Opinion: Take from the Poor, give to the Rich: Why Fees Free Needed to Go

Saad Aamir 

Fees Free was a policy that covered the first year of tertiary study, providing up to $12,000 in tuition payments per student at a cost of roughly $350 million a year to the taxpayer. It was presented as a policy that would improve equity and open the doors of higher learning for disadvantaged people. In 2024, the National-led coalition shifted the policy from the first year of study to the last. Then, on 8 May 2026, Winston Peters and Nicola Willis announced that the scheme would be scrapped entirely in the 2026 Budget.

The disestablishment of Fees Free has drawn scathing backlash from student associations like VUWSA, advocacy groups, and many students. This sentiment is unjustified. Fees Free failed to provide an adequate incentive for students to attend university and ultimately functioned as a wealth transfer from the poor to the rich. That $350 million a year would have been far better spent elsewhere: for students, and for Aotearoa at large.

Fees Free, Same Enrolments

The rationale behind Fees Free was rather simple: by removing the cost of a year of tuition, the government hoped to encourage more young New Zealanders—particularly those from lower-income backgrounds—to enrol in tertiary study. The reasoning went that fees were a barrier, and if you removed the barrier more New Zealanders would attend university. 

The fact of the matter is that this policy never led to more enrolments. It failed to increase access to tertiary study for poorer New Zealanders. This is not merely opinion; it is backed by credible data analysis from a variety of sources. The AUT Policy Research Institute Study from May 2026 and the Ministry of Education Supplementary Analysis Report from January 2025 found that Fees Free did not cause increased enrolments.

If the facts have not convinced you, the underlying logic should. New Zealand's student loan scheme is, quite frankly, among the fairest in the world. It covers tuition upfront, charges no interest if you stay in the country, and only requires repayments once you are earning above a set income threshold. No student is ever asked to pay out of pocket. No graduate is ever asked to pay before they can afford to. 

And the rewards for taking up this offer are substantial. The government already subsidises roughly two-thirds of the cost of tertiary study, and on average graduates earn over a million dollars more over their lifetime than those without a degree. So let us be clear about what Fees Free was actually doing. The incentive it claimed to create already existed. The barrier it claimed to remove was never there. It never opened any doors that were not already open.

At this point, you may be bristling. Many students do genuinely struggle to make ends meet. But that struggle is not caused by tuition fees. It is caused by living costs: rent, groceries, power, transport. Fees Free did nothing to address any of that. It solved a problem that did not exist while leaving the real one untouched.

Money for those who needed it least

The AUT study identifies that it is because of brutal living costs and deep inequalities in school achievement and family resources that the people who make it to university are, on average, more privileged than those who do not. That is unfortunate. It is unfair. But it is reality. And it is fundamentally why Fees Free was a wealth transfer from the poor to the rich.

Fees Free was a universal policy, available to every eligible student regardless of household income. That matters, because lower-income New Zealanders pay tax too. That tax contributes to a public pool that funded a programme whose benefits flowed disproportionately upward: to the tuition of students who can afford the rent on Kelburn flats, and away from those who could not. 

Fees Free was an untargeted, inequitable policy. It took from the poor and gave to the rich. 

What is the alternative?

It has been disheartening to watch advocacy groups and students lobby so aggressively to reinstate Fees Free. Student associations, student magazines, advocacy groups, and each of us individually wield real political power. This article is not meant to discourage student activism. The opposite, in fact. It is meant to ask that we be careful with how we spend our resources: our time, our political capital, the space we take up on social media.

Those resources would be far better spent advocating for policies that actually help the most marginalised and vulnerable. Increase student allowances. Push for paid placements. Fight for affordable student housing. These are the things that would make a real difference to the students who are worst off. 

And even if none of that moves you, scrapping Fees Free is still the right call. $350 million a year is a lot of money. Spent on health, education, or social security, it goes to the people and services that need it most. Spent on Fees Free, it ends up in the pockets of students who do not need it, including students like me. If we care about the vulnerable as much as we care about ourselves, we cannot in good conscience keep arguing that Fees Free ought to be reinstated.