The Qualifications Authority is threatening to strip seven private institutions of the right to assess the English of students who want to enrol with them.
The move is part of a crackdown on the abuse on the abuse of English-language testing rules in the country's multi-billion-dollar foreign student industry.
The Authority has also proposed rule changes that will block all private institutions and polytechnics from doing their own English assessments of students from high-risk countries such as India, Vietnam and the Philippines.
Currently, highly-trusted institutions are allowed to assess potential students' English themselves, rather than use external, independent testing systems such as IELTS and TOEFL.
But some private training establishments or PTEs have been accepting students only for Immigration New Zealand to decide they have insufficient English to complete their studies and refuse to grant them a student visa.
In a statement, the Qualifications Authority said it is revoking the right of those institutions to do to their own assessments.
"NZQA is taking compliance action against PTEs with student visa decline rates of more than 30 per cent of visa applications, and for whom Immigration New Zealand issues more than 100 student visas per year. Notices of intention to impose a condition on registration have already been issued to several PTEs."
The Authority is also consulting on a plan to stop all private providers and polytechnics from doing their own assessments of students from countries where the student visa approval rate is below 90 percent.
Those countries would also be dropped from a rule that waives English testing for students who have spent five years at an English-medium school.
Currently that would include New Zealand's second-most important source of international students, India, as well as the Philippines and Vietnam.
Unlikely to solve the problem
Feroz Ali is the Chairperson of Independent Tertiary Institutions, which represents 14 PTEs.
He said that is unlikely to solve the problem because dodgy institutions will continue to enrol students they should not accept.
"If China remains as a low-risk country as per the proposal, what's going to happen? Are we saying that the institutions that currently are abusing the Indian system won't go and abuse the Chinese system," he said.
Mr Ali said NZQA should go back to requiring independent English language tests for students from all countries at all institutions.
But the spokesperson for the Auckland International Education Group of 30 PTEs that enrol foreign students, Paul Chalmers thinks the changes are a good idea.
However he said if the abuse continues the group would support a return to independent English testing for all institutions.
"If you're running a very good English language testing programme, and it needs to be independently run, I don't think the individual colleges should run it - I think that's okay. However as an ultimate backstop, going to the TOEFL and IELTS testing is going to assure quality."
The chief executive of Whitireia Polytechnic in Porirua, Don Campbell, said his institution does not want to lose the right to do its own assessments of students from countries such as India.
Whitireia has an Auckland campus specifically for international students and Mr Campbell believes student numbers are likely to suffer if the rules change.
"The impact, if this does go ahead, on Whitireia is likely to be quite significant. A lot of our students now come from India. Clearly it's going to make it more expensive to work through the approved external assessment processes and so that's likely to reduce the number of international students studying with us."
Don Campbell said the problems are with private providers, and polytechnics should be left alone.
"The largest number of students from India are coming into PTEs and it's PTEs where the problems have previously been identified so I'm just not too sure why polytechnics are being lumped in with the PTEs. I think polytechs should be left out of this one."
Unitec is the biggest enroller of international students among polytechnics and its chief executive, Rick Ede, approves of the Qualifications' Authority's plans.
He said Unitec does not do its own English testing even though it could, but even the independent tests are not fool-proof and sometimes students try to cheat the system.
"It's certainly the case that from time to time we have encountered people who try and put one across us, but it doesn't take too much research and due diligence to weed those students out."