The proportion of students from wealthier backgrounds taking up the Government’s fees-free tertiary education policy continues to grow, despite its aim to help those facing economic hardship.
Labour’s flagship policy to pay for the first year of tertiary education was introduced in 2018. It was to be expanded to cover the first three years, but this was suspended in 2020, largely due to the impact of Covid-19 and the need to reprioritise spending.
Its original intentions were to help people overcome economic barriers to higher education, while also growing the numbers of those enrolled.
The Government has defended the scheme but the National Party has labelled it “poorly thought through”, given it was failing to improve accessibility or equity for young people from lower-income households.
The head of the country’s student union has also questioned the outcomes of the policy while challenging the Government - and National - to come up with better policies to address rising living costs that are seeing increasing numbers of students forced to work full-time while studying to cover expenses.
Data released to the Herald under the Official Information Act show that in 2017, the year prior to the scheme, 38 per cent of first-year students came from school deciles 1 to 5, generally representing those facing greater socioeconomic hardship and the remaining 62 per cent from deciles 6 to 10.
In the latest data available for 2021, that gap had widened, with just 28 per cent of those taking up the fees-free policy coming from deciles 1 to 5, and 72 per cent from deciles 6 to 10.
The Herald excluded students where the decile was unknown in its analysis of deciles.
The Tertiary Education Commission said the “unknown” group represented students who did not record deciles, including from private schools, schools not in New Zealand and older students who had not come straight from school.
The inequity in accessing tertiary education was even starker when looking solely at university entrants, with 78 per cent from deciles 6 to 10 and 22 per cent from deciles 1 to 5. The difference has barely changed since 2017.
Deciles until 2022 had been used as a broad indicator of socioeconomic factors, indicating where extra funding and support should be distributed. However, they came to be considered a “blunt” determinant and were replaced by the more-targeted Equity Index.
Including the “unknown” category, general trends also show a total drop from 42,227 students using the scheme in 2018 - its first year - to 39,240 in 2021. This was still an increase from 35,771 comparable students in 2017.
The proportion of those utilising the policy to attend university has also increased. In 2021, 63.3 per cent of fees-free students went to university, compared with 55 per cent in 2018, and only 45.5 per cent of comparable students in 2017.
Meanwhile, 22.8 per cent were Te Pūkenga New Zealand Institutes of Skills and Technology students (formerly polytechnics and the like), compared with 28.5 per cent in 2018 and 33 per cent in 2017.
In 2021, 13 per cent were at Private Training Establishments, compared with 16 per cent in 2018 and 20 per cent in 2017, and 0.9 per cent went to wānanga - down from 1.7 per cent in 2017.
Most - 62 per cent - of the fees-free students in 2021 identified as of European ethnicity, 20 per cent Māori, 10 per cent Pasifika, and 18 per cent Asian.
Education Minister Chris Hipkins said he was satisfied with how the policy was operating and cautioned against drawing any “strong conclusions” from the data.
On the apparent rise in inequity, Hipkins said a school’s decile rating did not reflect the economic circumstances of all students, and that was one of the reasons they had changed to the Equity Index.
The fees-free policy was also aimed at work-based learners as well as provider-based learners, meaning people who were at work and doing trades training rather than only those going straight from school.
On the growth in university entrants compared with other institutions, Hipkins said many of those who would have used the policy were involved in the Targeted Training and Apprenticeship Fund (TTAF - free trades training), which launched during Covid-19 and assisted 240,000 learners, many of whom studied at polytechnics or ITPs.
A key aim of the fees-free policy was to reduce debt levels for learners, and Hipkins said between 2017 and 2018 student loan borrowing for fees was reduced by $194.2 million.
The National Party has opposed the scheme since its inception and has called for a more targeted use of the funds.
The party’s tertiary education spokeswoman, Penny Simmonds, said it was “poorly thought through” and was failing to improve accessibility or equity for young people from lower-income households.
“This is around $360 million a year of wasteful spending that would be better targeted at incentivising students into qualifications where skill shortages exist, and specifically helping those most in need of support to access tertiary education and training,” Simmonds said.
Green Party tertiary spokeswoman Chloe Swarbrick said the Government needed to increase support as the scheme was not dealing with the daily barriers to study and reiterated calls for a universal student allowance.
The Green Party’s People’s Inquiry into Student Wellbeing found that two-thirds of tertiary students regularly could not afford basic living expenses.
“The student allowance system is now the most draconian and provides support to the smallest proportion of students since it was implemented,” Swarbrick said.
“If we want to remove barriers to education, we need a universal student allowance.”
New Zealand Union of Students’ Associations president Ellen Dixon said the intention of the policy was good, as it had reduced debt and taken some pressure off students in choosing what to study for that first year, allowing more people to take risks.
But with the increasing cost of living, Dixon said for many the economic pressures were more immediate and had been compounded by the pandemic.
Some students had become homeless and many were now working full-time to support not only themselves but their families, she said.
Given these factors, Dixon said she was not surprised the data showed fewer students facing economic hardship were taking on tertiary education.
“We need a more holistic approach to funding tertiary education. Clearly, we have not yet found a policy that can truly target existing class structures.”
She urged politicians to consider greater student support, including expanding the fees-free scheme and introducing a universal student allowance, ahead of this year’s election.
New Zealand Principals’ Federation president Leanne Otene said the pandemic had exacerbated inequities faced by some students.
“Many low-income families lost their jobs requiring older children between Years 11-13 to find work to help support the family.
“Consequently, rather than plan a career, these young people found themselves in the workforce, and in many cases, permanently. Low income is one of the main determinants of low decile status for a community.”
Otene said there needed to be more support to encourage those from low-income backgrounds to take up tertiary education and keep them there once enrolled.
Course completion rates for first-time 18- to 19-year-old students remained about the same over the past five years, at 84 per cent in 2021.
Fees-free was a flagship policy in Labour’s 2017 campaign but was initially 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.
The total number of domestic students in tertiary education continued a general decline from just over 343,000 in 2017 to just under 330,000 in 2020. That trend appears to have reversed in the past year - in 2021 just under 360,000 students were enrolled, likely due to the Government’s free trades training.
In 2021, Labour shifted the focus of the policy away from participation to reducing the financial burden for first-year tertiary students.
Budget 2022 allocated a further $387m for the scheme, but Hipkins said any decisions on extending it would depend on future Budgets.
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