NZ tertiary education providers face limits on their delivery under the Student Achievement Component – what we used to call EFTS funding. They are expected to enrol students within a 97-103% range of their expected funding (ie 100%). That is calculated by adding up the notional value of all of the enrolments (a medicine enrolment is worth more than an arts enrolment) and dividing it by the agreed funding for each provider.

The system was brought in from 2008 and replaced the previous roughly demand-driven funding. 2008 was a normal year and people worked towards their targets (many ITPs underperformed actually), but in 2009 there was a recession and enrolments shot up early in the year. There was a hot debate about whether funding should be increased or whether providers should be encouraged to take on students with a loan only. Finally, then Minister for Tertiary Education Anne Tolley said that there was no more money for tuition subsidies or student loans, and that providers must live within their caps. I remember well because she said it in a Radio NZ interview of which I was also part

I predicted at the time that universities would be given an easier ride on the caps, given their positive reputation and their tendency to be more independent. I remember being assured by various people in the government that the rules would be applied equally, but it seems that I was right (gotta be right sometimes!). The 2009 figures below show that the average university result was 103.1%, over the limit, while 5/8 universities exceeded the government limit on enrolments. Waikato, Massey and Canterbury may find it especially difficult to get under the cap this year once pipeline effects are taken into account.

I don’t agree with the idea of a cap, but it is a side-effect of the enormous government involvement in tertiary education in NZ – domestic students can’t pay higher fees after government-funded places fill, and interest free loans make even unfunded places a heavy cost to the government. What concerns me more is whether providers are getting a consistent steer from the TEC – if the TEC doesn’t treat all parts of the sector fairly under the rules, then respect for it will decline and it will find it harder to hold people to their agreements. Of course, the 5 universities in question may have had the riot act read to them by the TEC…

Tomorrow we’ll cover wananga. Over/Under Delivery percentage is derived from data supplied by the TEC.