Tuition fees and compulsory course costs

The Government regulates the tuition fees and compulsory course costs that tertiary education providers can charge to domestic students participating in government-funded programmes.

The Annual Maximum Fee Movement (AMFM)

The Government regulates how much tertiary providers can increase their fees for domestic students each year through the AMFM. This caps the percentage increase on fees for existing courses funded through the Student Achievement Component (SAC) level 3 and above fund.

When setting the AMFM, the Government aims to strike a balance between:

  • protecting the affordability of tertiary education for learners and their families,
  • giving tertiary providers some flexibility to increase fees to help meet rising costs, and
  • managing costs to government through student loans and fees-free support.

Following consultation from 30 July to 20 August 2020, the Minister of Education confirmed on 19 September 2020 that the AMFM rate will be set at 1.1 percent for the 2021 calendar year. This is in line with forecast inflation for 2021 as published in the 2020 Budget Economic and Fiscal Update. This permits a 1.1 percent increase on the fees (GST exclusive) charged in 2020 to domestic students. The table below shows the AMFM rates since the policy was introduced in 2011:

Table 1: AMFM rates from 2011 until 2021

2011 4%
2012 4%
2013 4%
2014 4%
2015 4%
2016 3%
2017 2%
2018 2%
2019 2%
2020 2%
2021 1.1%

A tertiary education provider may apply to the Tertiary Education Commission (TEC) for an exception from the 2021 AMFM on the basis of exceptional circumstances. Any exception granted will not exceed double the AMFM rate (for example, in 2021 this is 2.2 percent). You can find more information on these exception criteria on the TEC’s website(external link).

Fee setting limits for new courses or training schemes

The tuition fees and compulsory course costs for a new course or training scheme (excluding micro-credentials) must be no more than the 75th percentile from the range of fees charged for similar courses or training schemes. The TEC specifies how similar courses or training schemes are determined.

A tertiary education provider may apply to the TEC for an exception to these fee setting limits. You can find more information on how the 75th percentile is calculated and what the exception criteria are on the TEC’s website(external link).

Fee capping limits for micro-credentials

Following consultation from 30 July to 20 August 2020, the Minister of Education confirmed new fee regulation settings for micro-credentials. Micro-credentials are short study awards, distinct from qualifications, and certify achievement of a coherent set of skills and knowledge and that have evidence of need by industry, employers, iwi and/or the community.

The Minister introduced a $60 (GST inclusive) per credit cap on all micro-credentials that receive tuition subsidies through the Student Achievement Component (SAC) level 3 and above fund. These new settings come into effect on 1 January 2021 and include both new and existing micro-credentials.*

The Tertiary Education Commission (TEC) has discretion to manage an exceptions process so that tertiary providers can seek an exemption to the $60 per credit cap. The TEC will assess evidence submitted by tertiary providers that demonstrates higher actual and reasonable costs and strong industry need. The TEC is currently in the process of developing this exceptions process, with plans to start accepting applications by early November.

* Training schemes that are not micro-credentials are subject to existing fee regulation settings, including the AMFM and fee setting regulations for new courses or training schemes. Where a micro-credential is made up wholly or partly of existing courses that lead to a qualification, the fees for these components of the micro-credential must be no more than the maximum fee permitted under existing fee regulation settings (not the $60 per credit fee cap). Any components of the micro-credential that are not part of a course would be subject to the fee cap.

Further information

The Minister of Education has confirmed tertiary education fee regulation settings for 2021
The Tertiary Education (2021 Fee Maxima) Notice 2020(external link)

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