Next year's funding boost for science courses and other associated subjects won't drive up enrolments in those fields, universities warn.
They also calculate that the government's decision to increase funding for STEM (science, technology, engineering and mathematics) subjects, but not for most other fields in 2026 is a net zero.
That's because this year's Budget allowed an emergency two-year 4% funding boost to lapse.
Craig Marshall, an associate professor at the University of Otago's School of Biomedical Sciences and a member of the Tertiary Education Union's council, told RNZ without a serious funding increase, universities would increasingly struggle to offer the research-informed teaching that defined them.
The ongoing decline in funding compared to inflation could prove fatal, he believed.
"I think it'll be incremental. You'll just see small losses here and there and everywhere else and at the end of it all it's very difficult to predict what that leads to, but perhaps the loss of a university."
Marshall said the latest decisions meant universities would struggle to offer some humanities courses and students would start to vote with their feet.
"What we're starting to see is students instead of coming to universities in New Zealand from school, they'll go to universities overseas. They see that as a better outcome.
"Increasingly, students opt now for postgrad graduate training outside of New Zealand, rather than in New Zealand. Some of the universities will be weakened, some may be fatally weakened."
Marshall agreed the government was unlikely to let a university to go under, but one or more could lose the ability to provide the research-informed teaching that fostered critical thought - in which case it would cease to be a university in all but name.
Universities New Zealand chief executive Chris Whelan said the long-term trend for university funding was poor, but none of the eight institutions was close to failing.
"It's becoming challenging to basically retain our position internationally.
"We shouldn't care about things like international rankings, but the reality is they do send quite important signals to academic staff, to people that want to do research collaborations with New Zealand researchers and to international students," he said, referring to league tables in which New Zealand universities had been falling.
"There is a tipping point where if funding got so low we were not able to maintain that quality, we would have a problem. But I don't think we're anywhere near that."
However, Whelan said the net effect of last month's Budget was no increase to total university funding next year. That was about as good as the sector could have expected under the circumstances.
But he said the government's decision to favour STEM subjects over humanities was mistaken.
"It's an unfortunate message. There seems to be a belief that somehow universities, if they're given more funding for science, technology, engineering, maths-type subjects, can persuade students to drop doing the liberal arts or social sciences and shift across.
"The reality is that's just not the case," he said.
All fields of university study contributed to the skilled workforce the government said it wanted, he said.
Universities minister Shane Reti told RNZ that was correct, but STEM subjects were more closely linked to productivity.
"The message we're sending is that we're particularly investing and funding those courses that clearly have a pathway to productivity and economic gain and these are generally the science and the STEM subjects."
Enrolments in those subjects had been increasing and the funding decision should encourage universities to increase the breadth and depth of their STEM programmes, Reti said, and universities were not sliding toward failure.
"Across the sector, there are some who are doing well and some who are struggling and indeed have been struggling for some period of time and and are receiving extra attention support and monitoring from TEC (the Tertiary Education Commission).
"But if we look at the big picture, there's a significant increase in student numbers this year... It's quite a change in trend from over the previous few years where student numbers have been falling away."
The government had allocated $111m over the next two years to cover growing university enrolments, he said.
He confirmed that the government had allocated enough funding to cover 99% of expected enrolments next year and the commission would be expected to cover the remainder from its reserves.
Changing shares of the enrolment pie
Ministry of Education Ministry show that sciences have lost ground against other subjects in terms of enrolments in Bachelors degrees in the past 10 years.
Considered by predominant field of study, the percentage of students enrolled in the "natural and physical sciences" dropped from 14 to 13% between 2024 and 2015.
Health enrolments rose from 17 to 20 percent while education, management and commerce, and the creative arts all dropped slightly.
Predominant field of study for 120,995 domestic students enrolled in Bachelors degree programmes in 2024 and 127,705 in 2015.
Subject in 2015 / in 2024
Sciences 14% / 13%
IT 6% / 7%
Engineering 3% / 3%
Arch and building 2% / 3%
Ag, environment 2% / 2%
Health 17% / 20%
Education 8%/ 7%
Management, commerce 20% /18%
Society and culture 33% / 33%
Creative arts 11% / 10%
