Profile & Trends 2012: New Zealands Tertiary Education Sector
This is edition 15 in an annual series on the tertiary education sector.The key findings for 2012 were:
- 422,000 students were enrolled in formal study programmes in 2012, including 47,700 international students.
- Enrolments in degree and higher qualifications by students aged 18 to 24 years continued to increase.
- Enrolments in non-degree qualifications continued their downward trend.
Author(s): Tertiary Sector Performance Analysis, Ministry of Education.
Date Published: October 2013
This report is available as a download (please refer to the 'Downloads' inset box). For links to related publications/ information that may be of interest please refer to the 'Where to Find Out More' inset box.
Key tertiary education trends
Tertiary education outcomes for young New Zealanders
More information to help people choose their study plans has been released in 2013.1 The study Moving on up is based on what all young tertiary-qualified New Zealanders did and earned during the years ended March 2009 and March 2010. The evidence in this report confirms previous research findings. 2
Earnings increase with the level of qualification completed. Five years after finishing study, the median earnings of young people who completed a bachelors degree were 53 percent above the national median and 46 percent above the median earnings of young people with a level 1 to 3 certificate.
Employment rates increase with the level of qualification gained. For example, in the first year after study, 56 percent of young bachelors graduates were in employment and 38 percent were in further study. Of young people who had completed a level 1 to 3 certificate, 37 percent were in employment and 48 percent were taking more study.
Very few young people who had completed a level 5 to 7 diploma or higher qualification were on a benefit in the first five years after study. The benefit rate was 4 percent for graduates with a level 5 to 7 diploma and 2 percent for those with a qualification at bachelors level. The benefit rate was around 10 percent for those who graduated with certificates at level 1 to 3.
Earnings vary by field of study. For example, the median earnings of young graduates with bachelors degrees in management and commerce were $68,000 five years after leaving study, compared to $45,000 for a graduate in graphics and design. The comparable figure for an accountancy graduate was $64,000 and for electrical engineering graduates the figure was $63,000. Engineering graduates with an honours degree had median earnings of $65,000 after five years.
Chapter 4 provides more findings on the outcomes for young graduates after completing a qualification.
Delivering better public services
In 2012, the government set 10 targets for better public services, including two education targets aimed at boosting skills and employment.
- Increase the percentage of 18 year-olds with NCEA level 2 or an equivalent qualification.
- Increase the percentage of the population aged 25 to 34 years with a level 4 or higher qualification.
The first of these targets aims to have 85 percent of 18 year-olds achieve an NCEA level 2 or an equivalent qualification by 2017. In 2012, the proportion was 77 percent.
The second tertiary education target aims to have 55 percent of the population aged 25 to 34 years with a level 4 or higher qualification by 2017. From 2011 to 2012, the proportion increased from 51.8 percent to 52.6 percent.
Figure 1: New Zealanders aged 25 to 34 years with a level 4 or higher qualification (December years)
Increasing the proportion of the population aged 25 to 34 years with a level 4 or higher qualification to 55 percent by 2017 is an ambitious target because of the increasing size of the population in this age group over the next five years, falling net migration of skilled young people and modest growth in enrolments at higher levels.
Actions being undertaken to achieve this target include increasing student enrolments in the younger age groups at level 4 and above, improving educational quality and achievement - especially through clearer pathways with a focus on employment - and providing better information on educational performance and outcomes.
In 2013, the New Zealand Qualifications Authority approved the award of Vocational Pathways, as part of the New Zealand Qualifications Framework, from 2014. That is, when students achieve the National Certificate of Education Achievement with enough credits from the standards recommended in the pathways, this will be reflected on their record of achievement held by the New Zealand Qualifications Authority. This means that Vocational Pathways are recognised as a part of the qualification system, helping to clarify pathways for learners.
New Zealand's tertiary education sector makes a wide range of learning available, from foundation skills to doctoral studies. Through its research activities, and the skills it imparts, the sector is a major contributor to the nation's innovation.
A key feature of the New Zealand system is the integration of funding and provision across vocational education and training, higher education, workplace training, adult and community education, and tertiary education that takes place within the senior secondary school.
Funding covers all levels of tertiary education, from second-chance education to doctoral studies. Funding through the student achievement component supports the costs of teaching and learning. From 2011, funding that supports tertiary education organisations' capability, to enable them to focus on their core roles in the tertiary education system, has been incorporated into the student achievement component.
Industry training provides workforce skills to a significant number of people. This training is designed by, and delivered in conjunction with, industry, and leads to nationally recognised qualifications.
There are also funds that provide fully subsidised education and training to disadvantaged groups such as those at risk of unemployment.
The government funds such learning as foundation education, adult literacy and English for speakers of other languages. It also provides funding to providers of adult and community education.
The results of learning through tertiary education can be viewed in terms of improving competencies and attainment, or progress towards attainment, of recognised qualifications. A competency includes the skills, knowledge, attitudes and values needed to perform important tasks. The literacy, language and numeracy programmes build adults' fluency, independence and range in language, literacy and numeracy so that they can use these competencies to participate effectively in all aspects of their lives.
The New Zealand Qualifications Framework provides a standard structure for naming and describing qualifications across levels and types of provision. It incorporates all tertiary qualifications, including the 10 levels of qualification from entry-level certificates to doctorates.
Tertiary education enrolments in 2012
There were 422,000 students enrolled in formal tertiary education3 at providers in 2012. Of the students in formal tertiary study of more than one week's duration, 47,700 were international students, 9,870 were in Foundation-Focused Training Opportunities, 8,920 were in Youth Guarantee. There were also 2,340 senior secondary students studying via trades academies in 2012. Of the students in formal tertiary study of less than one week's duration, 16,500 were in the Secondary-Tertiary Alignment Resource (STAR) programme and 6,370 students were in other short courses.
Figure 2: Trends in formal study by level and setting4
Domestic tertiary education students continue their shift from lower- to higher-level qualifications
Formal enrolments by domestic students fell from 2011 to 2012, due to fewer enrolments in non-degree qualifications by students aged 25 years and over.5 While enrolments in non-degree qualifications also fell for younger students - those aged 18 to 24 years - enrolments in degree and higher qualifications by this age group increased.
Figure 3: Domestic tertiary education students by level of study
This continued upward trend in higher-level enrolments by young people aligns with the government's tertiary education priority of having more young people achieve qualifications at level 4 and above. It also reflects increasing school achievement, with more young people qualified to study at higher tertiary education levels.
Enrolments by people aged 18 and 19 years increased in 2012, even though the New Zealand population aged 18 and 19 years declined. In part, this reflects the continuation of weak employment conditions for young people, even though the New Zealand economy expanded in 2011 and 2012.
From 2011 to 2012, there were fewer enrolments in degree and higher qualifications by people aged 25 years and over. These enrolments also fell from 2010 to 2011.
When converted to equivalent full-time student units, domestic enrolments remained stable in 2012. That is, domestic students continued to take on higher study loads in 2012 (on average), following a trend that began in 2007.
Figure 4: Domestic equivalent full-time student units
International tertiary education students
The upward trend in international students continued in terms of equivalent full-time student units, while the international student headcount remained stable at 47,700.
Figure 5: International tertiary education students by level of study
In 2012, 162,000 qualifications were completed, 18,500 by international students. Of the 143,000 qualifications completed by domestic students, 43,700 were bachelors or higher qualifications and 99,300 were non-degree qualifications.
Figure 6: Number of qualifications completed by formal domestic students by level of study6
Ka Hikitia - Managing for Success
Raising achievement for Māori students is a key priority and the next phase of Ka Hikitia has started for the period 2013 to 2017.
The participation rate of Māori aged 18 to 24 years in bachelors and higher qualifications increased from 11 percent in 2011 to 12 percent in 2012. The participation rate of this age group at level 4 and higher was 22 percent in 2012, up from 21 percent in 2011. In comparison, the participation rate of all domestic students in level 4 and higher qualifications was 31 percent in 2012.
Pasifika Education Plan
The vision of the Pasifika Education Plan for the years 2013 to 2017 is to see 'all Pasifika learners participating, engaging and achieving in education, secure in their identities, languages and cultures and contributing fully to Aotearoa New Zealand's social, cultural and economic wellbeing.'
The participation rate of Pasifika aged 18 to 24 years in bachelors and higher qualifications increased from 14 percent in 2011 to 15 percent in 2012. Participation by this age group at level 4 and higher was 27 percent in 2012. This compared to 25 percent in 2011.
There were 139,000 industry trainees in 2012, including 15,300 modern apprentices. Since 2009, the number of trainees has declined, while, before this, the number of trainees followed a strong upward trend.
A number of factors have led to the decline in industry trainees since 2009. These included the:
- removal of inactive trainees from funded training in 2010
- implementation of new operational funding rules from 2011 that place emphasis on performance rather than just enrolments, and
- weak employment conditions since 2009.
In addition, there has been a change in the way industry training activity is recorded with the implementation of new industry training data collection from 2011 onwards.
The way industry training achievement information is collected also changed in 2011. This means that counts before 2011 may not be strictly comparable with those for earlier years.
New Zealand's fourth tertiary education strategy
New Zealand's fourth strategy, the Tertiary Education Strategy 2014-2019, will be published later this year. The strategy is expected to build on the reforms that began with the creation of the Tertiary Education Advisory Commission in 2000 and the changes to systems for planning, funding, monitoring and quality assurance that took effect from 2008.
It is also expected that the strategy, like its predecessors, will align the tertiary sector more closely with national development goals. The tertiary education sector can help build a more competitive and productive economy through ensuring that the system has the quality and capability to provide and develop relevant skills of New Zealanders. In turn, this will lead to meaningful employment for people and help businesses compete, both locally and internationally.
The draft Tertiary Education Strategy 2014-2019 is expected to be available from the Ministry of Education's website in October 2013. Following its release, the public consultation on the strategy is expected to take 6 weeks.
Early enrolment indicators for 2013
Early indications7 are that the number of students enrolled in formal study8 at tertiary education providers will decrease between one and two percent from 2012 to 2013. In terms of equivalent full-time student units the decrease is estimated to be slightly smaller. This means that the average study load of students is expected to continue to rise - an upward trend which started in 2007.The latest figures indicate that domestic enrolments will fall in 2013, while the number of international students will remain stable.
Although the rate of unemployment for under-20-year-olds was lower in the March 2013 quarter than in the December 2012 quarter, it was higher than in the March 2012 quarter. However, the proportion of under-20-year-olds not in education, employment or training (NEET), who are most at risk of poor outcomes, was lower in the March 2013 quarter than in the March 2012 quarter.
Among the ethnic groups, Pasifika are the only group likely to continue to increase their student numbers. From 2002 to 2012, the number of enrolments by the Pasifika group has averaged an increase of 4.1 percent per year.
Figure 7: Percentage change in the number of formal students (including international students) by qualification level
- Honours includes bachelors with honours degrees and postgraduate certs/ dips.
Enrolments by students aged under 20 years are also expected to increase from 2012 to 2013 even though the population aged 18 to 19 years has been decreasing in number. The weak employment conditions for this group continued in the early part of 2013. Although the rate of unemployment for people aged 15 to 19 years was lower in the March 2013 quarter than in the December 2012 quarter, it was 3 percentage points higher than in the March 2012 quarter.
Looking at the latest change in formal enrolments by qualification level shows that the number of students is likely to decrease from 2012 to 2013 at most levels, except for postgraduate qualifications.
The most substantial decrease is expected to be for level 5 to 7 diplomas. The latest figures also indicate that the number of bachelors-degree students will decrease in 2013 - for the first time since 2007. This decrease is likely to be for older students. However, the early indications suggest that enrolments by 20 to 24 year-olds will also decrease in 2013, even though the population aged 20 to 24 years is expected to increase. In contrast, the population aged 18 to 19 years is expected to decline in 2013, while enrolments by this group are expected to increase. This may be due to the current weak employment conditions for this group. Enrolments by students aged under 18 years are also expected to increase in 2013.
The number of students in level 4 certificates is estimated to decrease slightly from 2012 to 2013, with a larger decrease in the amount of study at this level.
Tertiary education funding in 2013
In May 2013, government announced a number of funding initiatives (refer also to chapter 18). These included an additional:
- $9.34 million over four years to increase tuition subsidy funding rates for priority engineering courses , up by 2 percent
- $17.9 million over four years to increase funding rates for science tertiary education , up by 2 percent
- $28.7 million over four years to eliminate differences in funding policy treatment between public and private providers
- $21.5 million over four years to allow highly-performing private training establishments to deliver an additional 1000 EFTS that do not attract tuition subsidies in their approved investment plans
- $10.7 million over four years to extend the 99-105 percent over-delivery tolerance bands beyond 2013 to provide more flexibility in the tertiary system, and
- $35 million over four years to expand the number of dedicated Māori and Pasifika trades training places available from 600 to 3000 by 2015 and provide additional support for learners.
The government also announced a number of savings initiatives during 2013. These included savings of:
- $18.7 million in operating expenditure and $20.2 million in capital expenditure through extending the student loan and allowance stand-down period for permanent residents and Australian citizens, and
- $7.97 million in operating expenditure and 1.75 million in capital expenditure through removing student allowances eligibility for those aged 65 years and over.
Tertiary education research in 2013
Performance-Based Research Fund
The report on the Performance-Based Research Fund 2012 Quality Evaluation came available in May 2013.
An analysis of the three quality evaluations9 of the Performance-Based Research Fund carried out in 2003, 2006 and 2012, showed that:
- there was a statistically significant increase in the average quality of research between 2003 and 2012
- the rate of increase between 2003 and 2006 was sustained between 2006 and 2012
- the improvements between 2003 and 2012 in the three component scores, that make up the average quality score, were all statistically significant
- the improvements in the scores for 'peer esteem' and 'contribution to the research environment' were greater than the improvement in the 'research output' score.
- This may be due to both better performance and/or clearer and more effective presentation of material provided in the evidence portfolios, and
- the overall improvement in quality aligns with the improvements in the citation rates of research by New Zealand tertiary education institutions since the introduction of the Performance-Based Research Fund.
The above findings suggest that the increases in the quality measures over the three evaluations of the Performance-Based Research Fund reflect a true lift in performance.
As part of a broader review of the Performance-Based Research Fund, the Ministry of Education is currently developing a consultation proposal for changes to the fund. The proposal will focus largely on operational changes aimed at making the fund simpler and reducing the transaction costs for researchers, tertiary education organisations and the Tertiary Education Commission.
The discussion paper containing the proposal became available from the Ministry of Education website in August 2013. The public consultation will provide an opportunity for views from a wide range of stakeholders to be considered as part of the review process.
Review of centres of research excellence
In March 2012, the government initiated a funding review of the centres of research excellence. The review was carried out in 2012 and 2013 by the Ministry of Education, with the support of the Tertiary Education Commission and the Ministry of Business, Innovation and Employment.
The review considered how to strengthen the role of centres of research excellence in supporting innovation through knowledge and technology uptake. It also looked at ways to strengthen the monitoring and assessment of the centres and their funding.
Final decisions on the review were confirmed in August 2013 and government confirmed the funding objectives for the centres. It also agreed to changes designed to further improve the performance of centres, including a:
- new policy statement
- mission statement that incorporates the purpose and characteristics of centres of research excellence, and
- new performance framework that includes reporting requirements.
Cabinet also agreed to increase funding by 10 percent, as signalled in the 2013 Budget announcements.
Industry training in 2013
Following a review of industry training operational rules in 2011 and 2012, the government announced a suite of changes to further improve the performance of the industry training system in January 2013. The proposals aim to develop the industry training system so that it is:
- well connected to industry with high employer buy-in
- educationally sound
- coherent with the wider tertiary system, and
- delivers value for money for employers and the government.
Industry training organisation mergers
On 1 May 2013, the Forest Industries Training Education Council (FITEC) merged with Competenz.
In July 2013, Infratrain New Zealand announced an agreement in principle to merge with Electricity Supply Industry Training Organisation.
Chances to financial support for students in 2013
- From 1 January 2014, the student loan and allowances stand-down period for permanent residents and Australian citizens will be extended to 3 years. Exempt from this requirement are persons who hold refugee status, protected persons status, or persons sponsored by a family member who held refugee status or protected person status when they entered New Zealand. Transition arrangements will be in place for some students.
- From 1 January 2014, student allowances limits for those aged 40 years and over will be reduced from 200 weeks to 120 weeks. The new 120-week limit is around three academic years of support and transition arrangements will be in place for 2014.
- From 1 January 2014, student allowance eligibility for those aged 65 years and over will be removed. Transition arrangements will be in place during 2014. Students receiving New Zealand Superannuation or the Veteran's Pension are ineligible for student allowances.
Student Loan Scheme:
- Overseas-based borrower repayments are being adjusted through the introduction of fixed repayment obligations and two new repayment thresholds for these borrowers. These changes will reduce repayment times for compliant overseas-based borrowers and take effect from 1 April 2014.
- Changes made in June 2012 restricted access to the Student Loan Scheme for fees-free study. Budget 2013 allocates administrative funds for full implementation of this policy by 1 January 2014.
- The ability to arrest non-compliant borrowers who have knowingly defaulted on an overseas-based borrower repayment obligation and are about to leave the country, will be introduced from 1 April 2014. Similar provisions exist under the Child Support Act.
- An ongoing information-sharing agreement between Inland Revenue and Internal Affairs that allows contact details from passport applications to be shared will take effect from 1 April 2014. This agreement will apply to overseas-based borrowers who are in default.
- From 1 January 2013, the cost of lending calculations for the Student Loan Scheme was shifted from a 'borrower account' basis to a 'year of lending' basis.
- Mahoney, P., Park, Z. & Smyth, R. (2013), Moving on up - what young people earn after their tertiary education , Wellington: Ministry of Education.
- See also: Occupation Outlook Reports 2013.
- The study of qualifications on the New Zealand Qualifications Framework. Learners in Youth Guarantee and Foundation-Focused Training Opportunities are required to achieve unit standards which count towards qualifications on the New Zealand Qualifications Framework. Data excludes students in non-government-funded providers.
- A new industry training data collection was introduced in 2011. Data from 2011 onwards is not strictly comparable with that collected in previous years. Workplace-based training is jointly funded by the government through the Industry Training Fund and by industry through financial and in-kind contributions.
- The government's move to a capped funding system for tertiary education institutions, which began in 2008, has led to the preferences of the Tertiary Education Commission, tertiary education providers and tertiary education consumers to continue to shift away from non-degree qualifications, especially for older students, a trend that started in 2005.
- Due to the changes made to the collection of completions data in 2007, some private training establishments were not able to supply information. In 2007, the number of students completing a qualification has been adjusted for the missing data returns, however, the total number of qualifications completed in 2007 remains lower.
- The analysis in this section is based on the enrolments made in the period from January to April 2013, compared with the enrolments made in the period from January to April 2012. It represents about three-quarters of the annual enrolments data and needs to be interpreted as provisional information that is subject to change when the final data comes available in 2012.
- Study towards a qualification of more than one week's duration on the New Zealand Qualifications Framework.
- Smart, W. and Engler, R. (2013), In pursuit of excellence - analyzing the results of New Zealand's Performance-Based Research Fund quality evaluations , Wellington: Ministry of Education.
Where to find out more
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