Varsity funding to be linked to grades

Students' poor grades will hit university bank balances under sweeping Government changes.

Tertiary Education Minister Anne Tolley yesterday released the Tertiary Education Strategy 2010-2015.

Tertiary institution funding will be linked to performance, the strategy says.

Initially, this will focus on student results.

Later, funding will also relate to graduates' eventual jobs.

"Almost $4 billion is spent on tertiary education every year in New Zealand, and taxpayers have the right to expect that every dollar of this is spent wisely," Tolley said.

Institutions would have to tighten their belts and make public more performance information.

The findings of external reviews would be published, as well as information about retention and completion rates and graduates' eventual jobs.

The Government would "explore ways of giving providers some additional flexibility to raise revenue", the strategy said.

Current rules mean institutions can only increase fees up to a set amount each year.

This year, fees could increase up to 2.6 per cent. In 2010, fees could rise up to 1.95 per cent.

Last night, Tolley said the current regime was "inflexible for providers and difficult to monitor for students. We are therefore looking at ways to simplify the regulation of fees."

Tertiary Education Union president Tom Ryan said a fees cap must remain.

A plan to tag funding to student results was understandable, but raised concerns, Ryan said.

"Our concern is that students from difficult backgrounds are going to cop it here, because they are the ones who tend to drop out and not finish or have significant disruption in their studies," Ryan said.