Fewer people eligible for fees-free study policy than first thought

Fewer people enrolled in tertiary education than expected in 2017. Photo / NZ Herald

The number of people theoretically eligible for the Government's fees-free policy has dropped 26,000 from the 80,000 it touted when it launched the policy in December last year.

The first round of data on the high-profile policy showed that the estimated number of potentially eligible students at tertiary providers at April 2018 was 52,300 and those in workplace-based training was 1700, down from a combined 80,000 in an earlier estimate.

"The Ministry [of Education's] costings were based on assumptions from data from 2016, the most up-to-date information at the time, and were set deliberately at the upper limit to ensure sufficient funding was provided to tertiary institutions in January 2018," Education Minister Chris Hipkins said today.

Lower than expected enrolments in 2017 and a strong labour market resulted in $31.7 million a year being available to give as tuition subsidies to polytechnics, universities and other tertiary institutions.

"Tertiary education enrolments steadily declined from 2010 to 2016, and 2017 was worse than we expected but the data was not available in time for Budget 2018," Hipkins said in a statement.

"The decline has challenged providers' ability to maintain the quality of what they deliver to students, made worse by tuition subsidies generally decreasing in real terms since 2011 as increases were targeted by the previous government at particular fields and levels of study."

The increase in tuition subsidies would ease some of the pressures faced by the sector but Hipkins said he was also reviewing the vocational and training education system and institutes of technology and polytechnics, including funding systems.

He would also soon begin consultation on the maximum amount tertiary education providers would be able to increase fees by in 2019.

Hipkins said the initial data on fees-free indicated that more than 33,000 students and trainees were receiving fees-free tertiary education up to April 2018.

In the January to March 2018 quarter, 25,400 fewer students were borrowing to pay fees than in the same quarter in 2017.

Borrowing was $151 million lower in the first three months of 2018 than during the same period in 2017.

"That's a great start to our commitment to reduce financial barriers to New Zealanders participating in post-school education and training," Hipkins said.

Enrolments across tertiary providers for the majority of level 3 and above courses for the first four months of 2018 were about the same as the previous year, after a drop of about 5000 in the year to the end of 2017."

"Signs the policy may have contributed to stabilising the past significant decline in enrolments is also pleasing," Hipkins said.

Number of fees-free eligible enrolments reported as at April 2018

Universities: 21,100

Polytechnics: 7500

Wānanga: 100

Private Training Establishments: 3600

Industry Training Organisations: 1200

Total 33,500