This policy change is perhaps one of the first I haven’t felt like screaming at. Instead, I sighed in relief that partial fees-free tertiary education is not gone altogether to fund the gaping holes in the Government’s fiscal plan.
At first, it seems the change is to incentivise students to finish their degree, but on closer inspection, it is made primarily to make up money following the National Party’s failure to convince New Zealand First to lift the foreign buyers’ ban to fund National’s tax cuts.
Minister of Finance Nicola Willis said the policy change would have a positive impact on the Government’s book because more people start their degree than finish it; therefore, fewer people would be claiming last year fees-free tertiary education.
Minister of Finance Nicola Willis said the policy change would have a positive impact on the Government’s book. Photo / Mark Mitchell
The first-year fee-free policy costs about $330 million per year. The completion rate for tertiary education is 58 per cent. Assuming 58 per cent of people who claim first year fees-free tertiary education stayed to receive last year fees-free tertiary education, it would cost the Government around $191.4m, saving it around $138.6m per year. And assuming completion rates and fees costs remain the same, the policy change could save a government over half a billion over four years.
New Zealanders find themselves in a unique position to have interest-free student loans. A student who takes out a loan to pay for their final years of studies after getting the first free will now be taking out a student loan to fund the first years of studies before getting the last year free.
The fees for courses, particularly for university degrees, that do not have many practical elements, usually do not differ significantly from year to year.
The new Government will change Labour’s first-year fees-free tertiary education policy to fees free for the last year. Photo / 123rf
The student loans are likely to remain similar. However, I wonder if the order in which the fees-free year applies makes a difference. The act of having to apply for a student loan and having a debt at 17 would put off some high school leavers from getting tertiary education. University (or other tertiary education) is a daunting place to start, so adding a bureaucratic and complicated process such as applying for a student loan and having a debt of thousands could be frightening for young people.
The Government could address the concern by simplifying application processes and providing students comprehensive support to get applications in. Students would also benefit from how the loan repayment works. However, in my opinion, student support is generally appalling, particularly at universities.
I fear that some students may fall into loopholes because they don’t know what needs to be done after high school and have no one to assist them. As a high school leaver, choosing what and where I wanted to study was complicated and overwhelming.
I had autonomy over my education for the first time in the education system. I went to a decile one school with limited resources to assist students beyond high school studies. The Government would need to wrap a lot of support around students in the form of trained staff in lower decile schools so they are not debilitated by the pressure of choosing courses and universities and applying for scholarships and loans. However, this policy change does nothing to address why students don’t complete their education once they get into tertiary education.
The millions the Government saves from the policy change aren’t being put back into students. It will likely end up in the back pockets of uber-wealthy New Zealanders. If the Government doesn’t ensure students are not falling out of loopholes, it will rob many of their education.
