We've been hearing a lot recently from student representatives that funding tertiary education is the responsibility of the government, not of students or their parents.

But if New Zealand is to enjoy quality tertiary education, a mix of private and public spending is a better option than taxpayers footing the whole bill.

A fully taxpayer funded system is simply not good public policy. Asking students to pay – either now or later through the repayment of student loans – is fair, especially considering that a large proportion of the benefits of tertiary education go to the students.

One recent estimate suggests that, over a lifetime, an employed male degree holder could expect to earn $140,000 more (in today's dollars) than a male with no qualification.

Taxpayers already currently pay around 70 percent of the cost of tuition. An increase in that share cannot be justified – especially given competing demands for scarce funding.

So called ‘market-based' policies are not confined to New Zealand, they are part of a growing OECD trend : between 1995 and 1999, for example, 10 countries reported an increase in private spending on tertiary education institutions of more than 30 percent.

The OECD has recommended that Ireland reverse its mid-1990s decision to abolish tertiary tuition fees. The German high court recently ruled that a federal ban on states charging tuition fees was unconstitutional.

Official figures out of Australia last week show student loans are expected to rise from $256 million this year to $825 million by 2009, as students rush to take advantage of Australia's new loan scheme.

Enrolments at 31 Australian private colleges and universities have risen 10 percent this year as the scheme has opened up more opportunities for choice for students about where they study.

Indeed, ‘opening up opportunities' is what these types of policies are all about.

At the start of the 1990s, New Zealand had nominal tertiary education tuition fees but participation was not high. After fees were introduced in 1990, deregulated from 1992 and progressively increased throughout that decade, students flocked to universities, polytechnics and a diverse range of private training providers.

The number of Equivalent Full Time Students nearly doubled in that time.

Research from the New Zealand University Students' Association – the very people who cry the loudest about the inequity of students having to pay for their own education – shows that, between 1997 and 2000, the proportion of students from low-income communities who went on to tertiary education rose from 18 percent to 26 percent and the proportion of students from decile one schools who went on to university rose 50 percent.

Maori have benefited enormously from the tertiary education reforms introduced since 1990 and have made considerable progress across a range of educational indicators.

The reality is that tuition fees are only one factor that students take into account when deciding whether to pursue a tertiary education, and the biggest barriers are not fees, but sociological factors such as family attitudes and aspirations and weak academic preparation at high school.

A recent UK report argues that, without increases in spending at pre-school level, efforts to widen university participation will have little impact.

It says more investment in quality early childhood education and care and then targeted school interventions to maintain those gains are needed to prevent disadvantaged children from being held back. Its recommendations are spot-on for this country, too.

Addressing such factors, along with a policy of flexible tuition fees and student loans, is the best route to closing the ‘opportunity gap' for disadvantaged groups and enabling all those who want to gain a valuable and high-quality degree, diploma or other tertiary qualification.

For more information, contact:

Norman LaRocque
Policy Advisor
Ph: 04 494 9102
Email: nlarocque@nzbr.org.nz

Web: www.nzbr.org.nz