Fees-Free – An Unfortunate Series of Events

Sadly, the implementation of Fees-Free is not an engaging set of novels for the younger reader however, like the books it has “a dark, mysterious feeling”. One is never sure what will happen next.

And it was whilst pondering the latest debacle (being a fail by TEC with the preparation and distribution of the “Fees Free All Enrolments and Costs Data Validation – March 2019” file), that I decided that I would try to document the set of processes used by TEC to manage Fees-Free and to enumerate the causes of its failure.

A consequence of that failure is that you cannot know how much your Fees-Free payment from TEC will be, you are likely to be non-compliant with TEC’s funding conditions, and your compliance costs will have increased significantly.

If you would like to read this sorry story, please let me know. You may even find it useful when explaining to your boss why you can’t provide an accurate report of expected income, or when dealing with auditors.

Oh, and the most recent fail with the Validation Report? Well if the problem was restricted to the two new (and undocumented) fields in this report it will cause you confusion but no hurt. Still, if TEC gets something this simple wrong you have to wonder what other unannounced problems there are with TEC’s reporting processes.

Can TEC Survive Much Longer?

I am not noted for my warm feelings towards TEC, but the opinion piece by Tina Nixon in the Wairarapa Times Age was a doozy and in a league of its own. You can read it yourself, but here are just a couple of samples.

  • TEC is without a doubt one of the most bureaucratic organisations I have ever interacted with, and I have worked with a few.”
  • If the TEC and its current administration survive the next year, then this government will have failed the sector.”

I can’t compete with that, but I can supply a few thoughts on TEC’s current performance – or lack thereof. In all cases the problem seems to relate to a lack of consistency on the part of policy makers. One condition/policy/requirement contradicts another.

Fees Free

Admittedly TEC had very short notice to implement the Fees Free policy but over a year has gone by and they are still struggling. The wash-up return for 2018 was initially scheduled for 11 January 2019 but after receiving a lot of complaints the return date was extended to 16 January. This is where it gets tricky because the Fees Free return will not necessarily match data to be reported through the SDR which is not due until 31 January 2019. For example, a student who started in 2018 with a programme running into 2019 notifies the provider on 17 January that they will not be returning – i.e. they are withdrawing. The provider can record that for the SDR but it will have missed the Fees Free return on 16 January.

Youth Guarantee

The 2019 funding conditions 4.1 and 5.4 contradict each other.

  • 4.1 defines 1 EFTS as 100 credits.
  • 5.4 defines 1 EFTS as 120 credits.

 Go figure!

Until this issue is resolved YG providers would be ill-advised to start enrolling students because they may inadvertently contravene other YG funding conditions.

Funding Source 03 – Domestic Full Fee Paying Students

The Single Data Return Manual states that all students must be reported through the SDR, including non-funded students. However, from the 2018 version 2 edition of the SDR manual the use of Funding Source 03 – Domestic Full Fee Paying Students was changed to exclude students validly repeating courses already completed in a TEC funded programme. This is a practice that was applied to a student who withdrew from a programme several years ago but who returns to complete it and – at their own wish and the wish of the training provider – wants to repeat the few courses already successfully completed, paying a fee to do so. There is now no funding source code that can be applied to these enrolments and so how can they be reported?

Benchmark Fees and the TEC Course Register

If you have new courses in 2018, or you are increasing fees in 2018 in line with the AMFM, you will need to submit an SDR Course Register file with the new and changed course register records. Historically TEC advised against submitting course approval requests before and during the December SDR rounds to avoid unintended errors in their December SDRs.

Mysteriously TEC “recently discovered that TEOs can actually submit new course and qualification approvals for the New Year in December and January.” However there is some confusion about the method for doing so, and TEC has provided no specific communication about the topic.

This being the case my advice would be to make sure that your December 2017 has been successfully submitted before submitting the 2018 Course Register against the April 2018 return date.

If you have new qualifications and therefore new courses to add to the Course Register, and those courses have fees, then you may get caught up in the strange world of TEC’s benchmark fees. These seem to be a tool that TEC uses to determine whether the fees you are setting are within a set of ill- defined limits, as well as complying with AMFM policy as it relates to a fee increase.

I have been told that TEC’s decisions on fee levels use a process which is “partly automated and partly manual.” I’m thinking that the manual part has been a bit out of control. Consider that the fees approved by TEC for various TEOs for the same qualification in 2017 varied by up to 100%. Whether or not the actual fees charged were as approved is of course a different matter.

The other interesting point is that – search TEC’s web site as hard as you can – and I don’t think you will find mention of fee benchmarks. In the SAC3+ funding conditions you will find one oblique mention of “benchmark” in relation to fees, and in the new conditions released in relation to Fees Free there is no mention.

In short there is what some may call a “bugger’s muddle” around the matter of benchmark fees. So good luck if you are sending fee data via the SDR Course Register file for new qualifications for 2018. Let me know how you get on.

Fees Free – Not So Simple

It all seemed so simple but as the detail is revealed it isn’t simple at all. Indeed TEC’s communication of 11 December 2017 entitled “Fees-Free tertiary education payment for SAC level 3 and above on the New Zealand Qualifications Framework” completely gives the lie to the TEC’s earlier statement about Fees Free reporting to TEC that “Our objective is minimise additional reporting requirements.”

What a shame because it could have been simple but, instead, it is becoming a significant compliance burden. Read condition 15 in TEC’s 11 December communication and weep.

You have to feel sorry for the Minister because he is likely to catch the flak.

Clearly there are some things you need to do right now – like communicating with your students and modifying enrolment forms/student handbooks etc. Then there are some things that you can’t even start to do until TEC fills in the gaps. For example condition 15 requires you to report monthly but doesn’t tell you how.

I am compiling some material that will be useful when ensuring Fees Fee compliance. If you would like access to this material please contact me:


027 449-9187

2018 Funding Approval Conditions – SAC1&2 Non-Competitive Reviewed

Please email me if you would like a copy of my review. If you are to use SAC1&2 Non-Competitive funding in 2018 I suggest that you read the review. There are some interesting differences between the 2017 and 2018 conditions, plus one rather obvious TEC whoopsie; such fun.

Dazed and Confused

I think I’m beginning to feel my age because I simply don’t understand the information being supplied by TEC about performance measurement.

Here is what I have found and don’t understand. Perhaps one of you can explain it to me?

  1. 2017 SAC3+ Funding Condition 8.1 (c) Criteria to be a “qualifying TEO” refers to an average 2016 course completion rate of 70%.
  2. The same 2018 SAC3+ Funding Condition refers to an average course 2017 completion rate of 70%.
  3. Historically 70% has been the basic threshold for ongoing funding. If you didn’t hit 70% in a return year (e.g. 2015) you wouldn’t receive any ongoing funding – i.e. a “zero initial allocation” would apply two years hence (that being in 2017 when 2015 was the return year). This method has been in place since 2012, albeit initially with a lower threshold.
  4. This threshold was different from the Performance Linked Funding (PLF) thresholds which could see you losing up to 5% of your funding.
  5. A TEC document circulated in October 2017 entitled “Changes to Educational Performance Indicators (EPIs) and performance-linked funding (PLF) for 2018 onwards” tells us several things:

5.1.    “There will be no PLF funding adjustments in 2018 based on 2017 (educational delivery performance data). This is because no thresholds were set for educational delivery in 2017 as the new EPI methodologies were under development and consultation. However 2017 EPI data will still be published.”

5.2.    “We are also making a small change to the definition of course completion rates following this year’s consultation process. The data used to calculate the course completion rate will now include the same students as used for the cohort-based qualification completion rate. This change will apply to 2017 performance onwards.”

  1. I have several questions. I’ll ask you first because maybe you have answers. Otherwise I guess that I will have to ask TEC and then wait, and wait, and wait ….. for answers.

6.1.    While the 2017 performance is not going to be taken into account for PLF purposes, is the modified 2017 SCC rate going to be taken into account for future initial allocations?

6.2.    If so commencing with which year?

6.3.    What are the details of the small change to the definition of the successful course completion rate from 2017?

6.4.    How many angels can dance on the head of a pin?

2018 Funding Approval Conditions – SAC1&2 Competitive Reviewed

Please email me if you would like a copy of my review. If you are to use SAC1&2 Competitive funding in 2018 I suggest that you read the review. There are some interesting differences between the 2017 and 2018 conditions.


2018 Funding Approval Conditions – YG Reviewed

Following up on my previous post I have now reviewed TEC’s 2018 funding conditions for Youth Guarantee.

Please email me if you would like a copy of my review. If you are to use Youth Guarantee funding in 2018 I strongly suggest that you read the review. There are some very significant differences between the 2017 and 2018 conditions.