The Government is potentially spending up to $53 million a year on its flagship fees-free policy for students who have either withdrawn from or failed tertiary courses.
Universities New Zealand Chris Whelan told Mike Hosking the statistics show a worrying trend, which they are watching closely.
"Its no surprise 12 percent of students don't complete their first year of study for a range of reasons. We are watching with interest to see if that number goes up this year as a result of students not having to pay the fees themselves, or if it stays the same.
Whelan says that the policy was one of Labour's biggest campaign promises, one which they certainly won't want to admit defeat on or show any sign of weakness.
"The government's reason for introducing this fee was to reduce barriers to participation, not to increase numbers. The numbers have remained completely flat, generally you are on a pathway to university at school or not, the chance $6000 of free fees will change your plans is unlikely.
This was their election promise and they went into this with their eyes wide open, many people say they should of done this for the third year of study, and I tend to agree with that."
Students withdrawing from courses can lead to a full or partial refund if they withdraw within a time-frame set by the tertiary provider.
LISTEN ABOVE AS CHRIS WHELAN SPEAKS TO MIKE HOSKING