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Government spending on tertiary education has increased as a proportion of GDP

Government spending on tertiary education (excluding spending on student support) represented 1.3 percent of the country’s GDP in the 1999/2000 financial year. This is estimated to have increased to 1.6 percent of GDP in 2002/03. When the capital spending on student loans is added in, government spending on tertiary education reaches 2.0 percent of GDP in 2002/03 compared with 1.7 percent in 1999/2000.

In 2002/03, the government’s total budget for tertiary education was $3,562 million. This represented an 8.1 percent increase on the 2001/02 actual spending of $3,296 million. The major items in the government’s tertiary education spending were:

• $1,718 million for tuition subsidies to fund student places at TEOs
• $952 million for student loans
• $405 million for student allowances
• $190 million for specific purposes, including funding of industry training and programmes such as Youth Training, Modern Apprenticeships, Gateway, and Skill Enhancement.

Figure 27: Government funding of tertiary education, 2002/03

Increased costs to students have stabilised

From 1997 to 2000, average student fees in TEIs rose steadily. Average student fees stabilised in 2001 and declined slightly in 2002. Students attending universities pay the highest fees on average, followed closely by students at polytechnics. The lowest average fees were for students at wānanga. This is largely an effect of Te Wānanga o Aotearoa providing a selection of zero fee courses which have had very large take-up.

Figure 28: Average tuition fees per Equivalent Full-time Student, 1997–2002

Note: Domestic student fees charged by TEIs, in nominal terms, inclusive of GST.

Affordability to students can also be looked at in terms of the amount that students need to borrow under the Student Loan Scheme to cover the costs of their tertiary education. Average borrowings almost doubled from 1992 to 2000, partially reflecting the increase in student fees. The dip in 1999 was due to policies restricting amounts of borrowing, which were revoked the following year. From 2000 on, average borrowing has not increased as fast, reflecting more stable fees.

Figure 29: Average amount borrowed annually under the Student Loan Scheme, 1992–2002

Source: StudyLink, Ministry of Social Development and Ministry of Education

Average loan balances provide an indicator of the affordability to students of their total engagement with tertiary education, adjusted by their ability to repay debt. Average loan balances have followed a similar pattern to fees and annual borrowing. Recent changes to loan repayment requirements have also contributed to stabilising average balances.

Figure 30: Average student loan balance held by Inland Revenue, June 1994–2002

Source: Inland Revenue Department

The government provides a range of support targeted to students who are not in a position to meet the costs of tertiary education. The main form of support is student allowances, which were provided to 68,486 students in 2002. The average annual student allowance, including accommodation benefit, was $5,830 in 2002. Allowances are targeted to students from low income families. The Ministry of Social Development provided Training Incentive Allowances (TIA) to 22,587 beneficiaries in 2001 to assist with the costs of tertiary study. The average TIA was $1,700. There is also a range of scholarships available from government, TEOs and other organisations with an interest in tertiary education.

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• Table of Contents

• The Baseline Picture

• Cross Strategy Indicators

• Raise foundation skills

• Skills for our knowledge society

• Strengthen research and knowledge creation

• Te rautaki mātauranga Māori

• Pacific people’s development and success

• Capability and quality

• Technical and Data Definitions