In a significant policy pivot, the New Zealand government has announced a major overhaul of its approach to tertiary education funding. Since 2018, the government has covered the fees for eligible students’ first year of tertiary studies. However, in a move that aligns with NZ First’s election-year manifesto and diverges from the initial Labour Party promise, the focus will now shift to covering the fees for the final year of study, beginning from 2025.
Policy Overview
The change in policy signifies a departure from the Labour Party’s 2018 initiative aimed at making tertiary education more accessible and affordable. The original fees-free scheme, which covered first-time learners in their first year of provider-based study or their first two years of work-based training, was designed to improve access and affordability, enhance education outcomes, and ensure fiscal control and cost-effectiveness. However, despite its noble intentions, the scheme has faced criticism for its impact on enrolment numbers, its financial sustainability, and its ability to address long-standing equity issues in the tertiary education sector.
Political and Policy Impact
The National Party, initially a critic of the fees-free scheme, had softened its stance by the last election cycle, committing to retain the policy. In contrast, the Act Party called for its abolition, citing minimal impact on tertiary enrolments. The proposed change reflects a broader debate on the efficacy and direction of tertiary education funding in New Zealand, amid concerns about financial stress within the sector, falling domestic enrolments, and the persistent equity gap.
Scheme Evaluation
Since its introduction, the fees-free policy has been scrutinised for not meeting its enrolment expectations and for potentially exacerbating the equity gap in tertiary education. Government data and reports suggest that while the policy stabilised overall enrolment declines, it did not significantly alter the demographic composition of tertiary education, with students from wealthier backgrounds increasingly dominating the enrolment figures. Furthermore, the completion rates for Māori and Pacific peoples have declined, raising questions about the scheme’s effectiveness in fostering educational parity.
Funding Shift Rationale
The government’s decision to fund the final year of study, rather than the first, aims to incentivise completion and potentially ensure more targeted support for students as they prepare to enter the workforce. This shift is also seen as a move to enhance fiscal efficiency, with the government anticipating savings from reduced initial enrolments and focusing on supporting students who are more likely to complete their tertiary education.
Implementation Concerns
Stakeholders have expressed concerns about the implementation and implications of the new policy. Student associations worry about the administrative burden on universities and the potential exclusion of students in shorter courses or part-time study from the scheme. There is also a broader concern that shifting funding to the final year may not address the root issues of accessibility and equity in tertiary education, potentially deterring students from lower socio-economic backgrounds from pursuing higher education due to upfront costs.
The Future of Funding
As New Zealand prepares for this policy shift, it’s clear that the debate over how best to fund tertiary education, encourage enrolment, and ensure equitable access for all New Zealanders is far from over. The government’s move reflects a strategic reevaluation of its investment in tertiary education, aiming for both fiscal prudence and educational efficacy. However, the success of this new direction will depend on its implementation details, its impact on student enrolments and completion rates, and its ability to address the persistent challenges of equity and access in New Zealand’s tertiary education system.
