Which tertiary provider should you choose?

Until recently, there was little way of telling if the name of the national institution on a degree made any difference to graduates’ employment or salary. However, newly released data allows us to put these marketing claims to the test.

We compared the job and salary prospects of bachelor’s graduates from the eight universities. We also looked at prospects for level five-to-seven diploma and certificate holders from the 16 polytechnics.

Bachelor’s degrees

The good news for all bachelor’s grads is their job prospects are bright. The year after picking up their degree, less than 5% of young graduates were looking for work – compared to a national average of just over 5% at the time. There was no significant variation in figures between universities.

The major differences between providers were the proportions of students choosing further study or moving overseas. Roughly 40% of University of Auckland, University of Canterbury, University of Otago and Victoria University students continued their education.

Lincoln University graduates were less likely to choose this route – and the provider (which may merge with the University of Canterbury) had the highest rate of New Zealand-based employment five years after graduation. Lincoln’s agricultural focus might play a role here.

Finishing university with a bachelor’s degree isn’t a given. A third of all university students who began their studies in 2012 hadn’t graduated by 2017.

What about salary? By year five, median salaries for bachelor’s degree-holders ranged from $52,000 (University of Waikato) to $58,000 (University of Otago). The median for all bachelor’s grads – including those from polytechs offering degrees – was $55,000.

The different subjects taught at each university caused some of this variation (see “Art v science?”). For example, only the University of Auckland and University of Otago train medical students, who earned a median salary of $93,000 the year after graduation.

Finishing university with a bachelor’s degree isn’t a given. A third of all university students who began their studies in 2012 hadn’t graduated by 2017.

At Massey University, less than half of that year’s class of students completed their degree. The university said its high proportion of distance students – 14,000 out of 30,000 – contributed towards this comparatively low figure.

A university spokesperson said its students “tended to be older, with more than half over 25 years in age, and some were very part time, in the sense they might take only one paper a semester”.

Bachelor's degrees – Educational and salary performance

Massey also had a lower re-enrolment rate than other universities, with only seven in 10 students signing up for the next year alongside their classmates. Its course completion rate of 81% was the lowest of the eight universities.

Massey students pass their courses and complete their qualifications at similar rates to other universities “once the unique characteristics of Massey’s student body are taken into account”, the spokesperson said.

The University of Otago’s degree-level course completion rate was the highest (89%). It also had the highest graduation rate. Of the class of 2012, seven in 10 students had been capped within six years.

However, choosing to study at an institution with high completion rates doesn’t necessarily mean you’ll get a better-quality education. Higher rates could signal its qualifications are easier to pass, so it’s best to contrast these figures with employment-outcome data when deciding where to study.

Employment prospects - Bachelor's

Diplomas and certificates

Depending on their subject of interest, tertiary students might graduate with a diploma or certificate from one of the country’s 16 polytechnics.

These institutions are on track to becoming a single provider, the New Zealand Institute of Skills and Technology, under a government proposal announced earlier this year.

Polytechs have been struggling financially. Last year, the government spent $100 million bailing out Tai Poutini Polytechnic, Unitec, Wellington Institute of Technology (WelTec) and Whitireia – as domestic student numbers dropped.

Education Minister Chris Hipkins said the “model is fundamentally broken and isn’t delivering our workforce the skills that they need to thrive”. With such doom and gloom, do current and former polytech students need to worry?

The data suggested young students holding level five-to-seven diplomas and certificates have good prospects: on average, unemployment was less than 5% (lower than the national rate) the year after graduating.

However, five years after finishing their studies, this rate was slightly higher for graduates at NorthTec and Whitireia, though both Whangarei and Porirua where the institutes were based had higher unemployment than the rest of the country.

Diploma and certificate grads were just as likely to continue their studies as to start working – across all polytechs, about 40% chose further education. In contrast, more than half of all Ara Institute of Canterbury, Open Polytechnic, Otago Polytechnic and Universal College of Learning students began work within 12 months.

Employment prospects - Diplomas

Grads with level five-to-seven diplomas or certificates had lower salaries than those with bachelor’s degrees. A year after graduating, the median salary ($31,000) across all providers was $9000 less than degree-holders. By year five, the gap was $13,000.

Salaries five years after graduation ranged from NorthTec’s median of $37,000 to $51,000 for Western Institute of Technology (WITT) students. The mix of subjects is again likely to be a factor, with WITT offering a specialist energy, oil and gas qualification.

Data for level four-to-seven qualifications showed polytech students were more likely to drop out without earning a qualification than those studying towards a uni degree. In 2017, 58% had received their diploma or certificate within four years of enrolling.

Less than half of all students at five providers – Ara Institute, Nelson Marlborough Institute of Technology, Open Polytechnic, Southern Institute of Technology and Tai Poutini – finish their level four-to-seven qualification in the standard time frame. Only one in three Open Polytechnic students – who are all distance learners – reach this goal.

Open Polytechnic chief executive Dr Caroline Seelig said the majority of its students are “adult learners” studying part-time on top of their regular job. “Distance learners are typically coping with much higher and more varied demands on their time and energy, and these factors can impact on their study,” she said.

Interestingly, young graduates with level five-to-seven Open Polytechnic qualifications earn comparatively higher median salaries just after graduation.

Polytechnics – Educational and salary performance

Art vs science

To find the role studying different subjects played in future salary prospects, we compared median salaries for Bachelor of Arts (society and culture subjects) and Bachelor of Science (natural and physical) graduates for all eight universities.

If your child’s dead-set on an arts degree, while you’re encouraging a more “useful” qualification, these results may reassure you: median salaries show the prospects of arts degree-holders won’t take a nose dive.

Five years after completing their studies, arts graduates earned a median of $54,000 and science graduates $56,000. However, median figures for Otago and Victoria showed arts grads had a slight edge, earning $1000 more than the institutions’ science degree-holders.

Overall, arts students had a higher employment rate, as their science counterparts were more likely to return to uni for post-grad study, such as a master’s degree.

Arts vs science degrees – Salary performance

Government interventions

Across all providers, more than a third of enrolled tertiary students fail to earn a qualification within the standard time frame. However, data on the reasons why students drop out isn’t collected.

A middle-aged full-time worker enrolled in one course who decides against completing a qualification makes a very different decision from a 19-year-old who fails all their papers and consequently quits.

A spokesperson for the Tertiary Education Commission (TEC), which monitored the sector, said: “Research in this area can only be done by extensive surveying of students, which neither TEC nor the Ministry of Education has the capacity to conduct in the short term.

“Study offers valuable life skills and experience as well as education. As the workforce is changing, some students reset their goals during study and look to upskill while working.”

The government once treated low qualification completion rates as a problem. Former Tertiary Education Minister Stephen Joyce tied a portion of tertiary institutes’ funding to the number of students who passed courses and graduated. His Labour successor, Chris Hipkins, revoked the policy last year.

On the issue, Minister Hipkins said: “New Zealand’s completion rates for qualifications stack up favourably against rates across the OECD. However, focusing just on completion rates for qualifications does not provide a full picture of the health of a tertiary education system.”

The minister said tertiary students enrol for “a variety of reasons” other than gaining a degree or diploma. “Nevertheless, completing a qualification (especially a first qualification) is important because it demonstrates completion of a broad package of learning,” he said.

Fees-free policy

Last year, tertiary education received a funding boost. The government allocated an extra 12% to the 2018-19 budget and introduced the fully subsidised initial year of study. One of the stated intentions was to increase enrolments, which had been dropping.

Numbers stabilised in 2018 with an estimated 50,000 students signing up to get the benefit of the fees-free policy. However, enrolments didn’t meet government projections and $200 million pledged towards the initiative was redirected earlier this year to other tertiary policies.

Data to assess whether the policy affected course completion rates or other performance indicators won’t be released until later this year.

Tertiary education doesn’t come cheap – for either students or taxpayers. In 2015, 4.8% of total government spending went to tertiary education, which is double the OECD average. Yet domestic students still forked over higher tuition fees than their OECD peers (though the fully subsidised first year will change this).

The number of Kiwis with formal qualifications was increasing, though we’re bang on the OECD average: 44% of all New Zealanders aged 25 to 34 in 2017 were tertiary educated.

Olivia Wannan works part-time for Massey University.