A funding standoff between the Government and universities and polytechnics could cost students $400 more in fees next year.
The Herald understands that a secret deal offered by the Government to tertiary institutions this week in exchange for another tuition fee freeze received a cool reception becauseit would give little extra money.
If the two parties cannot find a compromise within three months, average tuition fees of $3500 are expected to rise to $3900 next year, sources say.
The Government, which wants to give students a second break from tuition fee rises next year, has offered tertiary institutions 2.8 per cent more money than this year.
That increase will give institutions slightly more than the $31 million they received this year, assuming student numbers stay the same.
Last year, institutions accepted a 2.3 per cent rise in the bulk funding grant, which is split between them based on student numbers, as a trade-off for a freeze on tuition fees this year.
The Government is presenting this week's offer - which is a Budget secret until May 24 - as a 5.1 per cent increase in funding, but it includes the previous 2.3 per cent rise.
Institutions spoken to by the Herald claimed the deal on the table could force some into financial ruin next year.
But some believe they will have no option but to accept the Government's offer as they are likely to be worse off without it.
It is understood that universities and polytechnics which turn down the deal will forfeit the 2.3 per cent increase in this year's funding as well.
Last night, University Students Association co-president Andrew Campbell appealed to institutions to accept the deal in order to freeze fees again.
"It's more than any Government has reinvested in tertiary education since 1990.
"It needs to be better, but it's a start and it's good enough for institutions to hold their fees."
A spokesman for Tertiary Education Minister Steve Maharey declined to comment, citing Budget secrecy.
