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Last updated 22 May 2025
Last updated 22 May 2025
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The Government’s Budget includes initiatives for the tertiary sector that provide targeted increases to tuition and training subsidies and fund a forecast increase in enrolments for 2025 and 2026. Other initiatives support the transition to the redesigned vocational education and training (VET) system and reprioritise funding within Vote Tertiary Education.
The Government’s Budget includes initiatives for the tertiary sector that provide targeted increases to tuition and training subsidies and fund a forecast increase in enrolments for 2025 and 2026. Other initiatives support the transition to the redesigned vocational education and training (VET) system and reprioritise funding within Vote Tertiary Education.
Key highlights
$111.4 million for enrolment increases in 2025 and 2026
3% tuition subsidy increase for targeted priority provision at Levels 1–10 on the New Zealand Qualifications and Credentials Framework (NZQCF) from 1 January 2026
1.75% tuition subsidy increase for targeted priority provision at Levels 7–10 on the NZQCF from 1 January 2026
Funding for the Student Loan Scheme to enable providers to increase fees by up to 6% in 2026
Funding to support the continuity of standards-setting functions during the transition from Workforce Development Councils (WDCs) to the new Industry Skills Boards (ISBs)
Reprioritisation of funding within Vote Tertiary Education
Summary of announcements for tertiary education
Budget 2025 provides $111.4 million in additional funding over the next four years to support growing the domestic pipeline of students. This funding will enable the Tertiary Education Commission (TEC) to fund 99% of forecast tertiary education and training enrolments in 2025 and 2026. It also funds approximately 175 additional Youth Guarantee equivalent full-time students (EFTS) per year.
The Government has announced two initiatives designed to help providers manage cost pressures and maintain the quality of their delivery in targeted fields, and further invest in priority areas.
The first initiative provides $212.5 million of operating funding over the next four years to increase tuition and training subsidies by 3% from 1 January 2026, for targeted priority provision at Levels 1–10 on the NZQCF and other foundation education. Targeted areas include:
All foundation education funds, excluding the Māori and Pacific Trades Training Fund (MPTT)
Areas aligned with trades, agriculture, engineering and health sciences at Levels 3–7
At Levels 7–10 (degree):
Science and clinical psychology
Medical imaging
Medical laboratory science
Optometry
Medical radiation therapy
Veterinary science
Medical undergraduate
Mathematics
Nursing degree
Agriculture and horticulture
Priority engineering
Initial teacher education.
A second initiative provides an additional $64.4 million in funding over the next four years to increase tuition and training subsidies by 1.75% from 1 January 2026 for targeted priority provision at Levels 7–10 (degree and above) on the NZQCF. This follows the end of the time-limited 4% increase to tuition subsidies introduced in 2023. Priority areas targeted by the Government are:
Science and clinical psychology
Medical imaging
Medical laboratory science
Optometry
Medical radiation therapy
Veterinary science
Medical undergraduate
Mathematics
Agriculture and horticulture
Priority engineering
Initial teacher education
A further initiative funds forecast costs to the Student Loans Scheme from increasing fees by up to 6% in 2026. In June this year, the Minister for Universities will consult on the proposed Annual Maximum Fee Movement (AMFM) rate of 6% in 2026 through a public consultation notice published in the New Zealand Gazette.
To support the continuity of standards-setting functions during the transition to the redesigned vocational education and training system, Budget 2025 provides up to $15 million for WDCs to ensure that they can continue to perform their statutory functions until their disestablishment on 31 December 2025.
From 1 January 2026, Industry Skills Boards (ISBs) will receive $30 million per annum in dedicated funding, reprioritised from within Vote Tertiary Education, to support delivery of standards-setting and their other legislated functions. Budget 2025 provides a one-off $10 million in funding for 2025/26 to assist with transition costs, including the establishment of ISBs.
Funding of up to $10 million per annum to support strategically important vocational education and training (VET) provision will be available for institutes of technology and polytechnics during the transition from Te Pūkenga to the new VET system. This is a transitional fund and will be available for two years, over 2026 and 2027.
In line with the Government’s priority to deliver effective and fiscally sustainable public services and the need to focus on core activities in the current constrained fiscal environment, some funding has been reprioritised towards other areas of tertiary education.
Further information
For Budget announcements, see Latest from the Beehive – Beehive.govt.nz.
For information on 2026 funding rates, see Funding rates by year.
