The Minister of Education is consulting on tertiary fee regulation settings for 2024

The Minister of Education invites submissions on proposed fee regulation settings for tertiary education providers in 2024. This includes a proposed Annual Maximum Fee Movement of 2.8%, as well as increasing the micro-credential fee cap and policy changes to fee regulations.

The Annual Maximum Fee Movement

The Government regulates how much tertiary providers can charge in fees for domestic students each year through the Annual Maximum Fee Movement (AMFM) and the micro-credential fee cap. The AMFM sets the maximum percentage increase allowed on fees for existing courses at level 3 or above on the New Zealand Qualifications and Credentials Framework (NZQCF).

The Minister of Education has proposed an AMFM rate of 2.8% for 2024, in line with forecast inflation for the 2024 calendar year. This would permit up to a 2.8% increase on the fees (GST exclusive) charged in 2023 to domestic students. This strikes a balance between maintaining the affordability of tertiary education for students and their whānau, while also giving tertiary providers some flexibility to help cover increases to costs in 2024.

The micro-credential fee cap

The micro-credential fee cap sets a per-credit cap on the fees that providers can charge domestic students enrolled in micro-credentials. A micro-credential fee cap of $60 per-credit was introduced from the start of 2021 and has not increased in that time.

The Minister of Education has proposed to increase the micro-credential fee cap to $64 per-credit for the 2024 calendar year, in line with cumulative AMFM rate increases from 2022 onwards.

Fee regulation policy changes

A range of policy changes to fee regulation settings from 2024 have been proposed by the Minister of Education. These include changes to how the AMFM is implemented and changes to student services fee settings.

Allowing providers to temporarily reduce fees under the AMFM

The Minister of Education proposes to change AMFM settings from 2024 to allow providers to temporarily reduce fees for a course without having to remain at the reduced rate.

Under the proposed settings, a provider could temporarily reduce the fees for a course across calendar years, while retaining the flexibility to subsequently return the previous fee, also taking into account AMFM increases for that time. This proposal increases the flexibility of the AMFM and enables new pricing strategies for providers.  

Relaxing exception criteria for the AMFM

Under existing AMFM settings, providers can apply for a one-off exception to increase the fees for a course at twice the rate of the AMFM. A range of criteria must be met for a course to be granted an exception, including that the provider would not be financially viable if it continued to deliver the course without an exception. In the past, providers have been unable to demonstrate that they meet exception criteria.

The Minister of Education proposes to relax the AMFM exception criteria from 2024 to allow for an exception where there are justifiable circumstances. This includes:

• Requiring providers to demonstrate that the course (rather than the provider) is not financially sustainable without an exception, which would also be subject to quality assurance and strategic alignment criteria.
• Limiting eligibility to courses that have fees below the 75^th percentile of fees for similar courses.
• Introducing a provider-level cap on the number of exception applications that can be made each year.

Increasing the transparency of student services fees

The Minister of Education has proposed several changes to increase the transparency and quality of the decision-making process for student services fees from 2024. These include:

• Making providers’ legal obligations when consulting with learners on student services fees explicit in fee regulations.
• Requiring providers to publicly report the fee income and expenditure for each type of student service.
• Requiring providers to publicly report how learner feedback influenced providers’ decisions on student services fee amounts and utilisation.
• Introducing a new student service category to allow providers to pay for the cost of consulting with learners on student services fees through student services fee revenue.

Te Pūkenga programme unification

The Minister of Education proposes to continue to apply the fee setting limits for new courses (the 75^th percentile rule) to courses that are part of a unified programme at Te Pūkenga, to support Te Pūkenga’s process to unify programmes across its network in 2024.

Consultation process

The proposed conditions have been published in the New Zealand Gazette and submissions close 17 July 2023.

The Tertiary Education (2024 Fee Regulations Settings) Notice 2023 - gazette.govt.nz(external link)

Following consultation, the Minister will then make a final decision on the fee regulation settings for 2024.

Email

Submissions can be sent by email to tertiary.strategy@education.govt.nz.

Post

Submissions can be sent by post to:

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