Fees and funding in New Zealand could be set for a shake-up, after the country’s university review switched its focus to “efficiencies and prioritisation”.
In a discussion document for its third round of consultations, the University Advisory Group notes that institutions have already made “hard” decisions. “What reprioritisation might further be considered?” it asks. “Does the current system have the right balance of public (tuition subsidies) and private (student fees) contributions? What changes should be considered?”
Consultant Roger Smyth said that while the questions had raised some alarm, the panel “wouldn’t be doing its job” if it overlooked such issues.
“It’s entirely reasonable for the group to be considering scenarios that involve either static or reducing income,” said Mr Smyth, a former head of tertiary policy at the Ministry of Education. “Everything should be on the table.”
He said the panel might consider the size of fees and loan repayment arrangements, including whether the zero-interest loans should be indexed. The proposal to shift the “fees-free” scheme from the first to the last year of studies could also be examined.
Any changes to loan settings would need careful reflection, he warned. “It’s a complicated area.”
Universities New Zealand chief executive Chris Whelan said average student loan balances in New Zealand were reasonably low, reaching around NZ$36,000 (£16,710) and typically paid off in about eight years.
Students and graduates are taxed 12 per cent on earnings above NZ$24,128 a year. “That is a burden on a young person out of university [who] wants to get on with life,” Mr Whelan conceded. “Are those settings still right? A review like this is a good time to ask that question.”
Marcail Parkinson, president of Victoria University of Wellington Students’ Association, said “most” students started paying off their loans before they graduated. Part-time hospitality jobs to cover living costs pushed many over the repayment threshold, she said.
Ms Parkinson said fees, loans and student allowances were a “massive issue” and the panel was right to consider them. She said living costs and debt aversion were a particular obstacle to participation by people from marginalised groups who were expected to contribute to their families financially when they reached working age.
She said the broader economic benefits of higher education were “really strong” and spending on students “would probably end up paying itself back through taxes”.
Mr Whelan said the panel was right to look for efficiencies but warned that they would be hard to find. “There are savings but they’re all things that are going to compromise student experience, quality, risk.” Opportunities for collaboration mostly required upfront spending to secure “uncertain middle-term returns”.
Mr Smyth said he expected the panel to scrutinise the Performance-based Research Fund, a laborious assessment exercise which guides the allocation of NZ$315 million of block grants each year, and the investment planning system, a three-yearly process where universities outline how they intend to use government funding.
“Both of those are obvious candidates, at least for a look. You [might not] necessarily do away with them, but you might try and find more efficient ways of doing them.”
Consultation closes a week before Christmas, with the final report due in February. An interim report produced in September, currently under consideration by the government, is expected to be released before the year’s end.
