Academics say they are being pressured to change assessments, ignore cheating and pass incompetent students so their institutions can pocket the students' fees.
A survey of 1006 members of the tertiary education union has found 63 per cent say they have come under more pressure in the past decade to pass a higher percentage of students.
"We have been pressured to change assessments, ignore cheating, pass students who are between 45 and 48 per cent," one academic said.
Another said: "The emphasis on successful completion rates is hurting education standards. Lecturers [are] under intense pressure to pass students by managers; leading to acts of shameful manipulations, low quality assessments and exams."
A third said: "Declining funding also means we have to take more students on as we need the efts [equivalent fulltime student funding], but doing so means we have to let anybody in (and the university refuses to use minimum entry requirements)."
The union's Manukau Institute of Technology branch president Jill Jones said her faculty was given a target to pass 85 per cent of students.
"A discussion of those pass rates forms part of our performance review," she said.
"The difficulty for staff is that we have no control or input into who is actually enrolled in our courses, and it takes no account of the level of English of some of the students."
The survey found 66 per cent of university staff and 69 per cent of polytechnic staff said pressure had got worse in the past decade to admit students who did not have the required prerequisites or adequate prior skills or experience.
One respondent said: "The increasing number of students enrolling who have not attained a prerequisite literacy standard has put a lot of pressure on services like ours, yet there is no corresponding response from the university to increase our resourcing."
University academics were also unhappy with growing pressure to produce sometimes "worthless" research since funding became tied to publications in prestigious journals in 2003.
"The performance-based research fund and accreditation requires a continual churning of publications, even though most are worthless, and any high risk but useful research isn't attempted because of the need to get publications," one said.
An education lecturer said university managers saw publications in academic journals as worth more than both teaching students and publishing research in "teacher-accessible formats".
Union president Dr Sandra Grey said one university academic was told recently that they could not do more than 15-minute consultations with students so that they could focus on their research.
The performance-based research fund and accreditation requires a continual churning of publications, even though most are worthless.
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Auckland University vice-chancellor Dr Stuart McCutcheon, who chairs Universities New Zealand, denies that universities are relaxing standards for either entering or passing courses.
University of Auckland's domestic students entering from school with grade point averages of more than five had risen from 35 per cent a decade ago to 55 per cent this year, and pass rates had not changed significantly, he said.
"So we have raised our entry standards. I think the universities generally have done that," he said.
"It doesn't make sense that you would raise your entry standards and tell your staff to let everybody through."
He also defended the performance-based research fund.
"You could say the Government should just give us the money and not care about the quality of the research. I don't think that would be right," he said.
McCutcheon noted that only one-ninth of the union's 9000 members returned the survey, and suggested that those who responded were more likely than the rest to be "disgruntled".