Rest in Peace, First Year Free

Source: Unseen Studio on Unsplash.  

As recently as 2017, the initial intention was to extend fees-free into 3 years’ worth of education. But now, the current system will be replaced with a final-year fees free plan, following years of students ‘trying’ university and enjoying a first year, without the costs.  

According to Labour Leader Chris Hipkins, first year free was introduced to improve “affordability and access to tertiary education” for New Zealanders from a range of different background and education environments.  

The initial promise for the scheme was to extend the funding into two years, and finally three by 2024, made by the Labour Government in 2017, a promise which was opposed by National. However, Covid-19 saw large budget strains, with the government at the time shifting its’ priorities.  

Unfortunately, as many might be hoping, the change does not mean you can access your first and final year free if you’ve yet to finish university – the government is sadly not that generous.  

According to reports from The New Zealand Herald, the number of students from decile 9 and 10 schools, in university reached its peak in 2021. This neglected the initial desires of the fees-free scheme that were implemented to provide more accessibility for tertiary education for everyone.  

However, with a lack of growth in domestic student enrolments from 2022 to 2023, dropping 0.2%, is it fair to say less people are finding study accessible or affordable?  

Whether you should be worried obviously varies from person to person, however, it should be considered that many students planning on starting study in 2025 will now have to fund this themselves via a student loan, or other form of upfront payment.  

Not only are the changes proposed to the fee’s free schemes, but National have also elected to change the amount of interest on a student loan.  

Student loans remain interest free for any students remaining in New Zealand, however, with inflation - the government has reconsidered the growth of interest rates. According to the Ministry of Education, the interest rates on students overseas will increase by 1% from the 1st of April next year, making the new annual rate 4.9%.  

This interest rate will commence if you are outside of New Zealand for six months or more. The National Party are making plans to encourage more sustenance in the health sector by paying loans of nurses of up to $4500 a year for the first five years of their careers, provided they remain in New Zealand for this period.  

It’s all daunting, considering the rising cost of living and the rise in your loans. Is purchasing property even a possibility? If you leave university with a $60,000 loan and you want this gone in maybe 5 years, you’d be paying about $230 weekly to pay off that loan.  

In 2023, TradeMe jobs revealed the average salary of New Zealand was $70,000. Is this doable? A lot of this burden feels carried by the younger generation, those who are paying a large amount for their education.  

It feels like these plans contribute to a larger divide of how differently two generations lived in their younger adult years. Will the economy be more grateful than the students with the large loans? A lot of the conversations regarding tertiary fees and loans are dominated by ‘more’ tax or money or quotes of how hard it is live as a young person right now - very justified, might I add. Certain opportunities or conversations are outside of the spaces that should provide relief to young adults, and it feels the vulnerability of students is far from the conversation of being addressed.  

To sum it up, what’s worth knowing?  

• Fees-free is shifting from first year of study, to your final year of study.  

• Student loan interest for overseas repayments is increasing and fees-free scheme is remaining for a single year, but from first year to your last year.  

• There are no current plans to re-introduce the 3 years’ worth of fees-free that was originally proposed by Labour in 2017.  

• According to the Tertiary Education Commission, there is no confirmation how much fees-free entitlement will involve, as it has involved up to $12,000 for the current system.