1493786370214 - Student fee hikes and the lowdown on Trans-Tasman tertiary education

Student fee hikes and the lowdown on Trans-Tasman tertiary education

A proposal by the Australian government to charge New Zealanders studying at tertiary level the full-fee international rate has been met with howls of disapproval.

A few thousand Australians study at New Zealand universities.

On the other side of the Tasman, more than 12,000 New Zealanders study in Australia and many of them, under ‘Australia First’ changes to the system, face massive hikes in tertiary fees.

* PM annoyed with one-sided Aussie policy
* Kiwi students in Australia want to fight proposed fee changes

Australian citizens, or permanent residents of Australia living in New Zealand, are treated as domestic enrolments for funding purposes – not as international students.

That’s historically been the case in Australia too, where Kiwis are classed alongside domestic students.

But, ‘Australia First’ rhetoric and policies have been ramping up under Australian Prime Minister Malcolm Turnbull’s government.

What’s the go?

Under longstanding Trans-Tasman arrangements, Australian and New Zealand citizens can study in each other’s country and pay domestic tuition fees.

Under the proposal, New Zealanders would have to pay the full rate to study at Australian universities – around three times what they have to pay now as subsidised students, taking average annual fees from around $7000 to more than $30,000.

The approximately 8000 Kiwi students who are already enrolled will not have their fees raised, and some students would gain access to student loans – but Kiwis all over the country said this was nowhere near enough.

Here, Australians have to be resident in New Zealand for three years to be eligible for student allowances and loans. Over there, only long-term resident Kiwis can access loans.

What happened to the bromance?

Prime Minister Bill English isn’t happy and Gerry Brownlee will head to Australia to “convey the Government’s unhappiness”.

Yes, that’s right. Brownlee’s first job is to “convey unhappiness”.

And, it seems there’s quite a lot of unhappiness.

Labour said the proposal, which followed recent volatility around citizenship laws, and debates over deportees, showed English could not maintain the ‘bromance’ John Key established with Aussie PM Malcolm Turnbull.

How many students are we talking about?

Figures are tricky, because in some cases all fee-paying student numbers include primary and secondary school students.

The detail is a little fuzzy too, but the Australian proposal refers to post-secondary school students.

Some reliable numbers are out there.

The international education sector is worth billions of dollars.

Currently, about 4600 Australian citizens study in New Zealand and this figure includes about 1860 in the eight universities.

Overall, around 26,000 international students attend Kiwi institutions. In 2015, there were 19,097 international students at undergraduate level.

What about Kiwis in Oz?

More than 10,000 Kiwis study in Australia, where the total university student population is about one million people.

Figures on international students in New Zealand must be considered in context, as our tertiary education system is much smaller than the Australian system.

Overall, the number of students from other countries in New Zealand is about 125,000, with most enrolments from China, India, Korea and the Philippines. Half of international students hail from China and India.

New Zealand doesn’t even make the top 10 in terms of source countries for the most number of international students at Australian institutions.

Is this in line with the special visa system?

No, the special category visa system is a separate reciprocal arrangement allowing New Zealanders to live and work indefinitely in Australia, and vice versa. Australians here, though, have better access and support than Kiwis across the Tasman.

In a 2013-14 research report by the Australian parliament, the authors compared student loan systems and access by citizens of the other country.

“[In] general New Zealand provides better access to Australian students than Australia does to new Zealanders.”

Outstanding student debt – billions of dollars in each country – was an issue, the report said.

New Zealand student debtors abroad are required to repay loans; Australian student debtors abroad do not.

“Both countries provide income contingent student loans to tertiary education students. New Zealand offers them to a broader range of students, but has lower repayment income thresholds and higher repayment rates and charges no interest for those who remain in New Zealand, while Australian loans are indexed at the Consumer Price Index rate.”

In Australia, the number of Kiwi students has grown from about 10,000 in 2011/12 to 12,000 in 2015.

What’s the value of all this to the education sectors?

This is where it gets tricky, as data and other figures are held by various agencies.

Let’s start with fees.

Here, fees for domestic students (remember, this includes Australian) are generously applied and even international PhD students pay the same as domestic students.

A 2015 Education New Zealand report into the international sector said tuition fees reached a milestone that year – $1 billion.

It’s not clear how much the international sector is worth to the New Zealand economy in terms of jobs and skills, but it’s estimated at $3bn annually and 30,000 jobs.

Not too shabby.

A report for the Ministry of Business, Industry and Employment said the average amount spent by a fee-paying international student in New Zealand was $1000 per week – about $37,500 a year.

Each student spends about $15,872 a year on tuition fees in New Zealand.

Remember, this doesn’t include Australians, but this is roughly what they would be paying if the equivalent policy was introduced here.

And in Australia?

It’s a little different.

The income-based student loan system over there was introduced in 1989 and by 2010, 2.5 million people had loans. In New Zealand, the loan system started in 1992 and by 2010, 1.1 million people had taken out loans.

But New Zealanders, once they reach the income threshold of $19,136, repay 12 cents on the dollar.

Australians pay four cents on their dollar on an income threshold of A$51,000 and they can also access a special repayment loan.

Here’s more from the Australian report:

“The latest estimate of the average number of years to repay debt for Australian students is 8.4 years. Average repayment times are not available for New Zealand students, however the forecast median repayment time (for students who completed their New Zealand-based studies in 2008) is 6.7 years.”

And, here’s the view of the Productivity Commission a couple of years ago:

“Different social security and tax systems have placed some New Zealanders resident in Australia for long periods in anomalous situations.

“The Australian government should enhance information for arriving and long term resident New Zealanders; address the issues faced by non-protected Special Category Visa holders living long term in Australia including by developing pathways to citizenship; and seek to improve their access to tertiary education.”

Anything else?

It’s political, obviously. 

By the way, all eight of the universities in New Zealand are world-ranked institutions.

Tertiary education minister Paul Goldsmith said New Zealand invested more than $4.1bn in the tertiary sector and had one of the most generous student support systems in the world, spending over $1.14b on student financial support in 2015/16.

“The share of the full cost of tertiary education course provision for students paid for by the government is around 82 per cent, once interest free loans are included.

“As well as that, taxpayers make a contribution to the students’ living costs either through allowances or student loans. We think that balance is reasonable.

“Individuals gain significantly from tertiary education: five years after graduation, young domestic bachelors graduates earn on average 40 percent more than the national median income.

“International education is New Zealand’s fourth largest export industry, valued at $4.28 billion a year.”

SOURCES: Australian Parliamentary Library, Australian Department of Education and Training, Statistics New Zealand, MBIE, Ministry of Education, Education New Zealand, Universities New Zealand