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Breaking down the Government’s plan for tertiary education

Thursday 2nd November 2017

It’s hard out here for a student.


Jacinda Ardern talks to students at Victoria University.
Jacinda Ardern talks to students at Victoria University.

Photo: RNZ/Chris Bramwell

The Government is reiterating a promise of free tertiary fees for those planning on studying for the first time next year.

Free tertiary education was one of Labour’s major sweeteners on the campaign trail.

The party offered one year of free post-secondary education in 2018, and three free years by 2024. By then, the total cost of the policy would be $1.2 billion per year.

The new Education Minister, Chris Hipkins, told The Wireless officials were working urgently to implement the policy by January.

While an official announcement won’t take place for a few weeks, he said prospective students needn’t worry.

“Students enrolling for the first time can do so right now through the normal channels, confident in the knowledge that their education will be free,” he said.

The policy covers all full-time equivalent (FTE) students, including those enrolling in polytechnic courses and apprenticeships.

Hipkins said those studying on a part-time basis may be able to spread their free year over several years.

“We want to see more people participating in tertiary education. We also want to see people finishing without the enormous financial debts they are ending up with at the moment,” he said.

“The prospect of huge debt is something that deters a lot of people from study. We know that the higher levels of qualifications people have, the more money they earn, and that’s the key to a more prosperous society.”

Hipkins said the policy would be lucrative for the Government as “the more money they earn, the more tax they pay”.

Prime Minister Jacinda Ardern has previously said student life is too dear for too many.

“The idea that roughly $170 is going to cover your rent just isn't fair. This is a really practical decision. I think when people hear that that's what people were trying to survive on, they'll understand why we've put that extra boost in there,” she said in August.

Hipkins said the plan is to increase student allowances by $50 per week from the beginning of 2018. The amount students can borrow under the student loan scheme will also increase by $50 per week.

He said school leavers are the most obvious benefactors from Labour’s plan, but also, “parents will be very relieved their kids are going to have less debt at the end of their study”.

“We also think this will lead to higher incomes for people from poorer backgrounds and break some of that low income cycle we see too often,” he said.

Chris Hipkins.
Chris Hipkins.

Photo: RNZ/Richard Tindiller

Student loans were made interest-free by the Labour Government in 2006 - a policy continued under National.

In 2013, National announced that student loan defaulters could be arrested at the border in an attempt to crack down on $430 million of debt.

Hipkins said that’s not the message he wants to send: “At the moment it’s a huge disincentive for New Zealanders to come home.”

He said the Government is looking into how they can help borrowers living overseas “get square again”.

There have been concerns regarding Labour’s policies.

In August, a Herald editorial suggested Labour would “dilute the quality of the courses on offer” and depress the value of many university or polytechnic qualifications.

Hipkins said evidence shows that as the number of people studying tertiary courses has increased over the past few decades, as has their average earnings. “That doesn’t diminish as the number of qualified people increases.”

The Wireless spoke to a member of the Tertiary Education Union, who said the biggest concern in the sector is the lack of funding for some institutions, which is leading to more part-time staff and a drop in the quality of teaching.

Otago University announced this morning it was planning five further job cuts. The university said last month 160 FTE support staff jobs would be cut.

Hipkins couldn’t promise anything in that regard.

“We do know that the funding rates that some institutions receive have been frozen for a long time - in some cases eight or nine years - so we’re going to look at that and whether the current rates are sufficient.”

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Max is a journalist who has worked for The Star, Bleacher Report and RNZ News.
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