Fees-Free “Failed to Deliver”: Lowest University Uptake Among Disadvantaged in Final Year of Labour Policy

By Lions Roar Aotearoa Education & Policy Desk

WELLINGTON, NEW ZEALAND (Thursday, January 29, 2026) — New data has revealed that the final year of the Labour-led government’s flagship “first-year fees-free” policy saw the lowest university participation rate among disadvantaged students in years, raising sharp questions about the effectiveness of the multi-billion dollar initiative.

Despite the policy’s core aim of breaking down financial barriers for low-decile and underrepresented students, the figures suggest that the “universal” nature of the subsidy may have failed to reach those who needed it most before its recent overhaul by the National-led coalition.

📉 The Data: A Widening Gap

The latest enrollment statistics for the 2024–2025 period highlight a concerning trend in New Zealand’s tertiary sector.

Record Lows: University uptake among students from the lowest socio-economic quintiles dropped to its lowest point since the policy’s inception.
The “Middle Class” Subsidy: Critics argue the data proves the policy primarily benefited students who were already planning to attend university, rather than incentivizing those from disadvantaged backgrounds.
Cost of Living Factor: Education analysts suggest that while tuition was free, the skyrocketing cost of rent, food, and transport remained the true barrier for low-income students—barriers that a fees-free first year did not address.

⚖️ The Shift to “Final-Year” Fees-Free

The release of this data comes as the National-ACT-NZ First coalition transitions the scheme to a “Final Year Fees-Free” model, which began implementation this year.

Labour’s Defense: Supporters of the original policy argue that it simplified the transition to tertiary study and that the decline in low-decile uptake is due to a wider cost-of-living crisis and a strong labor market luring school-leavers into immediate work.
National’s Stance: The government has used these figures to justify the shift, arguing that rewarding completion (paying for the final year) is a better use of taxpayer money than a “blank check” for the first year.

📊 Participation Rates: First-Year Fees-Free (2018–2025)

Year	Overall Uptake	Low-Decile Uptake (%)	Status
2018	High	15.2%	Policy Launch
2021	Moderate	14.8%	COVID-19 Impact
2024	Declining	12.1% (Record Low)	Final Year of Old Model
2026	TBD	TBD	New “Final Year” Model

💬 “Money Alone Isn’t Enough”

Education experts are now calling for a more “targeted” approach to tertiary support.

“What this data tells us is that removing the cost of fees is just one piece of the puzzle. If a student can’t afford a room in a hall of residence or the bus fare to get to campus, ‘free fees’ are irrelevant. We need to look at student allowances and regional support if we actually want to close the equity gap.”