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TEC Decides on Fee Exemptions

23 December 2005

TEC Decides on Fee Exemptions

The Tertiary Education Commission (TEC) has turned down Massey University's application to raise fees above 5 percent next year.

Massey, along with the Dunedin College of Education and Christchurch College of Education, applied to the TEC for an exemption to the Annual Fee Movement Limit (AFML) in order to raise their fees between 5 and 10 percent. Massey also applied for an exemption to the Postgraduate Fee Increase Limit in order to raise fees by more than $500.

All three applications were declined for the same reason - they did not demonstrate exceptional circumstances. The two college applications were considered by TEC Commissioners last week while Massey's application, which was more complex, was decided this week.

Introduced in 2003, the AFML policy restricts fee increases to up to 5 percent per course, per year or to the appropriate maximum limit - whichever is lower. "The intention of the policy is to ensure that fees are affordable for students, while allowing tertiary education providers sufficient flexibility to meet their financial circumstances," TEC's Board of Commissioners chair, Russell Marshall says. "We realise this won't be a universally popular decision but it was the right one to make based on the information provided to us. Because exceptional circumstances were not demonstrated, Commissioners could not approve an increase over and above the 5 percent limit." The TEC considered the applications against three principles, outlined below, to determine whether a special case for an exemption has been demonstrated.

"Applications are looked at on an 'on-balance' basis. This means that an institution will not necessarily have to meet all three principles but will have to demonstrate exceptional circumstances," Russell Marshall says.

The TEC also considered submissions from relevant students' associations, regarding applications for exemptions in relation to the assessment criteria. Institutions and relevant student bodies may seek review of a decision, but only on procedural grounds.

Background Information

This year's exemption principles were:

* The cost of providing the course(s) is not being met by the income from the course(s);

* The organisation is unable to cross-subsidise the course(s) from its total financial surplus while remaining financially viable; and

* Not increasing fees would compromise progress towards the achievement of the Tertiary Education Strategy (TES) and the Statement of Tertiary Education Priorities (STEP), or other critical elements of the tertiary reforms. (In this context, the TEC must have particular regard to situations where not increasing the fees would severely restrict access to a particular programme of study or for a segment of the student population e.g. regional access.)

In 2004 (for 2005 fee rises) Otago and Auckland universities (both for medical sciences) and Dunedin and Christchurch colleges of education successfully applied for exemptions.

In 2003 (for 2004 fee rises), three institutions were successful - Dunedin College of Education, Wellington College of Education, University of Otago (Arts, Social Sciences, Law, Medicine and Dentistry).


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