New Zealand to Scrap Fees-Free Tertiary Education

The New Zealand Government has confirmed it will scrap the fees-free tertiary education scheme, citing a failure to increase student participation and the need to address ongoing fiscal pressures.

Finance Minister Nicola Willis stated that 2026 will be the final year in which students completing their studies are eligible for fees-free support. Starting in 2027, the support will be removed for new cohorts, although students already in their final year of study will still receive the benefit.

The confirmation follows a disclosure by New Zealand First leader Winston Peters on May 9, 2026, during an interview with Newstalk ZB. Peters described the announcement as a Budget leak, stating that the government intends to reshape and repurpose the funding for trades and other industries where a better return on investment is expected.

Speaking on May 11, 2026, Finance Minister Nicola Willis said the policy failed to meet its primary objective of increasing participation in tertiary education and fell short in reaching the students it was designed to help most.

Willis linked the decision to the country’s broader economic situation, noting that New Zealand has been in deficit since 2019 and is carrying significant debt.

Deputy Prime Minister and ACT Party leader David Seymour stated that the policy cost nearly $350 million per year without significantly improving access for disadvantaged students. Seymour argued that while the policy reduced loans for some, it did not increase the number of disadvantaged students attending school and created additional government debt from students who utilized the free year but did not complete their courses.

The fees-free study scheme was originally introduced by the previous Labour Government in 2018. Under the initial policy, the government provided up to $12,000 in tuition fees for the first year of study or the first two years of work-based learning.

After taking power, the coalition Government revised the policy in 2024 to cover the final year of tertiary education study instead of the first.

Willis rejected suggestions that the public disclosure by Winston Peters caused tension within the coalition, stating that the parties were aligned on the decision and that the outcome is a positive result for New Zealanders in both the short and long term.