'It's about increasing equity in participation in tertiary education'

Minister of Education Chris Hipkins is defending his fees-free policy, despite it having little impact on increasing tertiary enrolment.

The policy, which offers all new students one free year of full-time tertiary study or training, is expected to cost $350 million in its first year, yet enrolments are just 0.3 percent higher than the same time last year.

But Mr Hipkins said the purpose of the policy is not about increasing overall numbers of tertiary students, but rather increasing equity in participation of tertiary education.

"People from lower income backgrounds have been put off by the cost of tertiary study.

"In fact we've had a huge number of examples of people who have been saying that they're studying this year for the first time, and they would not have done so were it not for fees-free."

Mr Hipkins said student numbers would be even lower if it were not for the policy.

"We know that the numbers have been in decline for a number of years.

"The fact that they have stabilised actually is a very positive sign that this is having a bit of an impact."

He said when the country had a strong labour market, it was to be expected that tertiary participation would decline.

"The reality of this policy is that if you come back to me in five years time and we haven't shifted participation amongst those less likely to participate, then I think that criticism would be valid.

"We're only six months into this."

Mr Hipkins said that for the people taking advantage of fees-free policy, it did have a significant impact.

"We have seen 25,000 fewer people borrowing for their course fees.

"$150m less in student debt, through lower borrowing through the student loan scheme, those are very successful outcomes."

The government has also announced a $31.7 million boost for the tertiary sector to adjust for inflation.