessing a VET Student Loan with publicly owned providers receive equal protections and assistance as those studying with private providers, conditions of approval have been imposed on publicly owned providers to ensure they support their VSL students if the provider stops offering any of their courses.
As part of their support for students, publicly owned providers must facilitate students’ transfer to replacement courses/providers. If a replacement course or provider is not available, they must re‑credit the student’s HELP balance for affected parts of the course.
This recredit will be for tuition fees paid using VET Student Loan for the original course or parts of the course, which were not completed due to the provider’s default.
50.3 - Defaulting on a student
If you intend to default in relation to a student, you must give the Secretary written notice of the intention as soon as practicable.
Upon default, you must notify the TPS Director of the circumstances of the default within 24 hours. You must also provide the affected students’ contact details, their course and fee information within 3 business days. Failure to meet these obligations attracts a civil penalty.
50.4 - Tuition Protection Review
The Tuition Protection Review Final Report was tabled in Parliament on 7 April 2022. The review considered current tuition protection arrangements and explored the suitability and feasibility of expanding the Tuition Protection Service to the up-front payments VET sector, in line with the review terms of reference.
Legislation: Act Parts 5A and 5B, s 66, Rules s 47, s 51, s 111