Lean times continue for universities and students

For the second year running, New Zealand’s government has frozen subsidies for public tertiary institutions and found new ways to restrict spending on student loans and allowances. It has also threatened to arrest students seriously in default if they enter or leave the country.

Vice-chancellors looked on the bright side of the budget delivered on Thursday, hailing the increases it included for research funding.

But the Tertiary Education Union, which represents staff at universities, polytechnics and wananga – Maori tertiary institutions – says cutbacks are inevitable.

The freeze on subsidies is not universal.

The government will spend NZ$56 million (US$46 million) over the next four years on increases in the rates paid for enrolments in engineering and science, and for private tertiary institutions that for many years have been paid less than public institutions.

But the rates paid for the vast majority of enrolments in tertiary education have not been increased since the 2011 budget. The national secretary of the union, Sharn Riggs, said public tertiary institutions would have to make cuts.

"There's no other answer to it...They have a finite number of resources and if that money is not being increased to at least the very level of inflation, then things have to be cut," she said, adding that the government should not increase private institutions’ funding rates when public institutions were struggling.

Pat Walsh, chair of Universities New Zealand (UNZ), the peak body for the eight universities and their vice-chancellors, said the organisation was concerned that funding rates had remained flat. But Walsh welcomed increases in research funding worth NZ$200 million over the next four years – much of which will find its way to universities.

“Universities deliver world-class research, science and technology, and our contribution is integral to the country’s economic and social development,” he said. “The government’s investment in science will help us to add value to our contribution.”

The budget also featured new restrictions on student loans and allowances, while people aged 65 and over will lose all access to allowances and those 40 and over will have a lifetime limit on their access to allowances reduced from 200 weeks to 120 weeks.

Permanent residents and Australians living in New Zealand will have to wait three years before they are eligible for loans or allowances, up from two years.

The budget also raised the issue of payments required from student-loan borrowers who are living overseas, and announced that those seriously in default would be arrested if they tried to enter or leave the country.

The government has urged tertiary institutions to enrol more international students, and hopes to double income from that source by 2025. The budget includes an extra NZ$10 million a year to help attract more foreign students.