The Government says its decision to scrap the fees-free tertiary education scheme was driven by its failure to boost enrolments, poor uptake among disadvantaged students, and ongoing fiscal pressure.
The policy, introduced by the previous Labour Government, currently covered the final year of tertiary study for eligible students.
From next year, that support will be removed for new cohorts, though students already in their final year will still receive it.
New Zealand First leader Winston Peters said on Friday the fees-free scheme would be scrapped in the upcoming Budget, a move later confirmed by Finance Minister Nicola Willis.
Speaking to BNZ Business Breakfast on Monday, Willis said the policy had not met its primary objective of increasing participation in tertiary education and had fallen short in reaching those it was designed to help most.
"We are a country that's been in deficit since 2019. We're carrying a heck of a lot of debt, so we've got to make sure every dollar we are spending is going to its best use."
She rejected suggestions there had been tension within the coalition after Peters "Budget leak", saying the parties were aligned on the decision.
“We’ve come to an agreement as a coalition government, and this is a good result for New Zealanders both now and in the longer term,” she said.
Deputy Prime Minister David Seymour, appearing on Breakfast in lieu of Prime Minister Christopher Luxon after his decision not to continue with his regular Monday slot, said the policy had not delivered meaningful results despite its high cost.
"This policy, while a great benefit to people who get that money, is not actually increasing the number of disadvantaged students who are attending school."
Seymour said the Government had chosen a cutoff point that would allow current final-year students to benefit, but acknowledged others would miss out.
"I know that there will be people out there who say, 'well, look, that's unfair, I wanted that money I don't want to add to my student loan'. I understand all of that, but we have to look at the bigger picture here. The Government is under real pressure financially."
Student and youth advocate Nate Wilbourne told Breakfast that education was an investment in the "future nurses, doctors, tradies, teachers, electricians, midwives".
Wilbourne argued the policy helped reduce financial barriers and encouraged participation, particularly among students from lower-income backgrounds.
He also pointed to rising youth unemployment and increasing numbers of young New Zealanders moving overseas as reasons to maintain support.
"If we want young people to stay in this country, we need to feel supported by this Government."
The morning's headlines in 90 seconds, including plans to get passengers home from a virus stricken cruise, and the rationale for ditching fees free uni. (Source: 1News)
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