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.

Following consultation, the Minister of Education has confirmed 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.

Fee capping limits for micro-credentials

The Minister has also confirmed new interim 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 has decided to set 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 will come into effect on 1 January 2021 and include both new and existing micro-credentials.

The new settings 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 TEC will assess evidence submitted by tertiary providers that demonstrates:

• 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.

The TEC is currently in the process of developing this exceptions process, with plans to start accepting applications by early November. Note that tertiary education providers can also opt to not receive SAC level 3 and above funding and then not be subject to fee regulation settings.

The New Zealand Qualifications Authority (NZQA) is currently looking to relax rules that micro-credentials cannot be made up of existing courses that lead to a qualification. This may mean that in future, a micro-credential is made up of existing courses. 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.

Requesting additional fee information for 2021

The Ministry of Education and the TEC will be working together in late 2020 to request additional information on other compulsory fees charged that are not currently reported to agencies as a tuition fee or compulsory course cost. The focus will be on additional fees that relate to a learner’s programme of study. 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.

*  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.