Student fees linked to inflation

Tertiary fees are to be linked to the consumer price index (CPI) from now on.

The maximum fee will be adjusted annually by the estimated rate of inflation and set at Budget time, Tertiary Education Minister Steve Maharey said.

Indicative rates for the two subsequent years will be set out at the same time.

"The effect is that fees will be linked to the CPI and will not be permitted to rise in real terms," he said.

Money for tuition subsidies would increase by 3 per cent next year compared to a projected CPI rise of 1.8 per cent.

The Government had worked closely with the tertiary sector to develop this policy, which would apply to degree and non-degree courses.

Fees for category A degrees, which include arts and social sciences degrees; and category I (teaching); are set at $3900 next year, $3990 in 2005 and $4074 in 2006.

At the top end of the scale category G fees, which include dentistry, medicine and veterinary science, are set at $10,000 next year, $10,230 in 2005 and $10,445 in 2006. A new category has been established for business and law courses which were previously part of category A. The funding rate is the same.

The range of postgraduate fees was so wide it was too difficult to set maximum levels, Mr Maharey said.

But the Government was introducing a requirement that the Tertiary Education Commission approve increases of more than $1000 and a review would be undertaken to ensure postgraduate fees had not risen too much.

"The rates have been set to ensure that all public institutions are able to at least maintain their income per student in real terms," Mr Maharey said.

"Because the Government has increased tuition subsidies for next year by more than the projected CPI increase, most institutions will not need to raise their fees by the rate of inflation to achieve this."



With tertiary reforms now in place, the focus of the Budget was to provide predictability so the sector could get on with meeting the needs of students, business and the community.

It was difficult to predict how the maximum-fee levels would affect private training establishments because of a lack of solid data.

Those whose fees are above the maximum will not be allowed to increase them.

Yesterday's announcements are part of a $490 million package in the Budget. Other initiatives announced include:

* $23 million for a bonded scholarships and research fellowships package to attract students to study in professions important to New Zealand's success.

* $36 million over four years for part-time, part-year students to access the student loans scheme.

* $4.8 million over four years for 16- and 17-year-olds who have completed year 13 to apply for student allowances.

* $4 million over four years for Student Job Search.

- NZPA