It comes at a time when the university is grappling with both an attempt to return to surplus and increase its domestic and international roll.
The Tertiary Education Commission (TEC) has set targets for the number of domestic and international students for the university, but so far it has not agreed to fully fund all domestic students.
Otago University director of analytics and reporting David Thomson said the situation of having more domestic enrolments than universities were funded for at this point of the year, and then having to secure additional funding, was routine for all tertiary institutions.
‘‘This is especially so when their domestic enrolments are growing.’’
Mr Thomson said the TEC assessed enrolments across the entire tertiary sector and the funding demand this was creating.
‘‘Much of our growth is in areas very well aligned to the government’s current priorities (e.g. Stem — science, technology, technology and mathematics), so we are well positioned to secure a share of any additional funding that is available.
‘‘We are being cautious in our assumptions around additional government DQ (delivery and quality) funding given signalling from the TEC this year about its overall funding envelope.
‘‘For 2026, we originally budgeted $307.5 million in DQ EFTS [equivalent fulltime student] funding. In our most recent re-forecast, we have been cautious and reduced that assumption to $305.7m for this year. So, a reduction of $1.8m.’’
Student income nonetheless remained $1.1m ‘‘favourable’’ largely because of international and domestic tuition fees due to enrolments being higher than expected.
Otago University recorded a 5% increase in enrolments for the start of 2026.
TEC head of delivery Gillian Dudgeon said there was a presently ‘‘high level of demand’’ at universities, due to a peak in expected school leavers moving into tertiary education and high unemployment.
‘‘This is the first time that overall government funding has been insufficient to fully meet student demand.
‘‘Throughout the second half of 2025, we signalled to all tertiary education organisations that they should expect to operate with the same or less government funding this year.’’
Ms Dudgeon said the TEC had made trade-offs in their funding for this year.
‘‘We have consistently signalled to tertiary education organisations that funding decisions would focus on areas of the economy and qualifications identified by the government priorities.’’
While the TEC would not have paid a tuition subsidy for the unfunded students, all tertiary organisations would still have access to other sources of funding from those additional students through student tuition fees.
‘‘In addition, universities where most of the additional enrolments occurred have greater diversification of revenue through research income and international student fees.’’
Asked whether it was open to negotiating a deal with Otago University, Ms Dudgeon said tertiary organisations must talk to TEC if they expected enrolments to exceed funded places.
‘‘The responsibility for ensuring financial sustainability lies with the governing council of each tertiary organisation.’’
