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Student numbers at the University of Otago are set to grow by the largest amount since 2010, but the university is unsure how much Labour's free tertiary education policy is behind the increase.
Vice-chancellor Harlene Hayne announced yesterday numbers were set to increase by 322 equivalent full-time students (EFTS) compared to this time last year, and enrolments were expected to climb by a further 1100 EFTS by the end of the year.
Enrolment numbers rose in 2010 but fell steadily between 2010 and 2015, picking up slightly in 2016 and dropping again in 2017.
Prof Hayne told a university council meeting yesterday the extra students were a ''fantastic'' start to the academic year.
The university was also due to break two records, for the number of Maori and the number of Pacific students attending.
It was likely Maori enrolments would exceed 2000 for the first time, and there would be close to 1000 Pacific students.
There was growth in both domestic and international enrolments and higher numbers of students in the sciences and the humanities departments, and on the health sciences course.
The increases were partly offset by a drop commerce numbers.
Prof Hayne said while there had been much interest in the impact of Labour's fees free on enrolments, that was not something the university was able to comment on until the enrolment situation had settled down.
''Other factors, such as the availability of additional places in our residential colleges and the general liveability and affordability of Dunedin for students have been more important contributors to the positive 2018 enrolment situation,'' she said.
Otago Chamber of Commerce president David Shelton said there was no doubt the increase in student numbers was positive for Dunedin's economy.
However, Mr Shelton questioned whether some students were taking advantage of the fees free scheme to essentially have a ''gap year'' at university, without knowing what they would do in their second year of study.
He also wondered whether some students were now going to university rather than considering going into a trade.
Prof Hayne said despite having well over 100 additional beds available to first-year students compared with 2017, the university's residential colleges had started this year ''absolutely chockablock full''.
School results also demonstrated the students were ''the most academically gifted'' cohort ever to attend the University of Otago, Prof Hayne said.
Last year, lower than expected numbers of domestic students contributed to the university's operating surplus being below budget at the end of 2017.
The minutes from February's finance and budget committee meeting, presented yesterday, showed the university's operating surplus dropped to $16.2 million in 2017, about $1.5 million less than expected and $10 million less than it was in 2016.
''The underperformance against budget, and last year, was primarily due to lower domestic student enrolments, provision for the impact of the support services review and an actuarial increase in the valuation of long-term employee contractual entitlements,'' the report said.
Finance and funding director Sharon van Turnhout told the council the university's performance was still excellent, despite the lower surplus.
The capital expenditure for the year was less than expected at only $112.8 million.
Ms Van Turnhout said work on two major projects, the research support facilities building and School of Dentistry upgrade and extension had been delayed, which contributed to the university spending $72.8 million less than predicted.