The Minister of Education has confirmed tertiary fee regulation settings for 2024

Following consultation, the Minister of Education has confirmed fee regulation settings for provider-based fees in the tertiary education system for 2024.

This includes setting the Annual Maximum Fee Movement at 2.8% and increasing the fee cap for micro-credentials to $64 per credit, along with changes to fee regulation policy for 2024.

The Annual Maximum Fee Movement

The Government regulates how much tertiary providers can increase their fees for domestic students each year through the Annual Maximum Fee Movement (AMFM).

This caps the percentage increase on fees for existing courses at level 3 and above on the New Zealand Qualifications and Credentials Framework (NZQCF).

Following consultation, the Minister of Education has confirmed that the AMFM rate will be set at 2.8% for the 2024 calendar year. This is in line with the Budget 2023 across-the-board increase for tertiary tuition and training subsidies for 2024 and the forecast inflation for the 2024 calendar year. It permits a 2.8% increase on the fees (GST exclusive) charged to domestic students in 2024.

An AMFM of 2.8% strikes a balance between maintaining the affordability of tertiary education for students and their whānau, while also giving tertiary education 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 and has not been changed nor adjusted for inflations since it was introduced in 2021. 

Following consultation, the Minister has confirmed the increase in micro-credential fee cap to $64 per credit for the 2024 calendar year, in line with cumulative AMFM rate. Micro-credentials will now be set at $64 per credit cap (GST inclusive).

Fee regulation policy changes

A range of policy changes to fee regulation settings from 2024 have been approved 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 has approved changes to the AMFM settings from 2024 to allow providers to temporarily reduce fees for a course without having to remain at the reduced rate.

Under these 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 increases the flexibility of the AMFM and enables new pricing strategies for providers.

Relaxing exception criteria for the AMFM

Under current 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.

Following consultation, the Minister of Education has agreed 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 75th 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 approved 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.

Te Pūkenga programme unification

The Minister of Education has approved to continue to apply the fee setting limits for new courses (the 75th 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.

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