Free fees is very badly spent money

Susan Edmonds writes at Radio NZ:

Eligible students can now apply for funds to help with the cost of their final year of study.

But one economist is asking whether it’s the best use of the money.

People who are studying for the first time can now access up to $12,000 for their final year of study or final two years of work-based learning.

The fees-free scheme changed from funding the first year to the final year from 1 January last year.

Better final year than first year.

Infometrics chief executive Brad Olsen pointed to government analysis of the scheme before the change was introduced, which highlighted that it had not achieved many of its objectives.

“It wasn’t lifting participation rates or anything like that. It wasn’t helping people who would not have otherwise gone to university,” he said.

“It wasn’t helping people in a more disadvantaged position. It was basically just making stuff free, which might have felt good, but it didn’t make a real difference in terms of access or engagement or in completions or anything else. And so I think the challenge there was that you were paying a fair amount to subsidise a group of people to start their university career, where they were probably already going to do that.

NZers who get a degree earn on average $1.5 million more than those who only do secondary school. Why are we giving so much money to the future very wealthy.

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