Invercargill's Southern Institute of Technology offers free accommodation

Invercargill's Southern Institute of Technology (SIT) has been attracting students south for years, thanks to a popular 'Zero Fees' scheme.

That success is now under threat from the Government's new free-fees policy - but SIT has come up with another gift for students.

Over the past 17 years, tens of thousands have graduated from courses ranging from hairdressing to IT, all with the help of SIT's Zero Fees scheme.

"We're really proud of that," says Invercargill Mayor Tim Shadbolt. "And then, of course, the new Government came along and said the whole country can have zero-fees education."

Invercargill's initiative helped turn around a declining population, retaining the city's young people and attracting others south.

When SIT started its Zero Fees scheme back in 2001, it had about 1400 students - there are more than 5000 studying onsite.

Now SIT's responded to the Government's challenge by offering free accommodation. Eligible students can get a 'Mayor Tim Shadbolt Bursary', gifting them a free room at one of SIT's apartments.

"Or alternatively, they can get $100 a week from us to go towards their own accommodation, whether they're staying at home or whether they are renting," says SIT chief executive Penny Simmonds.

That's possible thanks to the extra Government funding for students who previously would have studied for free.

The accommodation offer is getting the thumbs-up from students, who say it will more likely to attract them to SIT.

Mr Shadbolt agrees.

"I'll tell you what, If you're a student in Invercargill, you'll be sitting pretty next year," he says. "It really is a bold move and an important one."

And one he hopes will ensure the southern city retains its educational edge.