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Private Training Providers livid at Fees Maxima

Private Training Providers livid at final Fees Maxima announcement:

The NZ Association of Private Education Providers are extremely disappointed at the announcement of the final Fee Maxima levels, and acknowledge that it will signal the demise of some Private Training Establishments (PTEs)

How and why are PTEs expected to operate programmes at a significantly cheaper overall cost than Government Tertiary Institutions (TEIs) and maintain comparable quality? TEIs already receive an extra 9.5% capital component portion with the EFTS tuition subsidy over and above that received by PTEs. On top of this TEIs receive a base grant payment of $1000.00 per EFTS for the first 250 EFTS. ($250 000.00). PTEs are not eligible for this. This amounts to a funding difference of between 19.5 and 24% for PTEs under 250 full time students. Under the Fees Maxima policy there will no longer be any chance for PTEs to recoup this shortfall by charging higher fees. To make matters even worse, PTEs then pay tax, which TEIs do not, meaning even greater financial resources for TEIs.

The Associate Minister of Education (Tertiary Education), Hon Steve Maharey, has praised the PTE sector for its innovation and adaptability. He is absolutely correct, however this innovation and adaptability is only possible because of PTEs small size, access to cash, closeness to industry, and managements ability to react. Almost all these criteria are removed, by very low Fee Maxima, because the management’s ability to manage their own business has been removed. An important point is that for every successful innovation achieved by PTEs there are a multitude of innovations that fail, costing money. Many innovations within PTEs are performed at cost, simply because of the needs and expectations of students, and without the service, student achievement is reduced. One example is numeracy and literacy innovations, which are essential for our “knowledge economy”.

PTEs have correctly been credited with the recent major increase in Tertiary Education Participation Rates, putting New Zealand at or near the top for OECD countries. This is by bringing in sectors of the community that could not or would not cope with the larger impersonal TEI structure. Included are Maori and Pacifika as well as many non achievers who are perceived as failures in the school system. They have come to PTEs for their ability to meet individual student needs, their diversity the different learning styles catered for in PTEs, and also their small size, meaning they can operate in small regional communities where TEIs can not economically operate. This very diversity that PTEs have been praised for is now at serious risk, because of the PTEs inability to charge fees that reflect the costs of their operation. Time and history has already proven the TEIs cannot or will not cater to these niche student markets. How can these students be allowed to be alienated by Fee Maxima, at a time when New Zealand is trying to achieve a knowledge economy.

PTEs achieve high success rates, in terms of academic outcomes and employment, with what is in many cases students who would not or could not achieve within the TEI sector. This is with small student orientated PTEs who are dedicated to student needs. These are the very PTEs who are at risk.

By setting different Fee Maxima for TEIs and PTEs the majority of these issues can be resolved. PTE students have not asked for lower fees, and enrol at PTEs as a result of researched choice, and choose to pay higher fees for advantages such as: Staying in a small home town to train and educate themselves. Personalised Training programmes. Faster more cost effective achievement of skill and Qualifications due to compressing course lengths by extending hours and removing semester breaks. Qualifications and Skills not taught at TEIs.

A recent survey of members indicated this policy is likely to see the demise of up to 8% of members.

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