No age limit on first-year-free policy

New Zealanders both old and young who have done less than six months of tertiary education will have a year of free education from next year.

The long-awaited details of the Government's first-year-free tertiary policy were announced in Porirua yesterday, with Education Minister Chris Hipkins estimating 80,000 people would be eligible.

That split would likely be 30,000 students at university and 50,000 at private institutions, polytechnics, and apprenticeships and industry training.

There is no age restriction, with the Government paying for the first year of study up to $12,000.

“It’s great news for young people who are finishing school and adults who have in the past been put off because of the cost, and it provides a genuine incentive to keep learning. This government is passionate about life-long learning," Hipkins said.

“Employers have also been calling for bold forward thinking to build a future workforce with new skills to meet changing demands. That’s what this policy will deliver."

The Government has budgeted for a three percent increase in students, or about an additional 2000 students, and has allocated $380 million in the current financial year for the scheme and the already-announced rise in student loans and allowances.

Before the announcement the tertiary sector had been waiting to hear the details of the policy, with the 2018 academic year drawing closer.

They will now face a hectic summer holiday period, as will the Tertiary Education Commission, as the small details are ironed out.

Inland Revenue staff will also be hard at work, keen to avoid any hiccups in the system.

Dr Rod Carr, vice chancellor of Canterbury University, told Newsroom last month there had already been a spike in enrolments for next year.

If student numbers do dramatically increase, especially with the policy due to extend to three years by 2024, questions will likely arise about how tertiary institutions are funded and whether that funding needs to be increased.

Carr said that once the Government was paying tuition on behalf of almost all domestic students, institutions would face incentives to cap and reduce that cost.

New Zealand had one of the highest rates of money going through students to the institutions rather than directly as funding to institutions, he said.

"It is the case that money follows the students and as student interest ebbs and flows that can have adverse impacts on capacity."

Universities New Zealand chief executive Chris Whelan said the Government had indicated no university would be short-changed in the first year, but agreed there were longer-term concerns.

“The average fee is about $6000 a year ... but we’re absolutely nervous in future years that the Government could start shaving off that.”

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