Government officials have warned that "corruption" and "organised crime" have infiltrated the system granting student visas from India.
Documents obtained by Newshub show a senior immigration official warning that "organised crime may have penetrated the [student visa] process".
The Mumbai-based official also warned of "fraud" and "organised corruption".
The documents raise questions about corruption in the process to enter New Zealand and worker exploitation once people arrive.
In January this year, Justin Alves - a risk manager for Immigration New Zealand - described "Indian families crippled with debt who can't actually afford to study here" as a "major problem" for New Zealand.
He quoted a complaint from a former student that said: "I struggled a lot in Auckland for food - even for job... I invested $18,000 in Auckland...If you don't have jobs why you are encouraging students from India to come to New Zealand?"
Mr Alves described the written complaint as "the reality for a significant number" of students.
Immigration Minister Michael Woodhouse admitted that "hundreds" of students could be here illegally.
"It could be - I don't want to put a figure on it."
Mr Woodhouse said the Government had cut down on student visas from India since a crackdown last year.
"We picked that up, we're managing it, we've put extra resource into our Mumbai and Delhi offices and I'm satisfied we are managing it well."
But Labour leader Andrew Little said the Government was leaving New Zealand's reputation open to damage.
"The Government has seen - 'gee there is a quid to be made here', let's let it all happen and not care about the systems, not care that people are being exploited and ripped off."
Mr Little said he would cut student visa numbers if elected.
"If there are student visas issued on the basis that you can get work here whenever you like, actually we can't keep that promise - so we've got to look at those numbers".
International education is a $3.3 billion industry and now New Zealand's fifth-largest export earner.
In total, 26,782 student visas were issued in the past year including 8756 students from India.
The rules allow them to work for 20 hours a week, work full-time in holidays and has a pathway so they can stay on and become New Zealand residents.