Joyce plan has tertiary chiefs' nod

Students' grades will be lifted by performance-weighted tertiary funding, UCOL and Massey University chiefs say.

Both tertiary executives back a Government plan announced this week to base up to a tenth of tertiary funding on students' academic performances from 2012.

The shift has its critics. The Tertiary Education Union president said the Government needs to invest more in education, rather than restricting funding.

Others argue the policy will gain greater value from a limited funding pool.

UCOL chief executive Paul McElroy said he's happy to give performance-based funding a go.

"My mind's not closed to anything that will help us lift our performance."

He said the policy does come with unintentional risks though. Tertiary institutes may turn away low-performing students to maximise funding.

"There is a risk of profiling or culling students but there's ways to deal with this."

Some tertiary institutes may also gain a higher proportion of funding by attracting top students.

But Mr McElroy stressed he was happy with the overall shift and plans to discuss any concerns with the Government.

Massey University Vice-Chancellor Steve Maharey said the Government's approach gains greater value for money for education. He said he felt reassured by the Government's opting for a gradual change rather than a "big bang" approach.

The policy signals a shift towards funding based on student enrolments and performance. Previously, tertiary institutes were funded by student numbers.

Mr Maharey said performance-based funding will encourage universities to improve all students' achievements.

Educational performance will be measured by course and qualification completion rates, and student progression.

TEU national president Tom Ryan said these changes may incentivise the wrong behaviour by rewarding higher pass rates with more funding.

"Shifting money around and getting institutions, staff members, or students to compete between themselves will not solve the real problem that universities, polytechnics, and wananga need to be better funded."

Tertiary Education minister Steven Joyce said in a speech this week that performance-based funding is an incentive for institutions to lift students' achievements. "There are a large number of tertiary programmes, particularly below degree-level, that have course pass rates as low as 30 per cent. Some of these programmes fail to properly equip students for the jobs they seek."

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