The Tertiary Education Commission cut $2.4 million from Lincoln University's funding earlier this year, official documents reveal.
Documents said Lincoln University was enrolling about 550 full-time students a year, but being funded for a target of 800. Photo: Wiki Commons
They show the commission decided the university's Telford division should no longer be protected from enrolment drops by a funding guarantee introduced after the 2011 Canterbury earthquake.
The guarantee, or funding recovery exemption, ensured Canterbury universities and polytechnics were funded at their pre-quake enrolments even if they enrolled fewer students and it runs until the end of 2018.
The commission's board removed the exemption from the Telford section "due to its significant under delivery and poor incentives".
The documents provided under the Official Information Act said Lincoln, which was formerly a separate polytechnic, was enrolling about 550 full-time students a year, but being funded for a target of 800.
The university's chief financial officer, Howard Gant, said the decision was not a surprise and it would not have much impact on the university's finances.
"It was understandable on the basis that Telford wasn't really impacted by the earthquakes," he said.
Mr Gant said the money was never paid to Lincoln so the university had simply accepted a lower amount of funding this year.
He said the change was not behind Lincoln's decision to divest itself of the Telford unit.
The documents, briefing papers to the Tertiary Education Minister, Steven Joyce, also show that the Tertiary Education Commission decided to halve the number of full-time students it funded at Telford to 235 next year.
Mr Gant said that should not put off prospective buyers of the division.
"We've done a lot of work to look at the infrastructure and the cost and we're moving forward with a fairly balanced situation in terms of anticipated revenue and costs, so the impact shouldn't be significant," he said.
Last month, Lincoln proposed restructuring including the loss of 17 jobs at the Telford campus.
Tertiary Education Union president Sandra Grey said ending the quake-related enrolment protection of Lincoln's Telford unit was probably reasonable.
"The institution and the staff and the students have always known that funding wouldn't go on and on. Telford is a division that wasn't primarily hit by the quakes so it probably is a reasonable decision, but the problem is it comes at a time when Telford's future is very much up in the air."
The government said protection from enrolment drops was still in place for the rest of Lincoln and also for Canterbury University and the Christchurch polytechnic, now the Ara Institute.
That protection would run until the end of 2018.
Education statistics show Lincoln had about 500 fewer full-time students than its "commitment" for 2626 students last year. The University of Canterbury's commitment was for 12,789 domestic students, but it fell about 2000 students short.