On this page:

• Funding mechanism
• Fee limits and regulations
• Funding allocation and payments
• Funding calculation
• Re-enrolling DQ3-7 provider-based learners reported through SDR
• Funding rates
• Modes of delivery
• Flexible funding
• Suspending or revoking DQ3-7 funding
• Subcontracting
• Student Loan and Allowance Scheme payments
• Loan entry threshold

Funding mechanism 

The Minister responsible for tertiary education issues the DQ3-7 funding mechanism. 

It outlines the purpose and requirements of the fund and gives the Tertiary Education Commission (TEC) authority to allocate the funding, explains what funding can be used for, and details how TEC should administer the fund.

Funding is agreed through a tertiary education organisation's (TEO's) Investment Plan (ie, it is on-Plan funding).

For more information see Guidance to develop your Investment Plan.

A TEO that receives DQ3-7 funding is required to comply with:

• Education and Training Act 2020 requirements, and
• funding conditions for the relevant year specified in its funding approval documentation.

The overall amount of DQ3-7 funding available is set through the Government’s annual budget process. We determine the appropriate amount of DQ3-7 funding for a TEO through the annual investment process and through additional funding if available.

Fee limits and regulations

For information on fee regulations, see: 

• Annual Maximum Fee Movement
• Fee setting limits for new courses 
• Fee cap for micro-credentials
• Student services fees 

Funding allocation and payments

Funding allocations, including any amendments, are available through My Allocations and Payments on DXP Ngā Kete.

DQ3-7 funding is paid in equal monthly instalments.

For the calculation of indicative allocations, see the methodology from the relevant year at Indicative allocations by year.

For more details regarding your specific allocation, please contact customerservice@tec.govt.nz or your Relationship Manager.

Funding calculation

Funding calculation

We calculate a TEO’s value of delivery using:

• the number of valid domestic learner enrolments, measured by equivalent full-time students (EFTS)
• the programmes, qualifications, and any component courses, in which a valid domestic learner is enrolled. 

To calculate a TEO’s consumed DQ3-7 funding, we use the following elements:

• the metric (EFTSs value)
• course classification
• funding category
• funding rates
• learner enrolments.

Example

For details on funding refer to the DQ3-7 funding conditions for the relevant year.

Re-enrolling DQ3-7 provider-based learners reported through SDR

Where a DQ3-7 learner requires further study to complete their programme, this study can only be to complete courses that they have not yet passed. It can include content not yet studied or content studied and assessed but requiring a re-sit.

Example

1. A TEO enrols a learner in all courses linked to a 60-credit (0.5 EFTS) qualification. The sum of the course EFTS factors is 0.5 EFTS.
2. The learner passes/achieves 30 credits from the 60-credit course enrolments. The TEO is funded 0.5 EFTS, for the 60 credits of courses the learner was enrolled in.
3. The TEO re-enrols the learner in a second period of study for the remaining 30 credits not yet achieved. The TEO is funded 0.25 EFTS for the 30 credits of courses the learner was re-enrolled in.
4. The learner successfully completes the courses and is awarded the qualification.
5. The learner will have received 0.75 EFTS worth of provision (90 credits), and the TEO will be funded for 0.75 EFTS delivery (0.5 + 0.25 EFTS) (assuming funding conditions are met for each course enrolment). 

Note: The TEO will report 0.25 EFTS (30 credits) unsuccessful course completions, and 0.5 EFTS (60 credits) successful course completions.

Calculating EFTS remaining vs consumed

To determine the exact value of the EFTS remaining for a returning learner, use the following formula:

Qual EFTS value - (credits completed/total qual credits x qual EFTS value) = remaining EFTS

For example:

0.5 - (30/60 x 0.5)
= 0.5 - 0.25
= 0.25 remaining EFTS

For conditions on exceeding the total annual EFTL value of the qualification, see the DQ3-7 funding conditions for the relevant year.

Funding rates

For information on DQ3-7 funding rates, see Funding rates by year.

For detailed information on the Delivery Classification Guide and how it is used for funding see Delivery Classification Guide.

Modes of delivery

Under DQ3-7 funding, there are five modes of delivery that reflect how learning takes place.

An individual learner’s programme can be made up of one or more modes. This enables learners and employers to access learning opportunities in the way that works best for them and supports them to move seamlessly between different ways of learning. 

The modes recognise the different cost structures involved in delivery.

The modes of delivery have been designed to:

• recognise broad differences in costs across modes and subject areas; they will be used to determine the funding rate for providers
• support the quality, relevance and growth of work-based learning
• meet learner, employer and community needs
• be simple and transparent.

Flexible funding

We fund eligible TEOs for eligible DQ3-7 provision above the amount the TEO has been approved to deliver. This is to provide TEOs with flexibility to meet additional learner demand.

Flexible funding:

• is payable for provision towards:
  • qualifications that we have agreed to fund in your Mix of Provision (MoP) (for registered private training establishments), or
  • the mode and subject category rate volumes of provision that we have agreed to fund in your MoP (for tertiary education institutions)
• does not mean we have changed your approved funding allocation, and
• is subject to the conditions that we have imposed on your funding.

The external evaluation and review (EER) category referred to in the funding conditions will be the highest published EER category for the TEO during the funding year to which flexible funding is being applied.

Flexible funding is calculated using the December Single Data Return (SDR) and the Industry Training Register (ITR) 31 March cut-off. Payment is made in April of the following year for SDR only submitters, and in May for ITR only and ITR + SDR submitters.

For the purposes of calculating flexible funding, the value of 2% of your approved funding allocation, or 10 EFTS of delivery (whichever is greater) is calculated using the average EFTS rate of a TEO’s total actual delivery (funded and unfunded), as determined by us.

The table below shows examples of how flexible funding is calculated (assuming a generic funding rate of $10,000 per EFTS to illustrate).

Funding wash-ups

For the calculation of funding wash-ups, see Funding wash-ups by year.

Suspending or revoking DQ3-7 funding

Under clause 16 of Schedule 18 of the Education and Training Act 2020 (the Act), we may suspend or revoke some or all funding given under section 425 of the Act if we are satisfied on reasonable grounds that:

• when measured against performance indicators, the TEO has not achieved, or is not achieving, an outcome anticipated in its Investment Plan for a tertiary education programme or activity in relation to which funding has been given under section 425 of the Act,
• the TEO has not complied, or is not complying, with a condition on which funding has been given under section 425 of the Act, or
• the TEO has not provided, or is not providing, adequate and timely information required by the TEC or Ministry of Education under section 425 of the Act.

If a TEO has its funding approval revoked in accordance with clause 16 of Schedule 18 of the Act, the unspent portion of funding is repayable to the TEC. For conditions, see the DQ3-7 funding conditions for the relevant year. 

We may arrange to offset the amount against any funding payable to the TEO.

Subcontracting

Subcontracting is where a TEO uses TEC funding to pay another organisation to deliver teaching or assessment on its behalf. This excludes:

• teaching and learning activities contracted to individuals or employers (eg, an employee on a fixed-term contract, an honorary staff member, or a contract for teaching and learning services with a subject-matter expert for part of the programme such as first aid provision)
• research activities or postgraduate research supervision, and
• learning that occurs within vocational placements such as a workplace placement or practicum.

A TEO must not subcontract any DQ3-7 funded activities without our prior written consent. TEOs must also seek any approvals required as part of quality assurance processes from the relevant body.

For conditions on subcontracting see the DQ3-7 funding conditions for the relevant year.

Subcontracting can be agreed in two ways

Subcontracting can be agreed to within a TEO’s Investment Plan (the Plan). The subcontracting specified in the Plan is permitted for the period of the Plan. If the Plan expires then you need to obtain approval from us again.

Subcontracting can also be agreed outside of a Plan by seeking our approval in writing. Again, the subcontracting specified is permitted for the period agreed with us.

You can contact us at any time to discuss proposed subcontracting.

Subcontracting TEO obligations

A TEO that has received approval from TEC to subcontract delivery to another party:

• must comply with any conditions imposed by us within a consent to subcontract
• must ensure that the subcontracted party does not further subcontract any functions; and
• will be accountable to us for the use of the DQ3-7 funding, including in respect to legislative and funding condition requirements.

For more information see the DQ3-7 funding conditions for the relevant year.

Student Loan and Allowance Scheme payments

Work-based learning is not eligible for StudyLink loans and allowances.

We are responsible for approving each qualification for access to Student Allowance and Student Loan Schemes. StudyLink assesses the eligibility of individual learners.

A qualification must be approved for DQ3-7 funding before a learner can access Student Allowance and Student Loan Schemes for that qualification. 

For further information on eligibility see StudyLink.

Note: We will not backdate approval for access to Student Allowance and Student Loan Schemes. Therefore, please submit the programme for funding approval through DXP Ngā Kete at least four weeks before the start of tuition for the programme. This will ensure that each learner who is enrolled in an approved course or programme can access financial support if eligible.

Requesting tuition fees payment from StudyLink

If the learner has arranged to pay their fees through the Student Loan Scheme, you should:

• get the learner’s agreement to authorise the payment from their loan account
• send a Verification of Study to the Ministry of Social Development (StudyLink)
• receive confirmation that StudyLink has accepted the student’s loan application, and
• inform the learner in writing of arrangements concerning payment.

When requesting tuition fees from StudyLink ensure that the fees payment requested is for the:

• learner
• reported programme(s), and
• study period(s) listed in the Verification of Study (VoS) response.

Recognition of prior learning

Tuition fees requested from StudyLink, and EFTS the learner is enrolled in, must reflect the course of study that the learner is required to pay for and study after both recognition of prior learning (RPL) and previously awarded credits (CRT) have been recognised and removed from the learner’s programme of study or training (ie, not the tuition fee and EFTS for the whole programme).

Note: Payment of full tuition fees may not be requested from StudyLink and subsequently refunded to the learner after RPL.

Programmes delivered full-time

We will only approve a DQ3-7 funded qualification for learner access to Student Allowance and Student Loan Schemes if it:

• is quality assured by the New Zealand Qualifications Authority (NZQA) or Universities New Zealand 
• is delivered full-time
• runs for a minimum of 12 weeks, and
• has an EFTS value of at least 0.3.

Programmes delivered part-time

A programme of less than 0.3 EFTS is classified as part-time regardless of the number of weeks over which it is delivered. A part-time programme for a qualification is not eligible for learner access to student allowances.

For a DQ3-7 funded part-time programme leading to award of a qualification, we will only approve learner access to the Student Allowance and Student Loan Schemes if the programme meets one of the following criteria:

• it runs for 32 weeks or more and has an EFTS value of less than 0.3 EFTS, or
• it runs for fewer than 32 weeks with an EFTS value of between 0.25 and 0.3 EFTS.

Micro-credentials

Micro-credentials are not eligible for Student Allowance and Student Loan Schemes access.

Loan entry threshold 

The loan entry threshold (LET) is used to identify the minimum EFTS value required for a learner’s individual study programme to be deemed full-time. This affects learner eligibility for Student Allowance and Student Loan Schemes. A programme that is not deemed to be full-time (i.e., not approved for access to Student Allowance and Student Loan Schemes) can nevertheless be funded through DQ3-7.

The LET is determined by matching a range of gross weeks to a range of EFTS values. A gross week is the total length of enrolment in a programme of study, including holiday weeks (recess).

The table below shows this relationship. Programmes of less than 0.3 EFTS may still be eligible for learner access to the Student Allowance and Student Loan Schemes.

Student Allowances – paid practical work

Learners who undertake paid practical work as part of their course of study are not entitled to any Student Allowance payments for the week(s) they undertake that work. It is important that you discuss this with your learners.

For more information on allowance entitlements and paid practical work, see StudyLink.

For details on learners with unpaid fees see the funding conditions for the relevant year.