Source: Radio New Zealand
The Tertiary Education Commission has warned it will not have enough government funding to cover all domestic enrolments next year. RNZ / Richard Tindiller
The Tertiary Education Commission (TEC) has warned it will not have enough government funding to cover all domestic enrolments next year – the third consecutive year funding was expected to fall short of demand for tertiary education.
The warning came in the commission’s guidance to institutions applying for government funding in 2027.
“Investment planning for 2027 is taking place in a very challenging fiscal environment. We expect demand to remain strong and available funding to be unlikely to match it. Trade-offs will be required and most providers will see reduced investment,” it said.
It said the commission would base its funding decisions on factors including evidence of improvements in student pass rates, financial performance, and institutions’ contribution to the network of tertiary courses provided around the country.
The commission also warned some institutes could lose some, or even all, funding.
“We expect to actively disinvest where these requirements are not met,” it said.
“In exceptional circumstances we may disinvest from all [of] your provision.”
Last year, the commission said it had enough funding for 99 percent of expected enrolments in 2025 and in 2026 and would use its reserves to provide funding for up to 102 percent of forecast enrolments this year.
However, 2025’s domestic enrolments exceeded forecasts and the commission said it was still calculating the result for that year.
“The final 2025 position across the entire tertiary sector is still being processed as we work through the annual wash up process over the next couple of months,” it said.
The commission said the government’s Budget could affect the outlook for this year.
“Unfunded learner numbers for 2026 will not be able to be forecast until after Budget ’26 decisions are taken and TEC receives it first data return on enrolments,” it said.
“The signalling in the plan guidance document reflects the current situation where the government is operating in a very tight fiscal environment and where economic conditions, the job market and demographics are driving enrolment growth. The sector needs to be prepared that not all programmes they wish to deliver can be fully funded with the focus being on supporting programmes in priority areas.”
The guidance also cautioned against rapid growth in foreign enrolments.
“Providers need to ensure growth in international education is sustainable, and that the quality of education and educational experience for international students and domestic learners is maintained or enhanced,” it said.
“This will support New Zealand’s reputation as a competitive global provider of high-quality education… Any potential negative impacts, such as on placement capacity, need to be carefully managed.”
Universities New Zealand chief executive Chris Whelan said historically governments had funded all enrolments because they did not want students to be turned away from courses.
Universities New Zealand chief executive Chris Whelan. Universities New Zealand
“The government has funded the forecast numbers, the problem is actual numbers keep exceeding forecast,” he said.
Whelan said institutions could cope with small numbers of unfunded students, but not with large numbers and the effect varied depending on what proportion of a student’s education was covered by government subisdies.
In some subjects, the split was 50/50 between student fees and government subsidies, in others it was more like 33/67.
Whelan said as a result some institutions were refusing unfunded enrolments.
“Certainly I’m hearing, even though it’s quite early, that is happening in some places where universities are discouraging enrolments because they are unfunded places… And in other places, of course, universities are simply saying, yep, we can take on a smallish number of unfunded places.”
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
LiveNews: https://nz.mil-osi.com/2026/03/26/tertiary-education-commission-warns-of-government-funding-shortfall-for-domestic-enrolments/