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Fees Free – Issue 14

Questions have been raised over the effectiveness of 1 year of free tertiary study but the issues around student finances remain. Is there a better solution?


Education and training have a key role to play in the COVID-19 recovery. It’s important that we are all encouraged to increase our knowledge and skills as we contribute to society.

Students have saved hundreds of millions of dollars in loan borrowing as a result of this Government’s first-year Fees Free policy.  

Around 30,000 fewer students per year are borrowing to pay tertiary fees last year, saving them around $200 million.

That’s a significant chunk off the cost New Zealanders face when embarking on post-school education and training, and it means that once they’ve finished they’re much better placed to get on with life without a huge debt burden weighing them down.

Around 50,000 students per year receive fees-free tertiary education and training, attending tertiary education institutions, private training establishments, and industry training organisations.

Fees Free has stabilised a decline of overall student and trainee enrolment numbers over the past few years. This policy affects students of all ages, and encourages life-long learning. When I started studying at Waikato University I was 33 years of age. I valued the opportunity to study during this stage of my life.

Also, The government recently announced a $380.6 million initiative to help keep apprentices in work. This apprenticeship boost will support up to 36,000 apprentices per year (including new apprentices), by providing a subsidy to around 18,000 employers.

Apprenticeships are a key part of our skills pipeline. They create highly skilled practitioners within a particular industry and provide good long-term employment outcomes for the apprentice, often in skill shortage areas, such as electricians.

It is therefore essential to ensure that the jobs of existing apprentices are secure and that new apprentices continue to start training throughout the recovery from COVID-19.


The Government’s current flagship education policy of first year fees-free education has completely failed at its objective to increase uptake in tertiary education. The policy is representative of Labour’s failed policies like Kiwibuild and Auckland Light Rail. The policy is not means tested like the student allowance, not sector targeted and does not provide additional access to tertiary education.

We have also heard nothing from Labour regarding extending fees-free to the second and third year. Second year fees-free is supposed to be implemented should Labour win re-election but so far there have been zero announcements and no confirmation whether this policy will proceed.   

Tertiary education will be an important factor of our post-COVID recovery. Many will seek to re-skill to find employment in growth sector such as Agriculture and Construction. It is important that support is given to people wishing to re-skill and train in skill-shortage sectors. Additionally, now is not the time to be wastefully spending in areas that have little benefit. We are predicted to borrow tens of billions of dollars over the next five years. Funding needs to be reprioritised to areas that will help New Zealanders head in the right direction and provide a strong future for future generations.

Should we win Government, we will re-consider fees-free and will look at an alternative system that is fairer and more cost effective. In our Education Discussion Document released last year we have floated possible alternatives to fees-free. These include boosting living costs assistance, providing student loan write offs or changing repayment rates.

We will also look at programmes such as an education savings scheme similar to Kiwisaver, which can be used to pay for tertiary education and training. The scheme would build funds over a child’s lifetime and could have contributions from the state, parents and business. It is important that we investigate innovative student assistance schemes that are effective and provides improved access to tertiary education. The status quo is not feasible and requires reconsideration.

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