NZ First leader Winston Peters said the government’s fees-free scheme is set to be scrapped in the upcoming budget, a move that was later confirmed by Finance Minister Nicola Willis.
The decision was largely driven by the scheme’s failure to lift enrolments, its low take-up among disadvantaged students, and the continued pressure on government finances.
The policy, introduced by the previous Labour government, currently pays for the final year of tertiary study for eligible students. Starting next year, the support will no longer be available to new students, but those already in their final year will still be able to access it.
Willis said the policy hadn’t achieved its main goal of boosting tertiary education participation, and it had also failed to properly reach the students it was meant to support 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.”
Meanwhile, Deputy Prime Minister David Seymour said the policy had come at a high cost but had not delivered meaningful results.
“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 set a cutoff that lets current final-year students still benefit, while acknowledging that some 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.”