Immigration Minister Iain Lees-Galloway says low-quality tertiary providers will be targeted by proposed changes to immigration laws.
"If they're in the business of pretending to provide an education in order to rort the immigration system, they may have a problem on their hands," he told Newshub Nation on Saturday morning.
The proposed changes would restrict students' ability to stay on in New Zealand after they finish studying. Those studying at bachelor's degree level could continue to work in the country for up to three years.
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But those who obtain a qualification below this level would only be able to work in New Zealand for one year, and would need to undertake at least two years of study to be eligible for post-study work rights.
The move is a response to concerns qualifications were being used as a shortcut to gaining residency.
"One aspect of the post-study work visas under the current settings is that after the first year, students have to demonstrate that they're in a job that is relevant to the area that they have studied," Mr Lees-Galloway says.
"Unfortunately, what's resulted from that is employers saying to those students, 'Look - I'll enhance your job description or I'll try to make it look like you're working in an area you've studied, and in return for that I expect a big payment'.
"So a lot of students are going into those jobs then getting their wages, then they walk down to the ATM, they get cash out and they pay that back to the employer."
Rules are more relaxed for those studying at a doctorate level, with their partner and children also being eligible for an open work visa as long as their qualification is specified on the Long Term Skills Shortage List.
Mr Lees-Galloway says the changes will mean some students choose not to come here "because they won't see that path to residency", or they will choose to study at a higher level - both of which would be good outcomes.
"We're not that fixated on the numbers in terms of how many students come here."
It is anticipated the changes could result in losses of $260 million to the $4.5 billion education sector.
"But let's look at where those cuts are going to happen," Mr Lees-Galloway says.
"They're going to happen amongst the low-quality courses… where students get an education that isn't much value to them."
Mr Lees-Galloway gave example of three business schools in Te Puke which taught students generic business skills while making them available to work on Kiwifruit orchards. They have since been shut down.
"We need to knock out that exploitation and we need to demonstrate to students there is a real value proposition in New Zealand."
Public consultation on the changes will open on June 5.
The proposed changes include:
- removing the requirement for post-study work visas to be sponsored by a particular employer
- providing a one-year post-study work visa for non-degree level 7 or below qualifications
- providing a three-year post-study work visa for degree level 7 or above qualifications
- requiring students completing non-degree level 7 or below qualifications to undertake at least two years of study in order to gain eligibility for post-study work rights
- requiring international students studying level 8 or 9 qualifications to be in an area specified in the Long Term Skills Shortage - List in order for their partner to be eligible for an open work visa, and in turn the partner's dependent children to be eligible for fee-free compulsory schooling.