NZ bids farewell to fees

But will free tu­ition deal hit fund­ing?

THE (Times Higher Education) - - FRONT PAGE - El­lie.both­well@timeshigh­ere­d­u­ca­tion.com

Uni­ver­si­ties and aca­demics in New Zealand have broadly wel­comed the gov­ern­ment’s com­mit­ment to abol­ish tu­ition fees, but fear that it will lead to univer­sity fund­ing be­ing cut.

Jacinda Ardern (pic­tured be­low), the coun­try’s new prime min­is­ter, has con­firmed that Labour was “com­mit­ted” to its free ter­tiary ed­u­ca­tion pol­icy and would “work quickly” to try to start rolling it out from 2018.

The pol­icy will even­tu­ally grant three full years of free post-sec­ondary study to any­one who has not pre­vi­ously en­rolled in ter­tiary ed­u­ca­tion. Dur­ing Labour’s elec­tion cam­paign, Ms Ardern said that stu­dents start­ing cour­ses in 2018 would re­ceive one year of fee-free study, grad­u­ally ex­tended to three years by 2024.

Sec­tor fig­ures told Times Higher Ed­u­ca­tion that for 2018 it was likely that new stu­dents would still use the loan scheme to pay their fees, but that th­ese would sub­se­quently be writ­ten off by the gov­ern­ment. In the longer term the gov­ern­ment would likely trans­fer money to uni­ver­si­ties based on their en­rol­ment fig­ures, they said.

Labour’s pre-elec­tion cost­ings put the cost of the free tu­ition pol­icy at NZ$340 mil­lion (£178 mil­lion) a year.

John Hat­tie, di­rec­tor of the Mel­bourne Ed­u­ca­tion Re­search In­sti­tute at the Univer­sity of Mel­bourne, said that the pol­icy was “hugely ex­pen- sive” and that “there is no sign yet [of] what it may do to the univer­sity bud­get”.

“But I imag­ine, like in Aus­tralia, there are few votes af­fected if the univer­sity bud­gets are slashed,” he said.

Stuart McCutcheon, vicechan­cel­lor of the Univer­sity of Auckland, said that “it has cer­tainly been our ex­pe­ri­ence that when gov­ern­ments set out to be more gen­er­ous to stu­dents they com­pen­sate for that by be­ing less gen­er­ous to uni­ver­si­ties”.

Grant Guil­ford, vice-chan­cel­lor of Vic­to­ria Univer­sity of Welling­ton, said that he was “rea­son­ably con­fi­dent that there will be a trans­fer from the state to the uni­ver­si­ties to re­place the loss of fees in­come”, given that the money has been bud­geted for. How­ever, he added that it was un­clear whether the gov­ern­ment would re­place the fees “dol­lar for dol­lar” or based on the av­er­age fee.

Av­er­age tu­ition fees at New Zealand uni­ver­si­ties are about NZ$6,000 a year, un­der tiered fee caps that vary across sub­jects.

Roger Smyth, an in­de­pen­dent con­sul­tant who re­cently re­tired as head of ter­tiary ed­u­ca­tion pol­icy at New Zealand’s Min­istry of Ed­u­ca­tion, said that the gov­ern­ment’s cost­ings were based on the as­sump­tion that the pol­icy would re­sult in a sig­nif­i­cant rise in univer­sity par­tic­i­pa­tion, which he said was “un­likely”.

“This means that the cost­ings are in­cor­rect – the pol­icy will end up cost­ing less than they have as­sumed,” he said.

Chris Whe­lan, ex­ec­u­tive di­rec­tor of Uni­ver­si­ties New Zealand, added that, prior to the elec­tion, “the pol­icy was an­nounced with cost­ings that in­di­cated that higher ed­u­ca­tion

providers would be fully com­pen­sated for the re­duc­tion in fees”.

“As long as that hap­pens, the pol­icy will work,” he said.

The new gov­ern­ment has also brought ter­tiary ed­u­ca­tion un­der the re­spon­si­bil­ity of its new min­is­ter for ed­u­ca­tion, Chris Hip­kins; pre­vi­ously, ed­u­ca­tion and ter­tiary ed­u­ca­tion were sep­a­rate port­fo­lios un­der dif­fer­ent min­is­ters. Re­search, sci­ence and tech­nol­ogy is now a sep­a­rate min­istry.

Pro­fes­sor Guil­ford said that the pre­vi­ous sys­tem was a “very good model”, as it high­lighted that uni­ver­si­ties are “not just teach­ing in­sti­tu­tions, we are re­search-led teach­ing in­sti­tu­tions”, and that the change will make it “slightly more dif­fi­cult” for uni­ver­si­ties.

Fol­low­ing its gen­eral elec­tion on 23 Septem­ber, New Zealand waited 26 days for a gov­ern­ment to be named. Win­ston Peters’ pop­ulist New Zealand First party won 7 per cent of the vote: enough for the bal­ance of power. Peters held court for ne­go­ti­at­ing teams from the in­cum­bent National Party (which won 44 per cent of the vote) and the op­po­si­tion Labour Party (which won 37 per cent, but can also count on the 6 per cent won by the Greens). The ne­go­ti­a­tions were about pol­icy – what pol­icy con­ces­sions would win Peters’ favour.

Fi­nally, on 19 Oc­to­ber, the verdict was an­nounced: NZF would en­ter a coali­tion agree­ment with Labour, and on 24 Oc­to­ber a coali­tion agree­ment was signed. This ush­ered into the prime min­is­ter’s of­fice the charis­matic 37-year-old Jacinda Ardern, who was rushed into the Labour lead­er­ship only six weeks out from the elec­tion to stem bleed­ing poll re­sults.

In many ar­eas, in­clud­ing ter­tiary ed­u­ca­tion, NZF had pol­icy align­ment with Labour. Both par­ties wanted to in­crease fi­nan­cial support for stu­dents. Both wanted to re­duce im­mi­gra­tion – in Labour’s case, by re­duc­ing in­ter­na­tional stu­dent num­bers in lowlevel ter­tiary qual­i­fi­ca­tions that have been used as a path­way to res­i­dency. Both wanted to strengthen ca­reers ad­vice. Both pro­posed a national di­a­logue on the fu­ture of ed­u­ca­tion.

National’s pol­icy, on the other hand, was al­most an af­ter­thought, re­leased in the days lead­ing up to the elec­tion. It wanted to work to­wards hav­ing a univer­sity ranked in the global top 50 and to raise the tar­get for the value of in­ter­na­tional ed­u­ca­tion to NZ$7 bil­lion by 2025 (£3.7 bil­lion) – up from the present tar­get of NZ$5 bil­lion.

So, what can we ex­pect for ter­tiary ed­u­ca­tion? The coali­tion has adopted Labour’s com­pre­hen­sive and de­tailed poli­cies. Its flag­ship pol­icy of three years of fees-free ter­tiary ed­u­ca­tion will start its six-year phase-in in 2018. New stu­dents will ini­tially get the bor­row­ing for their first-year fees writ­ten off. But, as the pol­icy phases in and fees are no longer paid at all for stu­dents’ first three years of study, the gov­ern­ment will want to strike new fund­ing rates that com­pen­sate in­sti­tu­tions for those for­gone fees.

Given the large vari­a­tions in tu­ition fees be­tween in­sti­tu­tions, the new fees-free fund­ing rates would see some in­sti­tu­tions lose, while oth­ers would re­ceive a wind­fall. Ne­go­ti­a­tions with the sec­tor – es­pe­cially with the pow­er­ful univer­sity lobby – on how to man­age this will be…in­ter­est­ing.

The Labour Party ex­pects that its fees-free pol­icy will boost par­tic­i­pa­tion. That’s highly un­likely. In New Zealand, ev­ery­one who can meet the aca­demic en­try re­quire­ments for a de­gree and who wants to study can find a place in the sys­tem – if not nec­es­sar­ily in their pro­gramme of choice. There may be a small par­tic­i­pa­tion re­sponse in fur­ther/ vo­ca­tional ed­u­ca­tion, and there may be some move­ment be­tween dif­fer­ent types of in­sti­tu­tions. But with a fall­ing school­leaver co­hort and a strong em­ploy­ment mar­ket, any over­all in­crease in en­rol­ments is likely to be neg­li­gi­ble.

And crit­ics will mark the gov­ern­ment down be­cause this mea­sure rep­re­sents dead-weight spend­ing and be­cause fees-free – es­pe­cially at the de­gree level – is highly re­gres­sive.

Labour has also pledged an ex­tra NZ$50 a week in the liv­ing costs com­po­nent of the stu­dent loan scheme, and for those who re­ceive a grant un­der the tar­geted stu­dent al­lowances scheme.

That’s also a high cost: un­der New Zealand’s in­ter­est-free loan scheme, lend­ing costs about 40 cents per dol­lar. But this pol­icy is a re­sponse to hous­ing costs, which have risen much faster over the past 10 years than have the bor­row­ing en­ti­tle­ment and the al­lowance rate, (which are in­dexed by the con­sumer price in­dex).

In­ter­na­tional stu­dent visa rules will also change. For sub-de­gree stu­dents, work rights will go. Re­quire­ments for post-study work visas will ramp up, stem­ming the path­way to res­i­dence for those with­out de­grees. Th­ese changes are ex­pected to cost providers NZ$250 mil­lion a year. Uni­ver­si­ties will be un­af­fected, but other providers will suf­fer.

There will also be an ed­u­ca­tion sum­mit, a re­quire­ment for gov­ern­ing coun­cils to have a stu­dent mem­ber and re­views of both the Ter­tiary Ed­u­ca­tion Com­mis­sion and the Per­for­mance-Based Re­search Fund. It will be an ex­cit­ing three years.

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