David Farrar: The failure of fees free

Fees free tertiary education a central policy for Jacinda Ardern and Chris Hipkins. They promised in 2017, that it would boost tertiary participation, especially for those from poorer families, who they said were put off by high fees.

The policy bombed almost straight away. We know this because Labour never implemented the full policy. They kept it at first year only, because even they worked out it was a hugely expensive policy that simply transferred money from all taxpayers to students from wealthy families (who would go on to earn $2 million more than those who didn’t get a degree).

So Labour changed it from all years free, to first year free. National wanted to abolish it but did a compromise with NZ First to make it final year free (which was slightly better). But as the Herald reports it was still such a failure, NZ First then agreed to scrap it entirely. And the policy is so discredited, that not even Chris Hipkins is vowing to reinstate it.

The Herald reports:

The number of disadvantaged students using the fees-free scheme for university in 2024 slumped to the lowest figure in the scheme’s short history.

That was the final year of the scheme in its original form, covering the first year of course fees, before the Coalition Government changed it to cover the final year of tertiary education study.

Thank you Chris Hipkins.

There were 26,490 such fees-free students in 2024, up slightly from a cohort of 25,535 in 2023.

But only 1.3% of the fees-free students at university in 2024 came from EQI 7 schools. In actual numbers, this translated to 230 fees-free university students in 2024 from EQI 7 schools, while there were 775 students from EQI 6 schools. Both of these are the lowest numbers on record for the scheme’s six-year history.

So Labour’s policy only helped 230 students from the poorest areas, at a cost of $300 million or so a year.

It was billed as opening the doors of tertiary education to those for whom they would normally be shut, and was expected to increase participation in first-year tertiary study by up to 15%.

Do I even need to tell you it didn’t. In fact off memory enrolments declined.

David Farrar runs Curia Market Research, a specialist opinion polling and research agency, and the popular Kiwiblog where this article was sourced. He previously worked in the Parliament for eight years, serving two National Party Prime Ministers and three Opposition Leaders