Higher Education (Up-front Payments Tuition Protection Levy) (Risk Rated Premium and Special Tuition Protection Components) Determination 2025

The central concept is the up front payments tuition protection levy, which is a charge on registered higher education providers that receive up front payments from students (as distinct from government subsidised places). The levy funds the Tuition Protection Service that arranges student placement or refunds if a provider fails. The determination deals with two components of that levy.

Risk rated premium component: This is calculated by a method statement in the Act. Step 1 multiplies the number of students by a base amount ($2.00). Step 2 multiplies the provider’s assessable up front payments by a base percentage (0.04%). Step 4 then multiplies the sum of those two by one plus the sum of three risk factor values. So the risk factors act as a multiplier on what would otherwise be a flat charge. The three risk factors are: financial strength, completion rate, and non compliance history and registration renewal.

Financial strength risk factor uses two ratios from a provider’s financial statement submitted to TEQSA for the annual financial reporting period ending in 2024. The return on assets ratio (net profit before tax divided by total assets) and the debt to equity ratio (total liabilities divided by total equity) each earn a score of 1.5 (low), 3.0 (medium), or 4.5 (high) according to the table in section 7(3). The sum of the two scores (maximum 9) maps to a risk factor value: 9 gives 0.0, 6 or 7.5 gives 1.0, 3 or 4.5 gives 2.0, and no submission results in 2.5 (unless the provider was not required to submit, in which case 0.0). Note that a score of 1.5 or 0 (if both ratios score low) is not listed in the table, so the risk factor value for those scores is technically not provided; presumably the table contemplates only the sum outcomes shown, but a score of 1.5 would fall outside and may create an ambiguity. The debt to equity score table uses “high” for ratios less than 1.5 but at least 0.0 - effectively, lower leverage is considered higher strength.

Completion rate risk factor uses a provider’s PIR information (provider information returns to TEQSA) for the 2024 calendar year. The completion rate percentage is calculated as passed EFTSL divided by passed + failed + ongoing + data missing EFTSL, multiplied by 100. The resulting percentage maps to a risk factor value: 85% or more = 0.0; 60% to less than 85% = 1.0; 35% to less than 60% = 2.5; 0% to less than 35% = 3.5. If the provider reported no units of study in PIR for that year, the risk factor value is 0.0. Notably, “data missing EFTSL” is included in the denominator, which penalises providers that fail to report completion statuses.

Non compliance history and registration renewal risk factor combines two elements. First, a weighted late payment measure that averages the days late for levy payments in 2022 (weight 0.1), 2023 (weight 0.2), and 2024 (weight 0.7). Late payment in days maps to risk values: 30 or more days = 2.0; 15 to less than 30 = 0.9; 1 to less than 15 = 0.7; less than 1 day = 0.0. Second, if the provider applied for registration renewal under section 35 of the TEQSA Act and the most recent registration period granted was less than the maximum (due to risk management reasons), the risk factor adds 1.0; if the registration was renewed for the maximum period, it adds 0.0. Where more than one item applies, the values are summed - so a provider could have both a late payment measure and a shortened registration period, resulting in a combined value up to 3.0.

Special tuition protection component is a flat percentage of 0.10% of the provider’s assessable up front payments. It is not subject to any risk adjustment; every leviable provider pays this component on top of the risk rated premium component.

The determination directly affects all leviable providers as defined in section 5 of the Act. These are registered higher education providers that receive up front payments from students for courses of study - essentially, private providers that charge tuition fees directly, as distinct from public universities that primarily rely on Commonwealth supported places and HECS HELP loans. The determination does not apply to providers who only enrol students under the Commonwealth supported system with no up front fees, because those providers do not collect up front payments and therefore are not leviable. The effect is concentrated on the non university higher education sector, including private colleges, institutes, and some niche providers. Each such provider must calculate its levy liability based on the parameters in this determination, which in turn depends on its own financial statements, student completion data, payment timeliness, and TEQSA registration history.

The determination also indirectly affects students who make up front payments, because the levy is a cost of doing business that providers may pass on through higher fees or reduced investment in quality. The compliance burden falls on provider administration: preparing financial statements in accordance with TEQSA reporting standards, ensuring timely submission of PIR information, managing student progression to keep completion rates high, and paying the levy on time to avoid the late payment multiplier. TEQSA is not a direct subject of the determination but plays a role in collecting financial statements and PIR data and managing registration renewals. The Tuition Protection Service is the beneficiary of the levy revenue, though the determination does not specify how the funds are spent.

The determination itself does not impose duties directly; it is a subordinate instrument that sets numbers within a framework established by the Act. However, reading the determination together with the Act and the TEQSA Act, the following duties arise for leviable providers.

Duty to submit financial statements: A provider must have submitted its financial statement to TEQSA for the annual financial reporting period ending in 2024 to be assessed under the financial strength risk factor. If it did not submit, the risk factor value defaults to 2.5 (except where submission was not required). There is no right to a reduced value for late submission; only actual submission before the determination’s application date matters.

Duty to provide PIR information: The completion rate risk factor depends on PIR data for the 2024 calendar year. Providers must report unit completion statuses accurately and comprehensively. The inclusion of “data missing EFTSL” in the denominator creates an implicit duty to report all completions; incomplete reporting inflates the denominator and lowers the completion rate percentage, increasing the risk factor value.

Duty to pay the levy on time: The weighted late payment measure uses payment dates for the 2022, 2023, and 2024 levies. There is no right to contest the measure; it is mechanically calculated from TEQSA’s records. Providers have no ability to correct historical late payment measures after the determination is made.

Duty to comply with registration renewal: If a provider applied for renewal and received a term shorter than the maximum due to risk management reasons, it incurs a 1.0 risk factor. This creates an incentive to maintain a low risk profile to secure the maximum registration period.

Rights: The determination does not confer any rights on providers. There is no right to a review or waiver of the risk factor values; the values are formulaic and objective. Providers cannot appeal the numbers set in this instrument, though they could potentially challenge the underlying data accuracy with TEQSA before it is used.

The determination does not set penalties. The levy itself is a civil debt recoverable under the Act. However, the risk factor scheme indirectly penalises poor behaviour through higher levy amounts. For example, a provider that submits no financial statement receives a 2.5 risk factor for financial strength; combined with a low completion rate (3.5) and chronic late payment (2.0 plus shortened registration 1.0), the sum of risk factors could reach 9.0. Since the risk rated premium component is multiplied by (1 + sum of risk factors), this triples the base premium. For a provider with many students and high up front fee revenue, the additional levy could be substantial.

The weighted late payment measure also serves as a penalty for past non compliance, because it uses a three year look back. A single late payment in 2022 (weighted at 0.1) has only a small effect, but persistent lateness in 2024 (weighted 0.7) dominates. This design encourages providers to prioritise levy payment over other obligations. There is no explicit penalty for failure to submit financial statements or PIR information beyond the adverse risk factor assignment. However, the underlying Act and TEQSA Act separately provide for civil penalties, sanctions, and registration conditions for non compliance with reporting and payment obligations. The determination leverages those requirements by embedding them into the levy calculation.

Enforcement of levy collection is through the Act, not this instrument. The determination merely defines the amount owed. If a provider fails to pay, the Tuition Protection Director can seek recovery through the courts. No criminal penalties are imposed by this determination.

This determination is made under section 13 of the Higher Education (Up front Payments Tuition Protection Levy) Act 2020. It sits as a legislative instrument within that Act’s framework. The Act provides the method statement for calculating the levy; this determination fills in the blank numbers and risk factors. If the Act were amended or repealed, this determination would cease to have effect.

The determination cross references the Tertiary Education Quality and Standards Agency Act 2011 extensively. It uses TEQSA’s definitions of “annual financial reporting period” and relies on financial statements and PIR information submitted under sections 27 and 28 of the TEQSA Act. It also incorporates the registration renewal provisions under sections 35, 36, and 37 of the TEQSA Act for the non compliance history risk factor. This creates a direct dependency: a provider’s levy liability depends on data it already submits to TEQSA for regulatory purposes. There is no separate reporting regime for the levy; it piggybacks on existing TEQSA obligations.

The determination also refers to the Higher Education Support Act 2003 for the definitions of “census date”, “EFTSL”, and “EFTSL value”. This is relevant only for providers that are also higher education providers under that Act (i.e., those that offer Commonwealth supported places). For other providers, census date is defined separately in the determination at section 4(b). This dual definition could cause confusion: a provider that is both a registered higher education provider under the TEQSA Act and a higher education provider under the HESA Act must use the HESA definition for census date; otherwise, it uses the determination’s own definition. The difference matters because census date affects which units of study are counted in the completion rate calculation. The determination maintains consistency with the broader legislative scheme but adds complexity.

No interaction with state laws is identified. The determination operates solely within Commonwealth higher education legislation.

This determination is a standalone instrument that replaces the Higher Education (Up front Payments Tuition Protection Levy) (Risk Rated Premium and Special Tuition Protection Components) Determination 2024 in its entirety, repealed by Schedule 1 effective 1 August 2025. The 2024 determination was the original instrument made under the Act. The 2025 determination appears to replicate the same base amount ($2.00), base percentage (0.04%), and special tuition protection component (0.10%) as its predecessor. The risk factor structures and values are also identical. The only substantive change is the update of reference years: the financial statement period ending in 2024 (rather than 2023), the PIR data for the 2024 calendar year (rather than 2023), and the weighted late payment measure now includes levy years 2022, 2023, and 2024 (previously 2021, 2022, 2023). This is a rolling update of inputs, not a policy change.

There is no amending history within the instrument itself; it is the first replacement. The Act under which it is made has not been amended since its enactment in 2020. The determination has a legislative instrument number but it is not provided in the text; it can be found on the Federal Register of Legislation. The instrument was made on 23 July 2025 by the Acting Higher Education Tuition Protection Director. It is subject to disallowance by Parliament under the Legislation Act 2003, though as a routine annual instrument it is unlikely to attract scrutiny.

The determination has no litigation history because it was made only days ago (dated 23 July 2025) and has not yet been applied. The 2024 determination similarly attracted no reported litigation. The underlying Act has not been the subject of significant judicial consideration. The risk factor methodology has not been challenged in court. Any prospective litigation would likely focus on the validity of the delegated legislation (e.g., whether it complies with the Act’s scope) or on data errors leading to incorrect levy assessments. For example, a provider could argue that its financial statement was submitted but not considered, or that TEQSA’s classification of its registration period was erroneous. However, the determination provides no internal review or appeal mechanism; disputes would be handled under the Act’s general review provisions or judicial review under the Administrative Decisions (Judicial Review) Act 1977. Given the relatively small sums involved for most providers, litigation is unlikely unless a large levy amount is at stake.

Several features of the determination create traps for unwary providers.

Missing financial statement default of 2.5: A provider that fails to submit its financial statement to TEQSA by the relevant deadline receives a risk factor of 2.5, even if its financial health is strong. This is higher than the maximum risk factor for a submitted statement (2.0 for a score of 3 or 4.5). So non submission is penalised more heavily than having poor ratios. A provider that was not required to submit a financial statement receives 0.0, but only if it truly had no obligation. Providers should confirm their obligation with TEQSA.

Debt to equity score trap for negative equity: The “low” category for debt to equity includes “if the total equity is less than or equal to 0.0” (negative equity). That yields a score of 1.5, which is the best possible score for that ratio. This means a provider with negative equity (i.e., total liabilities exceed total assets) is treated as “low risk” in that metric. The formula appears to reward insolvency, which is counterintuitive. However, the return on assets score will likely also be low (since NPBT may be negative), so the combined financial strength score could still be low. But careful: a provider with large losses and negative equity could end up with a financial strength score of 1.5 (ROA low) + 1.5 (debt to equity low) = 3, which maps to a risk factor of 2.0. That is worse than a profitable provider with moderate leverage. The scoring methodology creates anomalous incentives: providers with negative equity do not get the worst risk factor.

Completion rate denominator includes “ongoing” and “data missing”: The formula does not exclude units that are still in progress or missing data. This penalises providers that offer long courses or that have poor data systems. A unit recorded as “ongoing” (e.g., a year long subject that spans census dates) reduces the completion rate because it is not counted as passed. Providers should ensure that PIR data accurately reports completed units in the correct census year and minimises missing data.

Weighted late payment measure uses three years: A single late payment in 2024 (weight 0.7) can dominate the measure, while a late payment in 2022 (weight 0.1) has little effect. Providers must be especially vigilant about paying the 2024 levy on time, as it has the highest weight. The weighting also means that a provider that was late in 2022 but timely in 2023 and 2024 will have a measure less than 1 day only if the 2022 late days were very few; otherwise, it could still trigger a risk factor of 0.7 or more.

Multiple items in non compliance risk factor are summed: If a provider is late (e.g., 2.0) and also has a shortened registration period (1.0), the total is 3.0. There is no cap. That can add significantly to the risk multiplier.

Registration renewal risk factor only applies to providers who applied for renewal: Not all providers will face this element. It applies only if the provider applied under section 35 of the TEQSA Act and the registration period granted is less than the maximum. New providers that have never renewed are not affected. However, providers that renewed recently should check the term of their registration certificate.

No transitional relief: The determination applies with full force from 31 July 2025. There is no grace period or transitional adjustment for providers that experienced data reporting issues in 2024. They must live with the consequences for the 2025 levy year.

Compliance with the determination is administrative and involves ensuring that the data inputs used in the risk factor calculations are accurate and favourable. Since the determination uses historical data, a provider cannot change the inputs after the fact, but can take proactive steps for future years.

Financial statement submission: Ensure that the financial statement for the annual financial reporting period ending in 2024 is submitted to TEQSA on time and accurately. The statement must clearly show net profit before tax, total assets, total liabilities, and total equity. If the provider was not required to submit a financial statement (e.g., because it is a new provider not yet subject to TEQSA reporting), confirm in writing with TEQSA to avoid the 2.5 default.

Completion rate management: Monitor PIR data for the 2024 calendar year. Check that completion statuses are reported for all units with a census date in 2024. Minimise “data missing EFTSL” by ensuring timely reporting of results. Consider offering academic support to improve student pass rates, as completion rates below 85% increase the risk factor. For courses that span census dates (e.g., year long subjects), ensure the unit is properly recorded as “ongoing” only if truly not yet complete; otherwise, report it as passed or failed at the appropriate time.

Levy payment timeliness: Pay the up front payments tuition protection levy on or before the due date each year. The weighted late payment measure for 2025 will use the 2025, 2024, and 2023 levy years (once the 2025 levy is due). Therefore, even if past payments were late, timely payment from now on will improve the measure over time as older years drop out of the weighting. Providers should set up internal reminders and ensure sufficient funds are available.

Registration renewal: When applying for registration renewal under section 35 of the TEQSA Act, aim to meet TEQSA’s requirements to receive the maximum registration period. Engage with TEQSA early to address any risk concerns. If a shorter period is granted, the risk factor of 1.0 will apply for that year, but it can improve at the next renewal.

Record keeping: Maintain records of financial statements, PIR submissions, levy payment receipts, and registration renewal notices. In case of a dispute, these documents will be needed to verify the data used in the risk factor calculation.

No right to opt out: Providers cannot avoid the levy or the risk factors. The only way to reduce the levy is to improve the underlying metrics. Since the determination uses data from the preceding year, there is a lag: improvements made in 2025 will affect the 2026 determination. For the 2025 levy, the data is already set, so providers should focus on verifying the accuracy of the data before the determination applies. If a provider believes TEQSA’s records are incorrect, it should seek correction immediately.