Students to pay 25% of course

January 20, 1995

The New Zealand government has cut subsidies to university students which it says will mean tuition fees rise by an average NZ$400 (Pounds 170) per student over the next five years. But critics are predicting massive rises to come.

Lockwood Smith, the education minister, announced last week that the National Party government was adopting the controversial Todd taskforce recommendation to increase student contributions progressively to 25 per cent of course costs. Students now pay an average 20 per cent.

But the government is to increase its total tuition subsidy by $63 million to provide an additional 16,700 equivalent full-time places in higher education.

The cut in the per-student subsidy, to be phased in from next year, will take the average student fee to $2,500 in 1999. However, increases for individual students -- who already face higher fees this year because of a 1 per cent cut announced last year -- could be much higher, given that some universities set differential fees based on course costs and the "study right" policy under which institutions get a higher government subsidy for school leavers.

Dr Smith rejected the more radical Todd taskforce recommendation of a 50 per cent student contribution to course costs.

University administrators took some satisfaction from the greater certainty over funding. But they said the latest cuts come on top of other unexpected costs announced late last year, such as increased accident compensation levies, employer superannuation contributions and earthquake insurance, on top of inflation.

Chris Dearden, deputy vice chancellor of the Victoria University of Wellington, said if New Zealand was to remain competitive in an international market fees needed to be revised.

Albert Brownlie, vice chancellor of Canterbury University, said anecdotal evidence indicated any increase above the 20 per cent threshold could affect enrolments.

Students were angered by the announcement and by its timing -- the middle of the summer vacation, and there were protests at the education ministry building and at the governing National Party headquarters.

The University Students' Association estimates that completing a first degree, including accommodation, living costs, and fees, will be about $40,000. "Many potential students will not take the risk of accumulating that debt," he said.

Universities are also feeling the effects of a pay freeze in effect since 1990. Bill Rosenberg, acting president of the Association of University Staff, said: "We cannot have a zero salary increase for the next five years." To cover rising costs, universities might have to increase fees further, cut back on courses or increase class sizes.

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