"Assuming the figures are as significant as early estimates indicate (namely in the hundreds of thousands of dollars), we will be asking the Government to reimburse these costs."

McCutcheon told the Herald the total costs were not yet clear, but universities still expected to ask for reimbursement: "This is putting a load on to the institutions. There is no doubt about that."

In his response letter, Hipkins said the Government recognised the importance of bridging courses, and not all students in them would use their full eligibility for fees-free study, with those in part-time study able to carry some eligibility forward.

He told the Herald he was happy to talk to McCutcheon about the concerns, but there was a need to be consistent about the criteria across all institutions.

He ruled out paying universities extra for administrative costs: "I'm pretty confident that the universities receive sufficient funding now to be able to meet the cost as part of their business-as-usual costs."

Hipkins said using StudyLink would have required a law change, and force some people to take out a loan, which would be written off later, when they would otherwise not be borrowing.

"It would also have meant a group of students would not have been able to access fees-free. Muslim students, for example, under their religious beliefs aren't able to borrow money. So they wouldn't have been able to access it.

"The vast bulk of the administrative burden – ie, checking eligibility – sits with the Tertiary Education Commission and not with the institutions."

Under the current system, the Government estimated how many students are eligible for fees-free study at each institution, and then effectively bulk-funded accordingly. Later this year there will be a reconciliation to deal with any "unders and overs".

National's tertiary education spokesman Paul Goldsmith said the issues raised by the vice-chancellors were valid, and reflected the rushed and ill-thought-through nature of the policy. That had created significant tension with the sector, he believed.

"If you just charge in and make changes without any consultation at all, then there is a very high risk of these unintended consequences."

On enrolment numbers, Hipkins said he expected an increase in tertiary participation over time, but that was only one measure of success. Modelling participation changes was extremely difficult. "I think we built in a five per cent buffer. But it will be what it will be."

Hipkins yesterday released a work programme for the next three years, which includes a review of NCEA and Tomorrow's Schools legislation.