News

NZ university degrees represent value for money

21 April 2005

Source:	NZVCC Electronic News Bulletin Vol. 5 No. 6 20 April 2005

The NZVCC refutes an international study claiming that New Zealand degrees are among the most expensive in the world.

The appearance of another international study on the affordability of higher education this week prompted the usual alarmist headlines; 'Kiwi degrees among the most pricey' and 'Varsities among world's dearest'. However, a quick check of some of the data sources for the study – conducted by the Washington-based Educational Policy Institute – revealed they were largely dated. The NZVCC issued a media statement which pointed out that New Zealand university graduates had qualifications that would increase their employment, career and earning prospects. "What is important is the local context. In New Zealand, a university degree represents value for money in terms of a graduate's lifetime earning potential - an investment in a university degree is one that pays off," the statement said.

Acting Education Minister David Benson-Pope also moved to counter news media interpretation of the study findings, with a statement headed 'International survey out of date, and seriously flawed'. Like the NZVCC, he noted that the study based most of its findings about this country on data from the University at Buffalo International Higher Education Finance and Accessibility Project, which was also incorrect. The level of fees was overstated, and the data based on figures from 2000 and 2001. The study ignored the effect of major changes in student support policy and assistance introduced since that time, with time periods mixed up. Recently released OECD data showed that EPI had understated New Zealanders' incomes by 10 per cent and overstated the incomes in countries like Canada, Japan and Ireland. The institute had also misinterpreted average student loans data from the Student Loan Scheme annual report, again to New Zealand's disadvantage.

The NZVCC media statement said the Committee's own research confirmed that a university graduate here commanded a premium in the employment market. An annual survey of graduate destinations conducted by the NZVCC showed that first-degree university graduates entered full-time employment at higher levels of remuneration than other people commencing their careers. In fact, university graduates in this country had higher labour force participation than the rest of the working age population – 85% as opposed to 67%. Further, unemployment for university graduates was considerably lower than non-graduates. Over the past decade the unemployment rate for people aged between 25 and 35 with degrees and postgraduate qualifications was 3.9 per cent. Over the same period the rate for those with other tertiary qualifications was 5.8 per cent, those with just school qualifications 6.0 per cent and those with no qualifications, 15.3 per cent.