Opinion // 21.03.2017 // Curated by Ed.

Yeah, Nah, Maybe: An overview of Commission’s vision for tertiary education in NZ

In 2015, the Government asked the Productivity Commission to look into new models of tertiary education.  Now, they have released a report which sets out their findings and recommendations for change.

It’s a bit of a mixed bag – there’s some stuff we think will be fantastic for students, some of it not so much and more we’re not sure of either way.  There’s also a noticeable whiff of neo-liberal ideological underpinnings.  Overall, though, it’s pretty good.  Looking back on our submission which was informed by surveys of students and parents, a lot of the Commission’s recommendations line up with what we told them.

We will be running a series of articles over the next couple of weeks.  They’ll look at some of the recommendations in detail and what they could mean for learners.  In the meantime, here’s a breakdown of some of the significant recommendations and what Ed thinks about them.


  1. Make it easier for students to move institutions

The inquiry backs up what students have told us. Students shouldn’t be penalised if they change institutions.  The Commission has made a number of recommendations that will help make this a reality.  That’s a win.

  1. Move away from funding course length to funding credit value

At the moment, courses have to last a particular length of time to attract the right level of funding.  The reality is that students these days are more time-poor. They have to deal with more challenges than previous generations, just to survive.  Time is of the essence.  Any step that encourages efficiency without compromising quality (which is what the Commission is proposing) has to be a good thing.

  1. Encourage recognition of prior learning

We’re told that more people will need to retrain as some careers become obsolete.  That’s fine, but people with professional experience should be able to be accredited for their knowledge and skills gained in the workplace.  They shouldn’t have to spend time studying a subject they already know really well.  The Commission has recommended that institutions be incentivised to do more of this.

  1. Make student loans and allowances more accessible

Right now, you can only get a student loan for a subset of tertiary courses available – those that are NZQA approved and funded by the Tertiary Education Commission.  The Productivity Commission has recommended removing the second of those two requirements and make NZQA approval the only condition.  This would open up a number of additional possibilities for students.  It would make it easier for new providers to make their courses more accessible.

The Commission also wants to extend funding to people who aren’t studying full qualifications and remove limitations around shorter qualifications.  That’s good.

  1. More (and better) information and advice for students

The Commission believes that the system should ensure students are more informed when making study and career choices.  This includes having better information on the performance of organisations, career prospects and strengthening career guidance from a younger age.  Couldn’t agree more.

  1. Reward tertiary institutions for great teaching

Right now, the system doesn’t do much to recognise great tertiary teachers – neither in terms of salary scales nor in terms of professional progression or status.  Research is seen as much more important.  Of course, it is important.  But so is teaching – every bit as much as research.  More needs to be done to recognise that to encourage great teachers to keep doing what they do so well.


  1. Charging interest on students loans

They seem realistic that this isn’t going to fly politically and so they have proposed an alternative which is to adjust loan balances for inflation based on the Consumer Price Index.  Between January 2016 to January 2017 this was around 1.3%.  So, a $20k loan balance would go up by $260.  That’s not a huge amount in the scheme of things, but there is the worry that this would be the thin end of the wedge – a way of softening everyone up for the reintroduction of interest.

Current students are battling through genuine hardship to try and complete their studies. For the 60% or so who finish, a huge number are leaving burdened with debt as large as their parent’s first mortgage and heading out into the workforce only to be confronted by the housing crisis.

The Commission makes a valiant argument for the reintroduction of interest and these people are smart – there is a logic to it.  If the fees were a fraction of what they are, the learning was more easily structured around work, the cost of living wasn’t as astronomical as it is and we didn’t have students sleeping in cars and forced to do God-knows-what to get by – then maybe.  Until then, it’s a nah.

  1. Let Institutes of Technology and Polytechnics open wherever they want

Not great.  These state-funded and Crown-owned organisations need to focus on educating their own students first and foremost before running off and becoming preoccupied with bigger markets (read: Auckland).  The idea of taxpayers funding all these institutions to go into competition with each other, throwing truckloads of money at new campuses and marketing in areas which are already served by their peers?  We would have everyone from Southland to Kaitaia opening campuses on and around Queen Street (it’s already happened a bit, actually).  Come on.  This would run completely contrary to the intent of the funding reforms of 2008.

  1. Give tertiary institutions full ownership of their buildings and land and allow them to dispose of them how they like

Actually, the reverse should probably happen.  Billions of dollars of buildings are owned by the public. This should probably be reinforced in the minds of tertiary institutions, rather than diminished. We should be insisting that we get more than 22 weeks of full teaching per year out of some of these institutions and that the buildings and campuses are used more to the benefit of their communities when not in use for teaching.

Institutions need to be reminded of the public investment in ‘their’ assets – not permitted to forget it.

  1. Relax or reconfigure what fees institutions can charge

This is a bit tricky.  At the moment, institutions are allowed to increase fees by a maximum set by Government (e.g. 4%).  The Commission is proposing that fee shifts are regulated by field of study (subject area) and level (first-year uni, second-year uni, etc.) – the idea being that for those areas where the competition is greater, as is cost and personal return (e.g. medicine), institutions are given more flexibility around what price they charge.  It would mark a return to a fees control approach we used to have, and it does make a certain kind of sense.

The Commission believes that if fees were deregulated and institutions were given more latitude on what they charge, it would mean institutions could experiment with two broad classes of new models:

  • Higher delivery cost, higher fee courses; and

  • Lower delivery cost, lower fee courses.

The first option might include access to a super-computer, big data, etc. for a data mining course.  The second (they say somewhat optimistically) might include courses where the majority of the content is delivered online.

They don’t mention a third option, which is of course: lower delivery cost, higher fee courses.  Universities are delivering some courses wholly online right now but charging the same amount as courses delivered on campus.

Basically, we get the argument and in a perfect world with institutions looking out for the learners’ interests it would probably be ok.  But we don’t live in a perfect world, do we?

We are more inclined to agree with NZUSA’s position on this – the historical behaviour of the institutions to date tells us everything we need to know about their likely future behaviour if they weren’t constrained.  They would charge as much as they could get away with – free market rules.  A perverse consequence of this is that price becomes a proxy for perceived quality.  The Commission also note in their analysis that in other jurisdictions, institutions who charge below the maximum suffer from poor enrolments because of a perceived lack of quality.  Their response?  Raise their fees.

Combine this with the proposal to charge interest on the loans?  No, thanks.

  1. Different people, different fees

The Commission’s idea is to tie an institution’s ability to charge more to meeting “community service obligations”.  That is, they can charge more fees as long as they put some of that ‘extra’ into subsidising the fees of lower socio-economic students.

Practically speaking, “lower socio-economic backgrounds” is code for Māori and Pacific students – in the main.  Picture this: the majority of Pākeha students pay $12,000 for a year’s worth of study.  Meanwhile, the majority of Māori and Pacific students pay $9,000 for a year’s worth of study.  Or whatever.  In a society where the odd scholarship aimed at Māori and Pacific students is used to justify racist attitudes, imagine what this would do.  And let’s be clear here: they wouldn’t be giving any extra money to these students – it’s still all going into the institution’s bank account.


  1. Raise the loan repayment threshold to at least the equivalent of the full-time adult minimum wage

Sounds good, right?  It would mean repayments would start over when students start earning more than $32k, rather than $19k as it is now.  It would have the effect of putting nearly $30 back into the pocket of minimum wage earners with a student loan.  That’s fantastic.

However, if this is coupled with making loans interest-bearing, it will just mean student loan debt will continue to balloon.  The less students earn on graduation, the deeper into debt they will get.

Put another way, the greater degree of failure of the system to get people into good careers, the more the student would have to pay.

So, assuming no interest is charged, this is a yeah.  With interest, it’s a nah.  So we’ve landed on maybe.

The Productivity Commission can probably look at their report and say, overall, it’s a job well done.  There’s something in it to alternately offend and delight everybody.  We’ll look at each of these recommendations in more detail in the weeks ahead and keep an eye on what’s happening.