Free study for first-year tertiary students has been scrapped, Tertiary Education Minister Penny Simmonds has announced, with fees-free instead shifted to the final year.
The first-year scheme will close to new entrants at the end of the year.
"Learners entering their final year of study from January 2025 will be eligible, and payment will be made following completion of their study programme," according to the Government.
The first payments under the new system will be made to learners after January 1, 2026.
The Tertiary Education Minister said funding the final year of study would result in better educational outcomes while also saving money.
The change to the programme will free up $877 million over four years. The Budget announcement also helps fulfil a New Zealand First coalition commitment.
"Every education dollar must be applied to its maximum value," Simmonds said.
"The first-year fees free policy was an expensive failure and did not deliver its aim of more students going into tertiary education, nor did it increase participation rates."
Officials confirmed to 1News there would be no double dipping, with the final year scheme ineligible for students who have already benefitted from first-year fees-free.
Simmonds said: "We’re changing the fees free scheme from the first year to the last year of study, which is a much better way to incentivise students to complete their studies.
“We’re rewarding hard work and success and delivering on our coalition agreement commitment with New Zealand First."
Fees-free study during a student's first year was introduced under the previous Labour government. Introduced in 2018, the first-year scheme was originally intended to be expanded to cover additional years - which ultimately did not eventuate.
The existing programme covers fees of up to $12,000 for first-time learners in their first year of provider-based study or their first two years of work-based training.
National criticised the scheme since its introduction but did not specifically campaign on getting rid of it. Coalition partners ACT and New Zealand First both pledged to scrap it.
This year's Budget also provides a small boost for tertiary and training institutions.
A total of $266 million of additional funding will be provided over the next four years to increase the tuition subsidies paid to tertiary education and training providers by 2.5%.
Universities are estimated to receive approximately $136 million in additional funding over four years with actual amounts dependent on "the Tertiary Education Commission’s investment decisions and providers' actual delivery volumes."
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