Part 3: Ongoing impacts of the Covid-19 pandemic

Tertiary education institutions: What we saw in 2021.

3.1
In this Part, we discuss:

3.2
The Covid-19 pandemic continued to impact tertiary education institutions in 2021. These included financial impacts because border restrictions reduced the number of international student enrolments. To mitigate this significant reduction, the number of courses and programmes delivered online and offshore increased.

3.3
The Covid-19 pandemic also affected the well-being of students and tertiary education staff, and course completion rates.

3.4
As part of its response to the Covid-19 pandemic, the Government has provided direct support to students through relief funds and indirect support through developing and implementing a recovery strategy for international education.

The effect of border restrictions on international student enrolments

3.5
A report by the Ministry of Education, The impact of Covid-19 on tertiary education in New Zealand: Initial impact on participation, shows that the number of international students decreased from 54,660 in 2019 to 36,770 as at August 2021 (a decrease of 33%).

3.6
However, the number of international students at tertiary education institutions increased by 55% between 2008 and 2015. It then remained at about the 2015 level for the next four years.

3.7
The report also shows that the number of international students enrolling in tertiary education institutions for the first time decreased by 29% between 2019 and 2020. There was a further decrease of 48% between 2020 and 2021.25

3.8
The number of domestic students in formal qualifications increased significantly in 2021 after an extended period of declining or flat enrolments. The number of domestic students in August 2021 was 345,910. This was an increase of 11% compared to 2019, when the number of domestic student enrolments was 310,970.

3.9
Full-year enrolment data shows that, before the COVID-19 pandemic, there was an extended period where participation by domestic students was decreasing as economic conditions improved after the Global Financial Crisis.

3.10
Between 2011 and 2019, the number of domestic students decreased by 14% and the number of equivalent full-time students (EFTS) decreased by 12%. This contrasts with the number of international students, which increased by 55% between 2008 and 2015, and then remained around the 2015 level over the next four years.

3.11
The increase in the number of domestic students between 2019 and August 2021 was almost double the number that international students decreased by during that period.

3.12
We understand that, generally, international students are significantly more profitable for tertiary education institutions than domestic students. Therefore, increases to domestic student numbers only partially offset decreases in international students in financial terms.

3.13
There were increases in participation of domestic students at all levels of study between 2019 and 2021. The largest percentage increase was at master's level, which increased by 23% between 2019 and 2021, followed by Level 5-7 certificates and diplomas.

Wānanga

3.14
The impact of border restrictions on tertiary education institutions varied in 2021. Because wānanga do not have many international students, the restrictions did not impact them significantly. In 2019, there were a total of 15 international students at all three wānanga. This dropped to 13 in 2020 and to 7 in 2021.26

Universities

3.15
Although universities felt the impact of decreased international student enrolments, it was not as significant as anticipated. International students decreased by 11% between 2019 and 2020, then decreased by a further 25% between 2020 and August 2021. Overall, the number of international students decreased from 54,660 in 2019 to 36,770 in August 2021 (a decrease of 17,890 students).27

3.16
Universities New Zealand told us that part of the reason why the reduction in international students did not affect universities as badly as expected is because some students could enrol in courses without travelling to New Zealand. These students began their studies online with the intention of finishing their courses in New Zealand.

3.17
Although providing extramural courses and programmes is not new,28 the prospect of losing international student revenue because of border restrictions meant that tertiary education institutions increased the amount of university courses and programmes they deliver overseas and online in 2021.

3.18
In November 2021, Massey University announced that it would launch its third dedicated learning centre in China for students who want to study at the university but are unable to travel to New Zealand because of border restrictions.

3.19
In 2021, Waikato University expanded its operations in Vietnam, signing a Memorandum of Understanding with Vietnam's Van Lang University in Ho Chi Min City. Under that memorandum, learners will study in Vietnam for the first two years before becoming eligible to complete their degree in New Zealand.

3.20
Students now expect tertiary education institutions to deliver courses and programmes online or through dual delivery (that is, both on-campus and online delivery). We understand that online learning provided the opportunity to study for some students who are not able to attend in person.

3.21
In a November 2021 article, the Auckland University Vice-Chancellor said that international students will now be more likely to study online and travel less frequently between New Zealand and their home when borders open. This is not just because of the possibility of further border restrictions but also for sustainability reasons and rising climate consciousness.29

Te Pūkenga and its Crown entity subsidiary companies

3.22
Te Pūkenga and the subsidiary companies were most affected by the decrease in international students. In 2019, Te Pūkenga had 10,870 international EFTS, which decreased to 9297 in 2020. As at the end of 2021, it had 4477 international EFTS.30

3.23
In 2020, tuition fees from international students accounted for about one-third of its total revenue for the year at $118 million.31

3.24
Although the number of international students decreased compared to the universities, Te Pūkenga had the largest increase in domestic students (14%).32 This was because of a surge in domestic vocational enrolments at the non-degree level between August 2019 and August 2021.33

3.25
Some of the fields that showed large increases qualified for assistance from the Government's Targeted Training and Apprenticeship Fund, which supports learners to carry out vocational education and training without fees.

3.26
Te Pūkenga told us that, despite the increase in domestic students in vocational training, it expected fewer students overall in 2022. This is because of a reduction in international students and tight labour market conditions leading to an anticipated drop in domestic enrolments.

3.27
The subsidiary companies delivered several courses overseas and online. In October 2021, 222 new students began studying at the Eastern Institute of Technology Data Science and Communication College. This is a joint International College partnership between the Eastern Institute of Technology and Zhejiang Yuexiu University of Foreign Languages.

3.28
In terms of workplace-based tertiary education, the Ministry of Education's report The impact of Covid-19 on tertiary education in New Zealand: Initial impact on participation said that Covid-19 arrived when the number of apprentices had been increasing over time and the number of trainees had been decreasing.

3.29
The data shows that, between August 2019 and August 2021, the number of apprentices increased by 49% and the number of trainees decreased by 14%. The participation data shows that the number of apprentices and trainees started to decrease in the months that were affected by the Alert Level 4 lockdown in 2020.

3.30
From the second half of 2020, there was a significant increase in the number of apprentices compared to the previous year. At this time, the Government introduced several policies that were designed to support participation in apprenticeships and certain vocational areas of study. This has been associated with the increase in the number of apprentices training.

Reasons why international students study in New Zealand

3.31
It is unclear what influence universities' performance in various international ranking systems has on international students' decisions to study in New Zealand.

3.32
In a report published in September 2020, the Ministry of Education said that:

… international university rankings are important because they attract interest – they are important because people think they are important. They are also one of the only ways people can access information on the relative performance of individual universities from different countries. While there may be doubts about their intrinsic value, most countries and most universities now at least monitor the rankings.34

3.33
Each university's website has a considerable amount of information about how it ranks in various systems. International rankings are clearly important to each university.

3.34
Sector leaders told us that a university's international ranking accounts for about 18% of a person's decision to study there. Other factors – such as location, safety, and experience – are just as, if not more, important.

3.35
In 2019, Education New Zealand surveyed international students on the reasons for studying in New Zealand. Respondents to the survey identified nine factors that were "very" or "extremely" important in their decision to study in New Zealand. These were:

  • opportunity to live in a society that is welcoming and inclusive (79%);
  • New Zealand's natural environment (76%);
  • New Zealand's reputation as a safe country (75%);
  • right to work in New Zealand once their studies are complete (70%);
  • New Zealand qualifications are internationally recognised (69%);
  • opportunity for outdoor leisure and adventure (67%);
  • academic reputation of the institution or school they are studying at or studied at (67%);
  • the reputation of New Zealand's education system (66%); and
  • the New Zealand culture and way of life (66%).

3.36
The quality of the education a student can attain in New Zealand is in the bottom three reasons on the list.

Well-being and completion rates

3.37
The Covid-19 pandemic's effect on the tertiary education sector is not limited to financial impacts. Ongoing disruption to course and programme delivery, and the ability of learners and staff to go to campuses, has affected well-being and course completion rates.

Well-being

3.38
As part of its Covid-19 Response and Recovery Fund, the Government allocated $20 million to establishing a student hardship fund for 2019/20.35 The funding provided financial support to students, allowing them to remain connected with the tertiary education institution they were enrolled at.

3.39
In 2020/21, the Government "topped up" the fund by another $20 million. By 26 October 2021, more than $36 million of the funding had been distributed to tertiary education institutions – the largest grant – of just more than $9 million – went to students at Te Pūkenga.36

3.40
Students told us that a loss of regular income because of the lockdowns caused a lot of stress and anxiety. We also heard about the well-being of students in halls of residence during lockdowns. These students were often young and away from their families and support systems for the first time.

3.41
Surveys by the universities suggest that technology-enabled learning has worked best for students who are already well positioned to succeed. These are students who are self-directed, who are supported by their family, and who have access to the physical spaces and technology for studying online.

3.42
Other students have struggled in a technology-enabled learning environment. This has had an adverse impact on academic performance and increased levels of students feeling isolated and seeking support.

3.43
In terms of staff well-being, we have heard (both through surveys and face-to-face meetings) that increasing stress levels are common. This stress is caused by issues such as unrealistic work expectations, restructuring, job insecurity, redundancy threats, and pay and staff cuts.

3.44
We heard that, although dual delivery allows tertiary education institutions to reach as many students as possible, it can be time consuming and difficult for teaching staff. It also creates added pressure for them.

3.45
Despite generally performing better than expected in 2020, some universities continued with redundancy plans.

3.46
In May 2020, the Tertiary Education Union published the results of its survey on the impact of the Covid-19 pandemic on tertiary education staff. The summary of the report said that:

… the most obvious result was the serious stress amongst staff … Many reported a number of concerns and causes of stress that included both workload, personal issues and treatment received as a result of the emergency. It is the combination of these that is overwhelming for many.

Course completions – a wānanga perspective

3.47
According to data from the Commission's Annual report for the year ended 30 June 2021, completion rates for Levels 1-10 in 2019 and 2020 varied between Māori, and non-Māori and non-Pasifika students (see Figure 8).

Figure 8
Course completion rates for all tertiary education institutions for Māori, and non-Māori and non-Pasifika students, 2019 and 2020

Student demographic Course completion rate Levels 1-10 in 2019 Course completion rate Levels 1-10 in 2020
Māori students 75.4% 73%
Non-Māori and non-Pasifika students 86.8% 87.2%

Source: Tertiary Education Commission's Annual report for the year ended 30 June 2021, at tec.govt.nz.

3.48
How the Covid-19 pandemic impacted course completion rates at wānanga is of interest.

3.49
In its Te Pūrongo 2020, Te Wānanga o Raukawa said that, although the Covid-19 pandemic did not affect enrolments, it had a significant impact on attendance and completion rates.

3.50
Te Whare Wānanga o Awanuiārangi said in its annual report that more than 50% of learners had successfully completed a qualification at Level 1 to 4, which is above the 2020 target but lower than the 2019 result.

3.51
In August 2020, Te Wānanga o Aotearoa carried out independent research to gain a deeper understanding of:

  • the reasons its learners withdrew from courses that are related to Covid-19;
  • what differences may be causing more withdrawals at the wānanga than at other tertiary education institutions; and
  • what the wānanga can do to mitigate any future withdrawals.

3.52
In 2019, the course completion rates for Level 1-10 students at the wānanga was 76.3%. The 2020 interim result was 71.3%.37

3.53
The research's findings show that students at Te Wānanga o Aotearoa have quite different demographics than at other types of tertiary education institutions (although they are not substantially different to other wānanga).38

3.54
Students at Te Wānanga o Aotearoa are much more likely to be Māori (48%), female (74%), and aged 40 years and over (54%). Students at universities are more likely to be New Zealand European/Pākeha (56%), female (58%), and aged 20-24 (48%).39

3.55
Because of its demographics, Te Wānanga o Aotearoa has a greater proportion of students who are more likely to have competing responsibilities, such as work or looking after children and whānau, and who are more likely to be of lower socio-economic status. Therefore, they are more adversely affected by lockdowns and their ongoing consequences.

3.56
The research concludes that the three main reasons learners withdrew from their courses were because:

  • it was too difficult to study from home;
  • of work commitments; and
  • it was too difficult to use the technology or learn online.

3.57
The main reasons learners withdrew from their wānanga courses are not dissimilar to those for other tertiary education institutions. However, several of the courses and programmes all three wānanga deliver have a different nature to those that other tertiary education institutions provide. This brings with it a unique set of reasons for course withdrawals.

3.58
For all three wānanga, face-to-face learning and contact time between kaiako (teachers) and tauira (students) are important parts of how they deliver their programmes. For example, programmes that involve raranga (weaving) and whakairo (carving) incorporate te reo Māori and tikanga that enable the learner to extend their knowledge and become kaitiaki (guardians) of the traditions and practices that have been handed down through generations.

3.59
Additionally, programmes such as Te Pou Hono ki Marae Ātea (a marae-centred programme delivered by Te Whare Wānanga o Awanuiārangi) and Poupou Karanga at Te Wānanga o Raukawa have components that, for practical and cultural reasons, are considered best delivered face to face.

Immigration settings and government support

3.60
International education delivers economic, social, and cultural benefits for New Zealand. New Zealand's international education sector is made up of schools, universities, institutes of technology and polytechnics, private training establishments, English language schools, and education businesses.

3.61
Under the Education and Training Act 2020, Education New Zealand's functions include promoting New Zealand education overseas, providing information to international students in New Zealand, carrying out research and providing intelligence, and acting for the government in relation to international education.

3.62
As part of its recovery plan for international education, the Government announced border exceptions for international students in 2021. In January 2021, the Minister of Education stated in a press release that:

… this border exception delivers on a part of the recovery plan for international education. It underscores the Government's commitment to the international education sector, which is important in the country's long-term economic recovery from COVID-19.

3.63
Initially, an exception class was granted for 1000 international students. These included those studying at degree level and above, and those who began their study in New Zealand but were overseas when border restrictions were introduced.

3.64
This exception allowed students to return to New Zealand from April 2021 in stages. The Minister of Education also said that:

… the annual economic value of this group of degree-level international students is estimated to be roughly $49 million in wider economic contribution, including approximately $27 million in tuition fees.

3.65
In October 2021, the Government announced that further border exceptions for 240 students would take effect in 2022. Students from this cohort were able to return after February 2022. In November 2021, a further 1000 exceptions were announced (specifically, 400 pilot trainees, 300 students at degree level and above, and 300 students at the sub-degree level). When we wrote this report, the expectation was that these students would start arriving from March 2022.

3.66
In February 2022, the Government announced that it would allow 5000 overseas students who are eligible to study in semester 2 of 2022 into the country from 12 April 2022.

3.67
Although these exceptions will provide some financial relief for the tertiary education sector in 2022, it is still uncertain when all restrictions on international students entering the country will be lifted.

3.68
In response to a written parliamentary question, the Minister of Education said that tertiary education institutions collectively budgeted for $774 million of international student fee revenue in 2020. The actual result was $679 million in tuition fees in 2020. This led to a loss of about $105 million.40

3.69
The Minister's response also said that, although full information for 2021 is not yet available, forecasts from earlier in the year suggested that international fee revenue would fall further to about $480 million in 2021.

3.70
In contrast, 43,000 international students arrived in Australia between 1 December 2021 and 18 January 2022. Because of workforce shortages, the Australian government temporarily removed working hours limits for student visa holders and refunded the visa fee for students who arrived between 19 January and 19 March 2022.41

3.71
New Zealand faces considerable competition for international students. This means that certainty about the Government's long-term plan for international students is important for tertiary education institutions. This certainty will allow them to develop their international student strategies.

3.72
In May 2021, the Productivity Commission began an inquiry into which immigration policy settings would best facilitate New Zealand's long-term economic growth and promote the well-being of New Zealanders.

3.73
The Productivity Commission released its preliminary findings in November 2021.42 It said that the immigration system and the education and training system are not connected. More specifically, the findings stated that:

… there are no consistent feedback mechanisms to link skills shortages evident in the immigration system to potential responses in the education and training system. This limits the ability of the education system to meet employer needs and may weaken accountabilities on employers to train and develop local workers.

3.74
In July 2021, Cabinet considered a paper about New Zealand's long-term immigration priorities. The paper discussed areas of focus for rebalancing the immigration system, such as international student settings (which includes post-study work rights). Specifically, the paper said that:

… pre-COVID-19, international students were a source of high migrant volume. Immigration settings can support a shift to attract proportionally more students studying for degree-level qualifications or in critical skill shortage areas within overall lower volumes.

3.75
The Cabinet paper invited the Minister of Immigration to report back on international student settings in October 2021.

3.76
As part of its Covid-19 Response and Recovery Fund Foundational Package, the Government allocated $1.4 billion to Vote Tertiary Education initiatives over five years.43 The Commission has confirmed that, as at 31 December 2021, $491 million of the money has been invested.

3.77
The funding focused on ensuring that the tertiary education sector was resilient and responsive to change. Part of this funding was set aside to provide students with financial support and allow them to remain connected with their tertiary education institution.

3.78
At a high level, the Covid-19 recovery funding for tertiary education focused on the following four targeted areas:

  • increased demand because of forecast unemployment;
  • supporting displaced workers into training and apprenticeships;
  • retaining existing learners and apprenticeships; and
  • ensuring that vocational education and training delivers the skills that industry needs.

3.79
The impact of the response and recovery fund initiatives in the tertiary education sector will be seen in the next few years.

3.80
Given our interest in the investment of funding in Covid-19 response initiatives generally, we will continue to report on this matter for all sectors, including the tertiary education sector. This includes providing advice to select committees to assist them with Parliament's scrutiny of public organisations.

3.81
Given the many interdependencies the tertiary education sector has with other sectors (such as immigration), an integrated and strategic approach to the sector's recovery from the Covid-19 pandemic is needed.

3.82
Sector leaders told us that they will need to rethink their international student strategies so that they are less vulnerable to any future border restrictions. They plan to focus on diversifying where and what they deliver, rather than readopt their previous approach to international students.

3.83
In July 2020, the Government released its long-term strategic recovery plan for the international education sector. The plan included $51.6 million of investment from the Covid-19 recovery and response fund.

3.84
The plan focuses on stabilising the international education sector, strengthening the tertiary education system, and accelerating the transformation of the sector as signalled in the International Education Strategy.44

3.85
Outcomes to date from the Senior Officials Group have included carrying out a broader impact evaluation of international education to better identify the benefits, costs, and value of international education.

3.86
The recovery plan is being revised to ensure that it remains fit for purpose, and we will continue to watch how the Government brings increased stability to the international education sector during the coming year.45

26: Data from the Tertiary Education Commission.

27: Smart, Warren, Tertiary Sector Performance Analysis, and the Ministry of Education (2021), The impact of COVID-19 on tertiary education in New Zealand: Initial impact on participation, at educationcounts.govt.nz.

28: The Open Polytechnic began delivering online courses in 1997, and Massey University has been delivering courses extramurally since the 1960s.

29: New Zealand Herald (November 2021), "Dawn Freshwater: International study has changed – for good", at nzherald.co.nz.

30: Tertiary Education Commission, Single Data Return data as at December 2021, at tec.govt.nz.

31: Te Pūkenga (2021), 2020 Te Pūrongo ā-Tau Annual Report, at tepūkenga.ac.nz.

32: Tertiary Education Commission, Single Data Return data as at December 2021, at tec.govt.nz.

33: Smart, Warren, Tertiary Sector Performance Analysis, and the Ministry of Education (2021), The impact of COVID-19 on tertiary education in New Zealand: Initial impact on participation, at educationcounts.govt.nz.

34: Tertiary Sector Performance Analysis and the Ministry of Education (2020), University rankings factsheets, at educationcounts.govt.nz.

35: Government of New Zealand (2020), Summary of initiatives in the COVID-19 Response and Recovery Fund (CRRF) Foundational Package, at treasury.govt.nz.

36: New Zealand Parliament (2021), Minister of Education, Response to Written Parliamentary Question 47949 (2021), at parliament.nz.

37: Te Wānanga o Aotearoa (2020), Te Pūrongo – Annual Report 2020, at twoa.ac.nz.

38: At Te Wānanga o Raukawa, 80% of students are Māori and the average age is 38. At Te Whare Wānanga o Awanuiārangi, 73% of students are Māori, 50% are over the age of 40, and 71% are female.

39: This is based on enrolment data for 2019, available at educationcounts.govt.nz.

40: New Zealand Parliament (2021), Minister of Education, Response to Written Parliamentary Question 54803 (2021), at parliament.nz.

41: Australian Government Department of Home Affairs media release (January 2022), "Temporary changes to visa work conditions for Students and Working Holiday Makers", at immi.homeaffairs.gov.au.

42: New Zealand Productivity Commission (2021), Summary of Immigration: A fit for the future, at productivity.govt.nz.

43: New Zealand Government (2020), Summary of initiatives in the COVID-19 Response and Recovery Fund (CRRF) Foundational Package, at treasury.govt.nz.

44: New Zealand Education (2018), International Education Strategy 2018-2030, at enz.govt.nz.

45: See "Next steps on the international education rebuild" at education.govt.nz.