By STACEY BODGER
Polytechnics will struggle to find an extra $2.5 million next year to cover the withdrawal of a Government subsidy.
The institutions are already under financial strain after agreeing to freeze their fees next year in exchange for a 2.3 per cent increase in Government backing.
By accepting the offer, they are unable to recoup the $2.5 million study subsidy through raised tuition fees.
Under the Study Right subsidy, tertiary institutions receive more Government money for students aged under 22.
The subsidy was introduced in 1992 to encourage more students into tertiary education, but will be phased out next year.
Polytechnics will be hit harder than universities and private tertiary institutions because of their greater mix of younger students.
Some other institutions stand to gain money from the phase-out, but 17 polytechnics will lose up to $300,000 each.
The Association of Polytechnics (APNZ), which represents 19 institutions, has asked Tertiary Education Minister Steve Maharey to provide supplementary grants to cover the cost.
But Mr Maharey has turned down the request, saying individual polytechnics can approach him next year if they find themselves in financial strife.
One of the worst affected, Manukau Institute of Technology, must find an extra $250,000.
Deputy chief executive Eric Holmberg said polytechnics had been warned about the Study Right phase-out but would find it "remarkably tough" to absorb the cost.
"We just don't know where we will get that extra money from.
"We are going to have to tighten up somewhere, but it won't be until next year that the impact really hits us," Mr Holmberg said.
APNZ will continue to fight for compensatory grants.
Executive director Jim Doyle said it was unfair for institutions to absorb such costs when their budgets were already so tight.
"We are not wanting to rob money from institutions which stand to gain money," he said.
"But those that are going to suffer badly should be compensated - it's going to be tough enough for them to manage next year."
He said $250,000 was the cost of employing between five and eight polytechnic staff.
"There is no indication yet what kind of cuts will have to be made, but when you put a human value on the money, it is very significant."
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