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The Productivity Commission’s report on New Models of Tertiary Education “has done a disservice to New Zealanders,” according to VUWSA President Rory Lenihan-Ikin.
Recommendations include introducing interest on student loans, abolishing University Entrance (UE), reducing subsidies for courses with high private returns, and deregulating funding.
The Minister for Tertiary Education, Paul Goldsmith, shut down the loan recommendation and stated “the government is committed to retaining interest-free student loans for borrowers residing in New Zealand.”
The recommendation to abolish UE suggests that tertiary providers should set their own entry standards. The report concludes that UE performs “no useful function.”
Chris Whelan, Executive Director for Universities New Zealand, labelled the recommendation “not sensible,” stating “the reason we have so few young people failing at university is because UE sends a good signal that they are academically ready for university-level study.”
He also expressed concern that students could receive less valuable qualifications. “Where this has been done elsewhere you get for-profit providers setting up shop offering low quality degree programmes that leave students with large debts and qualifications that employers don’t value.”
Fletcher Boswell, an Education Officer for VUWLSS, said removing UE could add pressure to an already saturated market — “there are currently around 1000 students enrolled in 100 level law, with only around 300 spots in [200 level law]. Removing UE would make it even more competitive at 100 level.”
The report recommends that the government reduce or remove subsidies for studies with high private returns, targeting subjects such as Law which tend to produce higher-paying private sector careers.
Boswell described the recommendation as “ridiculous.”
“From a fiscal point of view, if you’re trying to cut costs, why not target a progressive tax rate — only half of law graduates actually become lawyers [in private practice], so you’re playing a massive guessing game.”
Lenihan-Ikin said the recommendation “fails to acknowledge the overall benefit of having people participate in tertiary education.”
“It is not appropriate to consider some qualifications inherently mean a better salary once that person finds a job. That assumption could deter students from looking for community-focused jobs […] because their degree has been identified as a having a high private benefit, and therefore has reduced subsidies and a greater pressure to have an income that can pay back their loan.”
Whelan pointed to this as a “major departure” from Government policy since 1990. “Regardless of how high the potential private benefit, these graduates will still pay taxes and contribute to society in a range of ways.”
The report also makes a number of suggestions to deregulate funding, stating that “fee regulation significantly constrains innovation, [because] it limits the ability of providers to create new products with different price/quality trade-offs and to signal these differences to students.”
Whelan argues, “the reality is that our funding levels are too low to attract high quality international providers or to produce the innovative new forms of teaching that are appearing in other parts of the world.”
“All of the universities identified by the Productivity Commission as demonstrating ‘international best practice,’ are funded at rates at least three times that of New Zealand providers.”
Lenihan-Ikin reflected that the report, as a whole, was unsatisfactory. “Access to education is a fundamental human right at all levels and tertiary study should not be set aside for those who can ‘afford it’ because of their privileged backgrounds.”