What's up with Fees Free?

There’s been a lot of discussion around the Government’s free tertiary education policy recently after it was announced that $197 million of unspent money will be redirected due to lower than expected enrolment.

This caused many to declare the policy a failure and even called into question whether it will still be implemented.

So, why does the program have unspent money? When the policy was budgeted, it was assumed that it would be funding around 80,000 students, however numbers have been much lower, with only around 50,000 students collecting fees free in 2018. This has left a lot of allocated money unspent.

Does this mean the policy is a failure? Not really. The policy had three main goals, each of which has had different levels of success:

1. To encourage people into tertiary education: Enrolment in university has been almost flat since the rollout of the policy, which may sound like a failure - until you realise that university enrolments had been steadily dropping each year since 2010. In that sense, consistent enrolments can been seen as a small win for the policy. 2. To make university more accessible for people with lower incomes: This is the policy’s least successful area. There is little evidence that the Fees Free policy has changed the demographic makeup of tertiary students. Although, it's possible we will see more of an effect once all three years are free. 3. To lessen the burden of student debt on graduates – hopefully making it easier to save and buy houses later in life: Now to the goal that the Government has talked about most, which is easing student debt. Although student loans are interest free in New Zealand, the loan repayments reduce our take home pay for years, making saving that much harder. Labour’s 2017 election policy pointed to student debt as a contributing factor in record low levels of home ownership among young people. In this area, the policy has been a clear winner.

Will the rest of the policy still be implemented? While the media has been speculating that it won’t be, it’s still early days. Grant Robertson, the Finance Minister responsible for deciding what gets funded, has said there is some flexibility in when the policy is implemented – but has not expressed any suggestion that the policy will be canned.

However, things can change quickly in politics and there will be an election between now and the policy’s next phase. Rest assured, the future of the Fees Free policy will remain a hotly debated topic.