Source: Radio New Zealand
Universities say government subsidies aren’t enough to cover all of their students. RNZ / Richard Tindiller
Universities have revealed they are missing out on millions of dollars in government subsidies because there is not enough money to cover all of their students.
Seven universities told RNZ they collectively carried several thousand un-subsidised domestic students last year and expected more of the same this year.
The students paid fees but the universities missed out on government contributions starting at $7287 per student in the cheapest undergraduate courses.
It happened because the government did not provide the Tertiary Education Commission (TEC) with enough funding for all enrolments in 2025 or 2026 – a situation expected to repeat in 2027.
Auckland, AUT, Waikato, Massey, Victoria, Lincoln and Canterbury told RNZ they had unfunded domestic students last year and/or this year.
In addition Lincoln and AUT said TEC reduced their funding allocation this year though AUT said that was partly because its 2025 funding was increased to meet high demand.
Auckland said 1662 or five percent of its 31,302 domestic EFTS (equivalent full-time students) last year were not subsidised though the commission topped up its funding in some areas.
It said it was too early to provide numbers for this year.
Victoria University said two percent or nearly 300 of its domestic EFTS were unfunded last year and it could not comment on this year’s position yet.
Victoria University said two percent or nearly 300 of its domestic EFTS were unfunded last year. RNZ / Samuel Rillstone
Waikato University said it exceeded its agreed 2025 funding allocation of $100 million by 7.3 percent, meaning its 9222 domestic EFTS included several-hundred who would otherwise have attracted $7.3m in government funding.
It said this year its funding cap for domestic students was set at 110 percent and it was negotiating with the commission to exceed that.
Massey University said 92 of its 12,760 domestic EFTS last year were not funded because the university exceeded its allocation.
It said it was expecting to enrol 13,195 domestic EFTS this year with about 260 unfunded.
Canterbury University said it absorbed the cost of some unsubsidised students in 2025, but was still finalising the final figures and it was too early to confirm 2026.
Lincoln said it had 165 unfunded EFTS last year and expected 42 this year.
AUT said it exceeded its agreed enrolments by seven percent last year and 3.7 percent of its 16,723 domestic EFTS in 2025 were unfunded.
The university said it reduced new enrolments but had applied to again enrol up to 107 percent this year.
“In early 2026, AUT applied to TEC to enrol up to 107 percent – largely to accommodate ongoing growth in pipeline (Years 2-4) for students we already have an existing commitment to,” it said.
“It is in New Zealand’s interest that they graduate. Improved retention, a measure of student success, has been a key performance measure for all TEOs [tertiary education organisations], but there is currently not sufficient funding to support the increase in returning EFTS, along with levels of demand from new entrants.”
Otago University said all of its 2025 domestic EFTS were funded and this year it was experiencing 4.3 percent growth.
“We will not know how many, if any, unfunded EFTS we will carry until we have had further discussions with the TEC,” it said.
Otago’s director of strategy, analytics and reporting David Thomson said this year’s significant growth was “highly probable and predictable”.
He said the 2025 Year 13 school leaver cohort was significantly larger than in 2024 or any other recent year; academic achievement across universities had improved resulting in improved retention; and relatively high unemployment typically caused higher levels of progression to tertiary study, and higher retention.
Otago University said it was experiencing 4.3 percent growth. RNZ / Nate McKinnon
Lincoln larger than ever
Lincoln University vice-chancellor Grant Edwards told RNZ the university had a record number of students.
“We currently have about three-and-a-half-thousand full-time equivalent students here in New Zealand of domestic and international students and we also operate transnational education on joint programmes, which will be approaching about 400 offshore full-time equivalent students as well,” he said.
“That’s a head count of about five-and-a-half-thousand students at this point in time, which is the largest the university has ever been in its history.”
Despite the growth, Edwards said Lincoln needed to make staff cuts because of “very strong signals” that domestic student funding was likely to be constrained in future.
He said TEC had indicated the university could lose funding for courses that were not priority areas.
Edwards would not say what those areas were or how much funding might be cut.
Meanwhile, he said Lincoln enrolled un-subsidised students last year and this year.
He said the numbers were significant enough for the university to try to focus enrolments into areas that were government priorities.
He said Lincoln was fortunate because its core focus of land-based subjects aligned well with the government’s priorities.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
