Government reviews fees-free first-year scheme after $1.25 billion spent on universities
The fees-free first-year program cost universities $1.25 billion over seven years, and officials say it failed to boost participation or equity.
A briefing to the tertiary education minister revealed that the first-year fees-free programme disbursed $1.25 billion to universities, $440 million to polytechnics, $333 million to private training establishments, $28 million to industry training organisations and $3 million to wānanga from 2018 to 2025, supporting 307,185 learners. The minister said the policy lowered student debt but did not significantly raise overall participation or address equity goals, deeming the return insufficient.
Green MP Francisco Hernandez highlighted a roughly 20 percent increase in Māori enrolment and argued the scheme’s benefits justified its continuation. Labour’s Shanan Halbert blamed the National government for the loss of over $1 billion to young people and for a 19 percent fee rise, while noting that not all saved funds have been reinvested in the sector. The scheme is set to end at the close of 2026, with limited transitional provisions for students completing qualifications before then.
Why it matters
It shows how a major education subsidy is being reassessed amid debate over its cost-effectiveness and impact on equity.
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