Labour would repeal the policy of linking tertiary institute funding with performance measures such as course completion rates, says a visiting MP.
The party's tertiary education spokeswoman, Maryan Street, called the policy "a complete travesty".
Street visited four tertiary providers in Palmerston North yesterday with candidates Iain Lees-Galloway and Deborah Russell.
She highlighted UCOL and Massey University as institutes being asked to "do more with less" under the National-led Government's tertiary funding policies, which was not sustainable.
Massey's high proportion of extramural students hurt it when measures such as course completion were considered, she said.
Through its focus on distance learning, Massey allowed more people to have access to a university education, Street said - people who were not necessarily able to relocate.
Performance-based funding policies placed pressure on education providers to "water down" courses to get people through, she said.
"I don't believe that happens but the pressure is huge," she said.
"Another thing I worry will happen is institutes will make a call on a particular enrolment application and say: ‘You're too high a risk to get through to completion, we're not going to take you'."
Street said the policy had cost UCOL funding in the past year - funding that Labour would reinstate.
UCOL originally had $2 million of its Student Achievement Component funding cut for this year. However, $1.1m was reinstated following talks with the Tertiary Education Commission in recognition of a high number of enrolments in the first semester and improved course completion rates from last year.
Tertiary Education Minister Steven Joyce has previously defended the use of incentives in the funding of the sector.
"Course completion rates are the simplest building block of performance and results," he told the Manawatu Standard earlier this year.
Street said Labour would make sure university funding was adjusted each year to meet increases in costs.
The party was also planning to review student loan and allowance payments and eligibility.
Joyce has called Labour's tertiary policy a return to a bums on seats approach that would lead to a blowout of tertiary costs.
- Manawatu Standard
If you had a choice, which would you prefer on Christmas day?Related story: Sun takes a Christmas holiday