Secondary school retention rate in New Zealand - Data and Analysis (2006-2034)

IBISWorld forecasts the apparent retention rate of secondary school students to reach 84.2% in 2027, up 0.6 percentage points from the previous year. This continues a recovery that began in 2024 following a multi-year trough driven by the COVID-19 pandemic. Remote learning requirements, disrupted schooling and heightened household financial pressures during the pandemic years saw the national retention rate fall to 78.6% in 2023, its lowest level in over a decade, before steadily improving over the next few years. The recovery has been underpinned by a weak New Zealand labour market that reduced the appeal of early school exit. New Zealand's unemployment rate peaked at 5.4% in late 2025 before easing to 5.3% in the March 2026 quarter, with Westpac forecasting unemployment to remain elevated at 5.4% through the end of 2026 before declining towards 4.7% in 2027. Elevated unemployment reduces accessible entry-level and low-skilled employment for school-age young people, raising the opportunity cost of leaving education early and supporting retention. According to Ministry of Education data, the national retention rate reached 81.0% in 2024, with the improvement uneven across ethnic groups. In 2024, Asian students recorded the highest retention rate at 93.0%, followed by European/Pakeha at 81.4%, Pasifika at 79.8% and Maori at 67.1%, a disparity that represents both an ongoing equity challenge and a potential upside driver for future retention should targeted policy interventions prove effective.Several policy developments have shaped the retention environment. The final-year fees-free tertiary policy, which replaced the first-year fees-free scheme from January 2025, provided a financial incentive for students to complete secondary school and obtain NCEA qualifications required for tertiary admission. However, the Annual Maximum Fee Movement (AMFM) – the regulatory cap on annual fee increases for domestic tertiary students – was set at 6.0% for both 2025 and 2026, a significant step-up from the 2.8% cap applied in 2024, compounding the cost of tertiary study despite the fees-free policy. The 2026 Budget confirmed that the fees-free scheme would be discontinued at the end of 2026, removing a structural incentive for secondary school completion from 2027 onwards. Research suggests the fees-free policy had a limited measurable impact on widening access to tertiary education, with many barriers to participation arising well before students encounter tuition costs, indicating that its removal may not substantially shift retention behaviour at the margin. Overall, IBISWorld forecasts the secondary school retention rate to increase at an average annual rate of 0.96 percentage points over the five years through 2027.