Key Takeaways
- The fees‑free tertiary scheme, introduced by the Labour‑led Government in 2018, originally covered up to $12,000 of tuition for the first year of provider‑based study (or the first two years of work‑based learning).
- In 2021 the coalition Government shifted the benefit to the final year of tertiary study, and in 2019 redirected $197 million of unspent funds elsewhere.
- Finance Minister Nicola Willis has confirmed Winston Peters’ claim that the 2024 cohort will be the last group eligible for fees‑free tuition, signalling the scheme’s imminent demise.
- Herald data shows a sharp decline in uptake among disadvantaged students: only 1.3 % of university fees‑free recipients in 2024 came from EQI 7 schools (230 students), while EQI 6 schools contributed 775 students—the lowest figures in the scheme’s six‑year history.
- The coalition, comprising Willis, Prime Minister Christopher Luxon and NZ First leader Winston Peters, is preparing to scrap the fees‑free policy altogether, arguing that the money can be “repurposed” for trades and other industries with a better financial return.
- Political reporter Julia Gabel, who conducted the Herald’s Official Information Act analysis, highlights the widening equity gap as a key concern amid the policy’s reversal.
- Officials have indicated further details will be released “in due course,” leaving students and institutions awaiting clarification on transitional arrangements.
Background of the Fees‑Free Scheme
The fees‑free tertiary education policy was a flagship promise of the Labour‑led Government during the 2017 election campaign. Enacted as part of the then‑Prime Minister Jacinda Ardern’s first 100‑day plan in 2018, the scheme covered up to $12,000 of tuition costs for the first year of provider‑based study or, alternatively, the first two years of work‑based learning. Its primary aim was to reduce financial barriers to post‑school education, especially for learners from low‑income backgrounds, and to encourage higher participation in tertiary study nationwide.
Policy Shift Under the Coalition Government
In 2021, the coalition Government—formed by the National Party, ACT, and NZ First—altered the scope of the fees‑free benefit. Instead of supporting the initial year of study, the subsidy was redirected to cover the final year of tertiary education. Officials argued that this change would better assist students nearing completion and improve retention rates. Simultaneously, in 2019, $197 million of allocated fees‑free funding that had gone unused because of lower‑than‑expected uptake was re‑allocated to other government priorities, a move that sparked debate about the scheme’s efficiency.
Financial Rationale for Repurposing Funds
Finance Minister Nicola Willis has echoed Winston Peters’ assertion that the fees‑free scheme will no longer be available for new entrants after the 2024 cohort. Willis stated that the government intends to “reshape and repurpose it for the trades and all sorts of industries where we do need it and where we can get a far better payback for our money and pay far less money doing it.” This commentary reflects the coalition’s broader fiscal strategy of reallocating education spending toward vocational training and sectors deemed to have higher immediate economic returns.
Declining Uptake Among Disadvantaged Students
A Herald analysis released in January 2025 examined fees‑free participation from 2018 to 2024, focusing on the relationship between scheme uptake and students’ socio‑economic circumstances. The data revealed a stark decline in the involvement of disadvantaged learners. In 2024, only 1.3 % of university students receiving fees‑free support came from EQI 7 schools—those serving the most disadvantaged communities—equating to just 230 individuals. Meanwhile, EQI 6 schools, representing the next‑most disadvantaged group, contributed 775 students. Both figures represent the lowest recorded numbers since the scheme’s inception.
Socio‑Economic Implications of the Data
The EQI (Equity Index) ranking system used by the Ministry of Education categorises schools based on the socioeconomic challenges faced by their student populations. The precipitous drop in fees‑free uptake from EQI 6 and EQI 7 schools suggests that the policy is failing to reach those who stand to benefit most from tuition relief. Critics argue that the shift to funding the final year of study disproportionately aids students who have already overcome initial financial hurdles, thereby exacerbating inequities in tertiary access. The Herald’s findings underscore concerns that the policy’s original equity objectives are being eroded.
Political Reactions and Statements
Prime Minister Christopher Luxon has yet to issue a detailed public comment on the fees‑free reversal, but his alignment with the coalition’s fiscal agenda signals broad support for the proposed changes. Winston Peters, leader of NZ First, has been vocal about the need to redirect funds toward trades, arguing that New First’s constituents would benefit more from targeted vocational subsidies than from broad tuition waivers. Finance Minister Nicola Willis, while confirming the accuracy of Peters’ statement about the 2024 cohort being the last eligible group, indicated that further specifics would be communicated “in due course,” leaving stakeholders awaiting clarification on transitional measures and any potential grandfathering provisions.
Future Outlook and What Comes Next
As the coalition prepares to dismantle the fees‑free university scheme, the tertiary sector faces a period of uncertainty. Institutions may need to adjust budgeting models, anticipate shifts in enrolment patterns, and consider alternative support mechanisms for vulnerable students. The government’s promised reinvestment in trades and industry‑focused training could yield new apprenticeship pathways, but the success of such initiatives will depend on effective implementation, adequate funding, and mechanisms to ensure equitable access. Meanwhile, advocacy groups and student organisations are likely to intensify calls for a reinstated or revised fees‑free model that better addresses socioeconomic disparities.
Conclusion
The fees‑free tertiary education policy, once heralded as a transformative step toward inclusive higher learning, is now poised for discontinuation under the current coalition government. Financial rationales emphasise reallocating resources toward trades and sectors perceived to deliver higher economic returns, yet recent data reveals a troubling decline in participation among the most disadvantaged learners. The coming months will reveal how the government balances fiscal efficiency with the imperative of maintaining accessible, equitable education pathways for all New Zealanders.