Students question university affordability after government scraps fees-free scheme

Some University of Auckland students are questioning whether they can afford to continue their studies, after the government has announced it is scrapping the fees-free university scheme.

"I don't speak for every student here, but I would not be surprised if a lot of students felt like leaving," Joseph told RNZ.

"I was hoping it could be free, but I guess I'm more motivated now to make some money again."

On Friday, Winston Peters revealed it would be scrapped in the upcoming Budget.

Finance Minister Nicola Willis later confirmed that to RNZ.

The scheme covered up to $12,000 for first-time tertiary students in their final year of study.

It was introduced by the former Labour government in 2017 as a first-year fees-free scheme, beginning from 2018, before the National-led coalition shifted it to the final year from 2025.

The announcement has hit current second-year students particularly hard, as many missed out on getting their first-year free and would now also miss out on the final year.

Student Coco told RNZ that she enrolled in university with the understanding that she would get a year for free.

"And then I just also think with the degree that I'm doing, I'd get paid better in Aussie, so it's just even less incentive to stay here."

Eva, who is in her second year of a Bachelor of Arts, said many students in her cohort felt misled.

"Personally, for me, I was lucky enough where it doesn't necessarily affect me, but I know so many people that they only made the decision to come to uni based on the fact that they would only have to pay for two years," she said.

"So the fact that the first year was made third year already eliminated so many people from at least trying to go to university, and then now that it's just gone completely, particularly with not even being rolled in, it's just already been taken away from students that were relying on it, is pretty gross and tricked."

First-year student Najesty believed that was unfair.

"I definitely think they should have waited for the people who were going into that year to finish it.

"I think it would have been fair for them because now they have to figure out a way to pay for it because it's gone."

Another first-year student, Samantha, agreed.

"It makes it, like, unaffordable.

"It was like a driving force for, like, you know, getting through university and now it's, like, an extra cost that we all have to, like, bear."

Speaking to Morning Report on Monday, Prime Minister Christopher Luxon said the scheme had been "quite a failure".

But student Matt disagreed.

"It takes away so many opportunities for people who can't afford it, who need that third year free.

"I personally am not affected because I have StudyLink and I have those options, but it's still irritating that it's gonna put extra financial stress on me in the future when this is supposed to be one of the main encouragements for people gaining higher education and for building a better future for New Zealand."

Student Adam said it sent the wrong message at a time when youth unemployment and disengagment was high.

The NEET - not in employment, education, or training - rate for young people was 14.4 percent in the March 2026 quarter.

"I personally think that it's quite an unnecessary discouragement of higher education," he said.

"I think that's an important part of New Zealand society in general. I think we should pride ourselves on having a good higher education in this country, and I don't think cutting away third year free tuition is a good idea."

Speaking to First Up, Deputy Prime Minister and Associate Education Minister David Seymour, said the fees-free scheme didn't get the results needed for the cost.

It had failed to boost student numbers, he said.

It had cost the government close to $350m a year, Seymour said, and the country was in a "financially precarious situation" and could no longer afford to foot the bill.

Seymour said his party (ACT), had opposed the scheme from the start as it didn't provide what he called public benefits.

He said he was aware there was a growing cohort of students considering going to university in Australia, but believed this was a "tiny fraction".

Hipkins no promises on fees-free policy until after Budget

Labour leader Chris Hipkins told Morning Report his party could not decide on whether they will reinstate the fees free policy for one year of tertiary education, until they have seen the government's Budget.

He said when Labour introduced the policy, it was intended to ease the financial pressure on students.

The government has been "systematically dismantling all of the various initiatives the previous Labour government put in place to get young people engaged in education, training or employment", he said.

"They promised before the last election they were going to keep fees free now they're abolishing it, they promised they were going to keep the apprenticeship boost then they cut it, they promised they were going to continue to support Māori and Pasifika trades training and then they made cuts to that as well."

Asked whether the policy intended to increase participation from young people from lower socio-economic backgrounds, Hipkins said the policy aimed to do a number of things including "easing the financial pressure on the next generation of New Zealanders".

But he said it was introduced at a time when youth participation in the labour force was very high and unemployment was low, he said.

"And a lot of young New Zealanders, who we were trying to target with that policy, made the decision to go into paid employment instead."

Asked if it was a good policy, he said he would not design it exactly the same now.

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