An extra 765 university places and 455 polytechnic places will be funded and higher subsidies per student will be paid, Tertiary Education Minister Steven Joyce announced.
But it appears there will be no extra money, with a fund for infrastructure improvements removed and the money reallocated to student subsidies.
No details were available last night on how much additional funding institutions could expect in student subsidies, or where the extra student places would be allocated.
The existing fee maxima system for tertiary courses has been scrapped and replaced with a 4% across-the-board increase next year.
That would mean even more expensive fees for students enrolled in courses such as dentistry, medicine and aviation, New Zealand Union of Students Association co-president David Do said yesterday, calling the change "a disturbing development".
The Budget confirmed several changes to student loans which had already been signalled. They include a seven-year lifetime limit on loans for undergraduate study and the introduction of an annual $40 administration fee for people who have finished their study but who still have student loans.
