Abolish UE, add interest on student loans - the Commission's tertiary education report



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Calls to abolish University Entrance, introduce interest on student loans, and develop better careers education were among the recommendations found in the Productivity Commission’s final report on New Zealand’s tertiary education system, released today.

175781562.jpgThe report, New models of tertiary education, has been met with mixed reactions, with many expressing concerns about some of its more radical proposals.

The Government asked the Commission to look at how well our tertiary education system responds to emerging demographic and technological trends and changes in the education sector and the workforce. The report focused on identifying potential barriers to innovation.

Commission chair Murray Sherwin describes New Zealand’s current tertiary education system as “tightly controlled and inflexible”.

“Our current system serves many students well. But it could be better, and it could do more to extend the benefits of tertiary education to groups who currently can’t access it,” he says. “Providers have too few incentives to find better ways of reaching and teaching learners.”

The report outlines a number of recommendations for the sector, including:

-          better quality control and self-accreditation for strong performers;

-          making it easier for students to transfer between courses;

-          abolishing University Entrance;

-          better careers education for young people;

-          enabling tertiary institutions to own and control their assets;

-          making it easier for new providers to enter the system;

-          and facilitating more and faster innovation by tertiary education providers.

The Commission has not recommended a Student Education Account, which it had floated in a September 2016 draft report, however it does recommend changes to how student places are centrally-allocated to tertiary providers.

Tertiary Education, Skills and Employment Minister Paul Goldsmith says the Government will keep an open mind on all of the 49 recommendations, with the exception of the Commission’s view that interest should be reintroduced on new student loan borrowing.

 “The Government is committed to retaining interest-free student loans for borrowers residing in New Zealand,” says Mr Goldsmith.

While Universities New Zealand has welcomed aspects of the report – the recommendation for a more joined-up careers information system and the need for a more differentiated tertiary education strategy - it says the Productivity Commission has failed to understand the real challenges facing New Zealand’s universities and is trying to fix what’s not broken while ignoring things that are.

 “The fundamental issue is that funding and regulations are so locked down they are now the main constraint on the ability of our universities to create the truly great universities that New Zealand needs and deserves,” says chair, Professor Stuart McCutcheon.

Executive Director Chris Whelan agrees, saying that the universities identified as demonstrating international best practice are funded at rates at least three times that of New Zealand providers. 

“[The Commission] are arguing that deregulation and opening the market up to more international competition is the key to producing a better system for students and employers. 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.”

Whelan also thinks ditching University Entrance altogether is one step too far.

“The reason we have so few young people failing at university is because University Entrance sends a good signal that they are academically ready for university-level study.  And the reason all our universities are so highly ranked internationally, and why we have such good graduate employment rates, is that we have an effective, world-class quality assurance system involving collaboration between the eight universities.”

The New Zealand Union of Student Associations (NZUSA) is also concerned about the recommendation to abolish University Entrance.

“Students want the certainty of having a target that gets them into a university. Removing it is not in students’ interest,” says national president Jonathan Gee.

The NZUSA is also appalled at the suggestion of introducing interest on student loans, but it welcomes the recommendations on careers education.

However, Industry Training Federation Chief Executive Josh Williams says its a shame all the focus has been on student loans and UE.

“The report is an impressive undertaking," he says.  "It's the first time in a long time that the whole system has been described in one place, warts and all."

"While it doesn't describe or prescribe 'new models', it makes several recommendations that, if implemented well, could ensure that post-school education is more responsive and adaptive to workforce needs." Mr Williams says.

“On our read, the call to action from the Productivity Commission's report - and the desire of many of the system's stakeholders - is to collaborate more naturally, make transitions easier, and make education and training more flexible and responsive.”  

The Government says it will respond formally to the Productivity Commission’s recommendations in due course. The report was tabled in Parliament this morning, and can be found on the Commission’s website www.productivity.govt.nz.

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