Who benefits from fees-free? The swing from polytechnic to university

Fees-free has seen a higher proportion of students head to university instead of institutes of technology or polytechnics. Photo / Mark Mitchell

The Government's flagship fees-free policy seems to be sending more students to university at the expense of other tertiary education sectors.

Data released to the Herald under the Official Information Act shows that more than half of the fees-free students in 2019 went to university, while 77 per cent of those university students came from decile 6 to 10 schools.

This reinforces the impact of the policy from 2018, when more than 20 per cent of first-time students swung towards university and away from other tertiary sectors including the NZ Institute of Skills and Technology, which formed with the merging of polytechnics and institutes of technology.

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The data, from the Tertiary Education Commission, also shows an increasing rate of failure or withdrawal from students who stayed in tertiary education after their first fees-free year.

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It comes at a time when the Government has suspended extending the policy to cover a first-time tertiary student's fees for their second year of study, which was meant to come into effect next year pending the state of the government coffers.

And with rising debt due to the Covid-19 response, the Government has shifted its focus and set aside $320 million in this year's Budget to make free trades training and apprenticeships free for two years.

The commission provided the Herald with a breakdown of 2019 fees-free students by decile and compared this with 2018 and a comparable group of 18- and 19-year-old students in 2017, before fees-free was implemented.

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Excluding students where the decile was unknown, decile 6 to 10 students made up 69 per cent of fees-free students in 2019, 68 per cent in 2018, and 62 per cent from the 2017 group.

The proportion of students heading to different education sectors in 2019 was similar to 2018:

• 52.8 per cent of fees-free students went to university in 2019, compared to 55 per cent in 2018 and only 45.5 per cent of comparable students in 2017

• 29.7 per cent were NZ Institutes of Skills and Technology students, compared to 28.5 per cent in 2018 and 33 per cent in 2017

• 17 per cent were private training establishments (PTEs) students, compared to 16 per cent in 2018 and 20 per cent in 2017

• Less than half a per cent went to wānanga in 2018 and in 2019, but 1.7 per cent went to wānanga in 2017

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Most - 69 per cent - of the fees-free students in 2019 were of European ethnicity, 18 per cent were Māori, 11 per cent Pasifika, and 12 per cent Asian.

Education Minister Chris Hipkins declined to comment.

National's tertiary education spokeswoman Penny Simmonds said fees-free was a waste of money.

"It simply encouraged more wealthy young people to have a 'social' year away from home at a university with little intention of actually completing a qualification.

"It is scandalous in a time of unprecedented debt in New Zealand such a wasteful and untargeted scheme should be allowed to continue."

The Tertiary Education Commission paid $254 million for fees-free enrolments in 2019.

National's tertiary education spokeswoman Penny Simmonds. Photo / Supplied

The Herald also asked about the failure or withdrawal rates, and the 2019 numbers were practically the same as in 2018.

Of the fees-free students, a quarter of them failed at least one course for both 2018 and 2019, 16.2 per cent withdrew from at least one course in 2019 compared to 15.8 per cent in 2018, and 35.1 per cent of them did not complete at least one course for both years.

But the figures jump for 2018 fees-free students who continued to second-year tertiary study: 28.2 per cent failed at least one course, 22.8 per cent withdrew at least one course, and 42 per cent did not complete at least one course.

The average course cost in 2019 was $2820, while the median course cost was $1522.

Fees-free was a flagship policy in Labour's 2017 campaign, but has been beset with issues.

Labour had hoped the policy would encourage would-be students from poorer households to get a foot in the door of tertiary study, and boost tertiary numbers overall.

But enrolments fell from 310,000 in 2017 to 305,910 in 2018 to 303,065 in 2019.

The number of new fees-free students in 2019 was 47,550, slightly up on 47,105 students in 2018.

In this year's Budget, Labour shifted the focus of the policy away from participation to reducing the financial burden for first year tertiary students.

The Tertiary Education Commission said it only held decile data for about 80 per cent of fees-free students.

"Not all students in the tertiary education system attended a New Zealand secondary school. Therefore care should be taken about drawing any conclusions from the data provided."