Agents say fraud and tougher rules are driving high refusal rates for foreign students applying from India, one of the biggest source countries for international students.
Immigration New Zealand figures show it has refused 49 percent of 2694 study visa applications made from India in the first three months of this year, up from 42 percent in the full year of 2023.
Nepal, Pakistan and Bangladesh had slightly higher decline rates but much lower numbers of applications.
By comparison, China, which provided more students than India, had a decline rate of 3.5 percent for offshore applications this year.
Immigration New Zealand said it had turned down about a quarter of applications to polytechnics and private institutions and five percent of applications to universities.
Tertiary institutions are trying to rebuild their foreign enrolments, which dipped following pandemic-related border closures.
However, previous surges in enrolments from India have been accompanied by high levels of suspected fraud in study visa applications, exploitation of students once they are in the country, and suspected corruption among tertiary institute staff.
Immigration adviser Arunima Dhingra said between September last year and February this year, Immigration had approved only 57 percent of study visa applications from Indian students and most of those students (83 percent) were going to universities.
"That's primarily because we are seeing fraud coming out of the market. We are seeing that Immigration has really tightened around the funds requirements. They have also tightened around bona fides and the gaps and the backgrounds of the students so it is a multitude of factors."
'Genuine students are missing out. That's undeniable'
Dhingra said immigration policies needed to be balanced because Immigration NZ was refusing visas to genuine students.
"A hundred percent, genuine students are missing out. That's undeniable."
Immigration NZ no longer processed visa applications in India and that was contributing to incorrect decisions, because New Zealand-based staff did not have such a good understanding of India, Dhingra said.
The current settings favoured students who came to study one-year Master's degrees, but the government should make it easier for students to study Bachelor's degrees, because those graduates were better integrated to New Zealand workplaces and society by the time they finished their studies, she said.
"Showing funds for a Bachelor's degree is very bureaucratic, it is very convoluted which means even if students have the funds they will most likely not meet the requirements," she said.
Irfaan Arafin, from the International Students Association, said students sometimes found visa processing slow, and there appeared to be an emerging problem with Immigration NZ failing to tell applicants why a visa application had been declined.
"That is probably one unfair area, because people don't know exactly why the application was declined; Was it because of the chest x-ray, was it because of the bank account details, was it because of proof of address?" he said.
"If you don't know where you're lacking, you won't be able to prepare to reapply."
Immigration New Zealand says it turns down applications if they are missing information, if it is not convinced the applicant will stick to the conditions of their visa, or if the student cannot prove they can afford to study in New Zealand.
It says students with insufficient funds are at risk of working more than their visa conditions allow and at risk of being exploited.
Same problems seen nearly 10 years, adviser says
Immigration adviser Arun Jacob said the same problems which dogged the rapid expansion of the Indian market nearly 10 years ago were re-emerging.
Jacob said some student recruitment agencies were submitting applications for students who did not really want to study in New Zealand. Instead they wanted to work.
"These low-grade agencies, they also put in a lot of fake documents. They actually encourage students to buy their English tests or they even organise those documents. They organise fake bank statements, they organise all kinds of things just to get it across the line just so they can earn their commission," he said.
He believed Immigration New Zealand should prioritise trustworthy agencies with high approval rates for their student visa applications.
If Immigration NZ was too lax, problems with student exploitation would re-emerge, Jacob said.