Fees-free tertiary aiding richer students

Labour-led policy has increased inequity and numbers are falling

The number of decile 1 students in first-year tertiary study has halved since the controversial fees-free policy started, with students from wealthier backgrounds making up an increasingly greater share.

The policy, introduced in 2018, was initially brought in to boost student numbers and to open the door wider for those facing higher economic hurdles. It covers a year of first-time tertiary study, or two years of work-based training, up to $12,000.

But instead of cutting inequity, the policy appears to have exacerbated it.

This pattern has been evident since fees-free started, but it is worsening as the policy enters its final year in 2024 in its present form.

The year before it started — in 2017 — 6.37 per cent of first-year tertiary students came from decile 1 schools. In 2022, that fell to 3.24 per cent. The share of the fees-free pie for students from deciles 1 to 6 has steadily shrunk over the five years the policy has been in place, and grown for students from deciles 7 to 10.

The biggest leap in participation has been for decile 10 students, whose share of first-year tertiary students went from 11 per cent in 2017 to 16 per cent in 2022 — up 43 per cent.

Splitting the decile system in the middle, students from deciles 1-5 made up 38 per cent of first-year tertiary students in 2017. This fell to just 26 per cent in 2022, while those from the top five deciles made up nearly three in every four fees-free students.

For university entrants in 2022, only 9 per cent of fees-free students came from decile 1-3 schools, while 40 per cent came from decile 9 and 10 schools, a Herald analysis shows.

The Herald excluded students where the decile was unknown.

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.

The 2022 data — provided by the Tertiary Education Commission to compare decile fees-free data from previous years — uses the decile based on the last school attended. It relies on data from tertiary providers.

Fees-free, shifting goalposts and self-fulfilling objectives

The original Cabinet paper for the policy said it hoped to entice greater numbers of high school students into tertiary study, “especially for those who have not previously studied or those for whom finance has been a real barrier to participation”.

But the Labour Government moved the goalposts in 2020, changing the policy’s purpose to improving affordability and reducing student debt levels.

This is essentially a self-fulfilling objective. Providing free tuition is always going to make studying more affordable. In the first year of the policy, for example, students saved $194.2 million in fees.

Participation has been falling, mainly due to the introduction in mid-2020 of free apprenticeships and a range of training programmes; in

2022, this helped 170,000 learners. This corresponded to a drop in numbers in fees-free industry training: 5215 new students in 2019 became 820 students in 2020, and in

2022 there were only 10 students. But new fees-free enrolments at government-funded providers in

2022 fell across all qualification levels: by 18 per cent for non-degree study, 11 per cent for bachelor level, and 6 per cent for postgraduate and higher study compared with 2021.

The number of new fees-free students in 2022 was 33,700, which was 5000 fewer than in 2021, 10,000 fewer than in 2020, and 16,000 fewer than in 2019.

This is also lower than the 35,771 comparable students in 2017.

New fees-free enrolments fell in 2022 across most demographic groups compared with 2021, with the biggest drops among female students (45 per cent) and those aged 20 and 24 (41 per cent).

“Fees-free students were also a little more likely to be European or Pacific peoples than non-fees-free students,” says government site Education Counts.

Course completion rates for firsttime 18-19-year-old students “tend to be similar” to before fees-free, it added.

Fees-free Mark II

Next year will be the final year of feesfree for first-year tertiary learners.

From 2025, thanks to coalition negotiations, it will apply to the third year of study. This will save money for the Government because fewer students follow through to their third year.

It is unclear at this stage whether a first-year student with free tuition fees in 2024 might be able to doubledip, and have free tuition again in their third year in 2026.

Retention in fees-free has been falling, which is a reflection of declining participation numbers.

There were 14,530 students in 2020 who had had a year of fees-free study, following the biggest numbers of new fees-free students in 2019. This had dropped to only 9050 returning fees-free students in 2022, and this is likely to drop further as participation continues to fall.

Fees-free was a flagship policy in Labour’s 2017 campaign, with hopes to expand it to cover three years of tertiary study if the state of the government books allowed — which has never come to pass.

The total number of domestic students in tertiary education declined from just over 343,000 in 2017 to just under 330,000 in 2020.

The trend reversed in 2021, when just under 360,000 students were enrolled, but fell in 2022 by 4.1 per cent to about 345,000 students.