New Zealand’s free university scheme fails to reduce inequality

New Zealand’s flirtation with free study has failed to make higher education any more inclusive, with people from the wealthiest neighbourhoods still up to seven times as likely to start degrees as their poorer counterparts.

Data from the first four years of the Labour government’s signature fees-free programme show that inequities in university commencements have not shifted at all, with admission rates firmly anchored to socio-economic status.

The figures, released by the Tertiary Education Commission following information requests from The New Zealand Herald, substantiate a key criticism of free tuition: that the wealthy benefit disproportionately because they are more likely to attend university.

The data suggest that for every dollar spent to waive the fees of students from the poorer half of the community, almost four dollars were expended on the richer half.

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Meanwhile, a government analysis offers no evidence that fees-free has had any significant impact on study loads or course completions, and it says a 2021 increase in tertiary participation rates is probably attributable to economic factors associated with Covid-19.

There is no evidence of significant growth in university student numbers before 2021, and while the fees-free scheme also covers sub-degree qualifications, its impacts on training numbers are difficult to track because a separate free training programme was established in mid-2020 as a Covid emergency measure.

Introduced in 2018, fees-free covers a year’s tertiary study for those who have not undertaken significant post-school education in the past. Early in the pandemic, the government abandoned plans to extend the scheme to more years, having already redirected NZ$234 million (£122 million) from the fees-free budget because enrolment growth forecasts had proven over-optimistic.

Universities complained of stagnant finances, with fees-free eroding the government’s capacity to boost their funding, while students said inadequate income support was driving them into poverty.

Asked what tangible benefits fees-free had produced, the education minister, Jan Tinetti, said the main impact had been a reduction of about NZ$200 million a year in student borrowing. She did not say whether the government would support a continuation of the scheme beyond October’s election.

While the opposition National Party has previously pledged to abolish the scheme, its education spokeswoman, Penny Simmonds, is a free education advocate who established a localised zero-fees scheme when she was chief executive of the Southern Institute of Technology in Invercargill.

Former education bureaucrat Roger Smyth, a fees-free critic, said the scheme was a “failure” but suggested that neither party was likely to scrap it because of the political cost. “As far as I can see, it’s here to stay with its current parameters in the short term,” he said.

Mr Smyth said the economic returns from scrapping the policy would be muted anyway in the current period of high inflation. He said a substantial proportion of New Zealand student lending was never recovered because the debts are not indexed.

The New Zealand Union of Students’ Associations said it had originally supported the fees-free scheme but was likely to be “more hesitant” ahead of the coming election. “We don’t have a current policy position on it,” said president Ellen Dixon. “We’re focusing more on student debt and the cost-of-living crisis.”

Ms Dixon said the impacts of fees-free had been “muddied” by pandemic disruption. But she said tuition fees often contributed to students’ hardship even during their courses, because New Zealand’s unusually low repayment threshold of NZ$21,268 meant that some people were already paying off their loans before they graduated.

“There is definitely an argument for fees-free…but it is clear that the administration may need some rethinking concerning its impact on our vulnerable students,” Ms Dixon added.

john.ross@timeshighereducation.com