The Annual Maximum Fee Movement

The Government regulates how much tertiary providers can increase their fees for domestic students each year through the Annual Maximum Fee Movement (AMFM). This caps the percentage increase on fees for existing courses at level 3 or above on the New Zealand Qualifications Framework.

The Minister of Education has proposed an AMFM rate of 1.1 percent for the 2021 calendar year, in line with forecast inflation for 2021 as published in the 2020 Budget Economic and Fiscal Update. This would permit a 1.1 percent increase on the fees (GST exclusive) charged in 2020 to domestic students.

This will help to maintain the affordability of tertiary education for students and their whānau at a time when we expect more people to undertake tertiary study or training due to the economic impacts of COVID-19. This also gives tertiary providers some flexibility to help cover increases to costs in 2021.

Fee capping limits for micro-credentials

The Minister has also proposed new interim fee regulation settings for micro-credentials. We have recently reached a landmark of 100 NZQA-approved micro-credentials, with over 35 of these approved for tuition subsidy funding. As the number of government-funded micro-credentials increases and the number of students participating in them increases, there is a stronger case for regulating these fees to protect students from significant cost barriers.

The Minister has proposed 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.[i] This proposal would come into effect on 1 January 2021 and includes both new and existing micro-credentials.

The proposed conditions also give the Tertiary Education Commission (TEC) discretion to manage an exceptions process so that tertiary providers can seek an exemption to the $60 per credit cap. The tertiary provider would need to provide evidence that the micro-credential has:

• Higher actual and reasonable costs: the tertiary provider would need to demonstrate that the fee cap makes it financially unsustainable to offer the micro-credential, in terms of the costs of delivering the micro-credential, and that there are no satisfactory alternatives to limit costs. This will take into account the total income that the micro-credential would receive from both government funding and fees.
• Strong industry need: the tertiary provider must provide evidence that there is strong support from industry and/or employers to deliver the micro-credential and that this clearly meets industry and/or employer needs.

Under the proposed conditions, 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.

Consultation process

The proposed conditions have been published in the New Zealand Gazette and submissions close 20 August 2020. Following consultation, the Minister will then make a final decision on the fee regulation settings for 2021, including the AMFM rate.

All submissions can be sent either by email to:

tertiary.strategy@education.govt.nz

Or by post to:

Fee Maxima Submissions
Tertiary Education Policy
Ministry of Education
PO Box 1666
Wellington 6140         

Requesting additional fee information for 2021

The Ministry of Education and the TEC will be sending out requests for additional information for 2021 on other compulsory fees charged that are not currently reported to agencies as a tuition fee or compulsory course cost. This could include for example compulsory administration charges or programme fees that are not charged at the course level or included in reported fees. This will be a separate request outside of normal reporting requirements. The TEC will send out more information on this request to tertiary providers in late 2020.

[i] Note that 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.