The SAC level 3 and above funding mechanism is issued by the Minister responsible for tertiary education.  The funding mechanism outlines the general form and essential components of the fund. It provides the mandate for the TEC to allocate the funding, what the funding can be used for, and details how we administer the fund.

Funding is agreed through a TEO’s Investment Plan (i.e. it is on-Plan funding). A TEO that receives SAC level 3 and above funding is required to:

• comply with the requirements of the Education and Training Act 2020, and
• comply with the funding conditions specified in its funding approval documentation.

Funding for SAC level 3 and above is set through the Government’s annual budget process. We determine the appropriate amount of SAC level 3 and above funding for a TEO.

SAC level 3 and above is funded using the equivalent full-time student (EFTS) funding model. One EFTS means the student workload that would normally be carried out by a student enrolled full-time in:

• a single academic year, or
• a single calendar year.

One EFTS is equivalent to 120 credits, i.e. 1200 notional hours of learning or 100% of a full-time, full-year student workload.

See Condition: Funding.

Through each TEO’s Plan, we agree the mix of provision (MoP). For PTEs this includes the qualifications that the funding can be used for, and the allocation of funding towards, and the volume of delivery expected for, each qualification.

SAC level 3 and above funding is paid in monthly instalments. The payment amounts are in equal instalments from January to June, and in equal instalments from July to December.

2021 Student Achievement Component level 3 and above indicative allocations

The purpose of Student Achievement Component Level 3 and above funding

The Student Achievement Component (SAC) is the Government’s contribution towards the cost of teaching and learning services for students enrolled at a tertiary education organisation (TEO).

Students must be studying towards a qualification listed on the New Zealand Qualifications Framework (NZQF) at level 3 or above.

We invest in this provision:

• at level 3: to build on the skills and knowledge gained at foundation level study. Provision at level 3 will continue to support learner progression to higher level study and skilled employment; build literacy and numeracy skills; and enable learners to learn English or Te Reo Māori.
• at levels 4-7 (non-degree): to provide a better alignment of education with industry demand and to equip learners with the skills they need for successful careers.
• at level 7 (degree): to help ensure New Zealand has graduates who contribute to the knowledge economy and society, to support stronger linkages between TEOs and with business, to drive productivity, and to meet labour market demand.

How we calculated your 2021 indicative allocation for Student Achievement Component (SAC) Level 3 and above

The information below provides a summary of how your indicative allocation was calculated. For more details regarding your specific allocation, please contact customerservice@tec.govt.nz or your Relationship Manager.

Your prior performance information informed the calculation of your 2021 indicative allocation.

Starting point

To determine the starting point for calculating your 2021 indicative allocation we compared your 2019 actual Student Achievement Component levels 3 and above delivery with your 2020 allocation.

Note: Your 2019 actual delivery has been adjusted for any additional funding provided (including flexible funding), funding rate increases, medical EFTS and significant policy changes relating to 2020.  We make these adjustments to ensure we are accurately comparing your 2019 actual delivery with your 2020 allocation, in dollar terms.

If your 2019 actual delivery was below 100%, we used the lesser of either your:

• 2019 actual delivery, or
• 2020 allocation.

If your 2019 actual delivery was above 100% or above, we used your:

• 2020 allocation.

If you delivered Student Achievement Component levels 3 and above for the first time in either 2019 or 2020, we used your:

• 2020 allocation.

We then considered, and may have made manual adjustments for:

• your educational performance indicators, and
• areas of study expected to affected by the Covid-19 pandemic.

Rate increases

Once we established your starting position we included any 2021 funding rate increases.

Cap on high-cost provision: Aviation

If your 2019 Equivalent Full-Time Students (EFTS) delivered were less than your 2020 allocated EFTS then we used your 2019 EFTS.  If your 2019 EFTS delivered were greater than your 2020 allocated EFTS then we used your 2020 allocated EFTS.

We then applied the 2021 funding rate increase.

Secondary Initial Teacher Education

We have applied the 2021 funding rate increase to your 2020 allocation for Secondary Initial Teacher Education.

ICT Grad Schools

We have applied the 2021 funding rate increase to your 2019 actual delivery.

New Zealand Institute of Skills and Technology

Allocations for each NZIST subsidiary will be based on prior performance and funding data for it or for the ITP it replaces.

An indicative funding allocation may be made to a TEO that later transfers delivery to a transitional or other TEO. In that case, we will engage with the new TEO to transfer and adjust the allocation.

Determining your final 2021 funding allocation

To determine your final 2021 allocation and Plan approval, we will consider the following information in our assessment and/or engagements with you:

• Your Education Performance Indicator data (refer Investment briefs), and
• Your year to date 2020 delivery and any further rate increases.

A TEO must not use SAC level 3 and above funding to meet the costs of overseas travel for students, or require students to meet the cost of the travel by accessing the Student Loan Scheme, unless the overseas travel is academically essential. See Condition: Use of SAC3+ Fund Funding for overseas travel.   

When overseas travel is a legitimate academic requirement of the course of study or training it reduces the likelihood that students enrol in a course in order to access subsidised overseas travel, and ensures public funds are used appropriately.

To include overseas travel within a course, a TEO must submit an application to us demonstrating that the travel is academically essential.

We will consider the following factors.

• Whether the overseas travel is integrally linked to the stated outcomes of a course
• Whether the course is a compulsory requirement of a qualification and/or major
• Whether the academic outcomes for the course are achievable in any other manner in New Zealand
• Whether the course or qualification is aligned to the Tertiary Education Strategy

Refer to SAC level 3 and above funding conditions including, but not limited to:

• Condition: Valid domestic enrolment
• Condition: Claiming SAC3+ Fund Funding.

We calculate a TEO’s consumed funding using:

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

To calculate a TEO’s consumed SAC level 3 and above funding, we use the following elements:

• the metric (EFTS value)
• course classification
• funding category
• funding rates 
• student enrolments. 

Example:

Recognition of learning / prior achievement

Recognition of learning / prior achievement relates to previous study or experience (prior achievement) relevant to a programme that a student is currently undertaking. It enables a student to proceed with his or her study without repeating aspects of the qualification previously studied, or re-learning skills the student has already achieved through past work or other experience.

Recognition of prior learning (RPL), and credit recognition and transfer (CRT), are forms of recognising learning / prior achievement. The New Zealand Qualifications Authority (NZQA) provides information and guidelines on recognition of learning / prior achievement for tertiary education organisations (TEOs).

RPL and CRT for SAC level 3 and above students

Students may have already some knowledge of, or achieved, some courses or course content prior to enrolment in a SAC level 3 and above funded qualification. The TEO must not claim funding where this is the case.

The TEO must recognise this prior learning and adjust the courses in the learner’s programme. The TEO must not claim SAC level 3 and above funding for recognising this prior learning, or for delivering tuition where the student already has this prior learning (i.e. skills and/or knowledge).

See Condition: Recognised prior learning. 

We also expect the TEO to similarly adjust the student’s fees in light of the student’s prior learning. That is, the TEO should see RPL and CRT as a function of the TEO’s compliance with Condition: Recognised prior learning. See Fees on the Enrolment page.

The TEO is expected to be proactive about engaging with learners at the point of enrolment to determine whether they are likely to have existing knowledge, skills, and attributes that can contribute to the graduate outcomes of the qualification.

If the student has achieved course content previously, the TEO must work out the EFTS factor of prior learning of the student (relative to the standard course). The TEO must then subtract this from the standard course EFTS factor. The revised EFTS factor is the value that the TEO should then submit in the enrolment file of the SDR, in the FACTOR field, for that student.

Re-enrolling a SAC level 3 and above student

Where a SAC level 3 and above student requires further study to complete their qualification, their study can only be to complete courses that they have not yet passed. This can include content not yet studied or content studied and assessed, but requiring a re-sit.  See Condition: Exceeding the total annual EFTS value of the qualification.

For example:

A TEO enrols a student in all courses linked to a 60 credit (0.5 EFTS) qualification. The sum of the course EFTS factors is 0.5 EFTS.

The student passes/achieves 30 credits from the 60 credit course enrolments. The TEO is funded 0.5 EFTS, for the 60 credits of courses the student was enrolled in.

The TEO re-enrols the student 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 student was re-enrolled in.

The student successfully completes the courses and is awarded the qualification.

The student 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 student, the following formula should be used:

Claiming funding once for the EFTS factor of a course

See Condition: Funding for EFTS factor of a course.

We fund eligible TEOs for eligible SAC level 3 and above provision above the amount the TEO has been approved to deliver. This is to provide TEOs with flexibility to meet additional student demand. See Condition: Flexible funding for further information.

Flexible funding:

• is payable for provision towards:
  • qualification courses that we have agreed to fund in your MoP (for private training establishments), or
  • NZSCED volumes of provision that we have agreed to fund in your MoP (for tertiary education institutes)
  • 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 Condition: Flexible funding 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 SDR. Payment is made in March of the following year.

For the purposes of calculating flexible funding, the value of 10 EFTS of delivery 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).

We approve SAC level 3 and above funding as a total dollar value (not an EFTS volume). A TEO is expected to manage its enrolments effectively and in accordance with its Investment Plan (Plan). 

We have a tolerance band for over-delivery and under-delivery, which is currently set at 99% to 105% of each year’s funding. This is to acknowledge that the dollar value of enrolments may vary from the dollar value of the allocation approved by us.

Over-delivery

Even though we can fund over-delivery as set out in the Flexible funding section above, our tolerance threshold for over-delivery is 105%. If a TEO is not eligible for flexible funding and it delivers above 105% threshold in year n, we reduce the TEO’s baseline funding from year n+2 onwards.

Delivery above the 105% threshold is calculated using the TEO’s combined:

• approved allocation, and
• dollar value of its Plan-agreed unfunded provision (if any).

Each TEO is responsible for notifying us at the earliest possible opportunity to discuss this if it has actual or anticipated delivery above agreed levels. 

Under-delivery

If a TEO delivers less than 99% of its SAC level 3 and above funded provision during the year, we will recover funding (see below for recovery details).  We may also reduce SAC level 3 and above funding to the level of actual delivery within the Plan period by making a significant Plan amendment, or by revoking or suspending some funding. 

We will also consider the level of delivery achieved when determining future funding allocations.

The methodology and technical specifications for the calculation of 2022 funding wash-ups can be found in the 2022 Global Wash-up Methodology document.

2022 Global Wash-up Methodology (PDF 1.1 MB)

Under Schedule 18 Clause 16 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 Schedule 18 Clause 16 of the Act, the unspent portion of funding is repayable to the TEC (see Condition: Suspension, revocation or withdrawal of SAC 3+ Fund Funding). We may arrange to off-set the amount against any funding payable to the TEO.