Influx of ‘unfunded students’ feared at New Zealand universities

New Zealand universities say they may be forced to carry thousands of unsubsidised students this year, with demand outstripping available funding and a budget top-up set to expire in December.

Universities New Zealand (UNZ) chief executive Chris Whelan said his members routinely had a few dozen students who, for one reason or another, did not attract government subsidies. That could change this year, with enrolments rising about 4 per cent after the Tertiary Education Commission (TEC) increased its funding rate by just 2.5 per cent.

Whelan said he understood that university enrolments had exceeded TEC projections by the equivalent of 4,200 full-time students. He said the agency had “some additional funding” but needed to keep money in reserve for mid-year enrolments.

“It is the first time we’re looking at potentially more than a handful of students being unfunded,” he said. “We haven’t really faced that situation, to the best of my knowledge, since the 1980s.”

TEC rules include the flexibility to pay over-enrolled institutions up to 2 per cent more than they have been allocated. Universities that exceed this buffer receive only the tuition fees – typically about one-third of teaching costs – unless they can convince the TEC to release extra funding, and they must obtain prior written approval to exceed their allocations by more than 5 per cent.

TEC chief executive Tim Fowler said he expected to be able to cover the 2 per cent buffer for universities that exceeded their quotas. But additional increases were “not guaranteed” and would only be considered in science, technology, engineering and mathematics (STEM) fields.

“The STEM focus reflects the economic growth priorities of government and demands from industry for qualified graduates,” he said. The government has indicated that it wants more graduates in areas including construction, health and agriculture, according to guidance released to the sector last year.

Fowler said additional funding requests would be considered after institutions confirm their final first-semester enrolment data in April, and would depend on “under-delivery in other parts of the sector” but “those decisions will involve trade-offs”.

Whelan criticised the idea that students without funded places could switch to STEM degrees. He said many would not have done the prerequisite subjects at high school.

To make matters worse, a temporary lifeline announced in the dying days of the former Labour government – a 4 per cent boost to degree-level teaching subsidies, worth an estimated NZ$128 million (£57 million) across the sector – expires in December, with no indication whether it will be extended.

“Our expectation is that the sector may retain some of it, but certainly not all of it,” Whelan said.

The 2023 boost, which followed years of sub-inflation funding increases, was designed to avert tertiary education job cuts pending a comprehensive review. But the National Party-led government cancelled the review soon after taking office, and instead established a “university advisory group” process chaired by former chief science adviser Peter Gluckman.

That group was due to complete its work in February, but is now expected to deliver its final report to the government in April.

john.ross@timeshighereducation.com