Uncertainty created by US President Donald Trump’s policies may have bumped New Zealand up the tertiary education ladder of choice for international students, but the days of seeing them as cash cows are over, say sector chiefs.
With the Government aiming to “supercharge” growth of international student enrolments, targeting a doubling of the sector’s contribution to the economy to $7.2 billion by 2034, the spotlight is on the mood of the sector dubbed “export education”.
While Government underfunding of our universities remains a common complaint among their leaders, they also note a groundswell of change in how higher education provision needs to be approached, and how competition for students has become even fiercer despite Trump’s cooling effect on the biggest market for students, China.
As University of Auckland vice-chancellor Dawn Freshwater says, countries that New Zealand has tapped for students have been busy growing their own education sectors.
“So it started with China, it’s been across Southeast Asia, it’s India, it’s now Africa and Indonesia, but the reality is that those countries have now grown their own capacity and their own capability and they’re actually leapfrogging Western democracies in this regard and developing their own export industry,” she says.
China, she notes, has English-speaking campuses and, for India it’s a two-way street now, with education providers being urged to set up campuses there.
“That is changing the dynamic and I think it’s an interesting dynamic to watch – these new and emerging economies becoming quite assertive at a time when Donald Trump is actually undermining education per se ... so while you see all of this happening, the outlook is actually remaining very good.”
The University of Auckland, the only New Zealand university in the top 100 of the QS World University Rankings 2026, at 65th place, has more international students and more post-graduate foreign students than it’s ever had, she says.
“So while we remain competitive, while we’re at that high quality, while we remain fairly neutral in terms of our positioning in the world and the environment we’re in, the outlook is exceptionally good.
“Having said that, you don’t just exploit the moment, you explore the opportunities for the future which won’t be the same.”
Freshwater says the business model for providing access to higher education is broken.
“Governments can’t keep cross-subsidising and students can’t keep carrying debt. Importantly, not everyone needs an undergraduate degree. That model has grown and grown but there has not been a really clear understanding of how the rest of the sector needs to think about its response to growing technology, increasing awareness of the future of work, different sorts of skill sets and international conflict.”
Freshwater says new opportunities include transnational education or hybrid models, where students don’t have to leave their own country for the entirety of their programme.
“Working in partnerships is going to be much more critical for the future. The opportunities are there if we’re able to find the right partners and to maintain the level of confidence and quality. But also, I think the next big ticket is going to be how we respond to AI.
“We need to think about how we educate our graduates globally to ask questions, not answer them, [as with] traditional education in an exam. With AI and prompt engineering, it’s all about asking the right questions.
“Overseas partnerships will help with that ... but to be seen as transnational overseas means people will be choosing carefully who they partner with, because for too long now, international students have been seen as cash cows.”
Mark Rushworth, group chief executive of New Zealand’s largest private tertiary education provider, UP Education, says this country has long been the fifth-ranked destination option for students, competing against, in order, the US, UK, Canada and Australia.
But in the last six months there’s been significant change in that pecking order.
“We have a partnership with the largest international school in Beijing. They typically this time of year send 70% of their students to the US. When we were talking to them in June that number had dropped to 35% wanting to go to the US because they are uncertain about how to deal with the [US] policies and the position towards China.
“For them, suddenly other markets are really, really attractive. The benefits for New Zealand are that in the UK there’s a little bit of uncertainty around their position on export education, Canada is full and, in the Australian market, the Labor government is putting on some caps.
“All of that is a great opportunity for New Zealand.”
Also a significant player in the Australian sector, UP Education focuses on providing graduates for sectors with skill shortages, including construction, teaching, nursing, aged care and early childhood education.
Rushworth says due to the shift within the top five destination lineup and its 75% qualification completion rate (he says the polytechnic average is around 50%), UP is seeing record enrolments at its colleges in the skills shortage areas and he’s optimistic New Zealand will do well for international tertiary enrolments in 2026 and 2027.
Victoria University of Wellington vice-chancellor Nic Smith says a “huge” part of the export education market is Southeast Asia and “a huge part of the recruitment process is actually driven by university rankings”.
He says, “Rankings are under pressure, certainly in New Zealand for many reasons, but one is that systemic funding of institutions has been about half the rate of inflation for quite some time.
“We haven’t seen a change in those kinds of settings but we certainly have seen an enthusiasm for international students returning to this country, both in the rhetoric and immigration settings.
“I think globally, now is quite a strong time for New Zealand in international education. There’s the post-Covid rebound but we’ve certainly seen significant changes in what we might think of as competitive jurisdictions.
“If you think about the emerging middle class, particularly in China but in Southeast Asia in general, they hold education as an enormous priority and are spending significant money to educate often single sons or daughters.
“It’s a massive investment and one that is very sensitive to risks and uncertainties.
“The idea that your visa could be censored halfway through your study, which is what we’ve seen in the US, is destabilising for them. When I was in China with the Prime Minister recently, that was a real concern. I heard it over and over again in anecdotes.”
The perception of Australia as a stable, secure haven for international students had also been altered by that country’s political concerns in immigration policy and there has also been “minor posturing” from Canada and the UK, Smith says.
“All of those point to an opportunity for New Zealand, and the question will be are we able to do that translation to demand. The signs are good but I wouldn’t want to commit to the fact it’s all happening at this point yet.”
What are the obstacles to growing New Zealand’s share of the pie?
“China, a huge market for us, and to a lesser extent, India, Vietnam, Malaysia and Indonesia are all investing in their own university systems in a really fundamental way,” Smith says.
“The rise of particularly the Chinese universities and rankings has been really extraordinary.”
Against the appeal for foreign parents of New Zealand being a safe, secure, liberal democracy and offering rich and varied cultural experiences, the situation is that broadly speaking over the past 20 years, government funding of universities has been around half the rate of inflation, Smith says.
“And it’s very normal for universities, and vice-chancellors in particular, to say we’re underfunded. I fully accept that. But the reality is, if we look at investments being made in many of the countries from which we are looking to attract students, we are falling behind.
“In China, for example, most of the students who come to New Zealand are those who have not got into their choice of Chinese institutions. If we’re going to continue to compete, that’s going to be an issue as the top Chinese institutions continue to progress. That’s going to be a problem.”
Smith says it’s interesting that much of the rankings of New Zealand universities are supported by their positions in the arts and humanities.
“We do much better [there] on an international ranking scale than we do sometimes in the technologies and the sciences. I think in part that’s because to be really competitive on the world stage in science and technology requires a really significant investment in infrastructure.”
The paradox, he says, is that at a domestic funding policy level, science and technology is considered the most important area in rankings.
Massey University vice-chancellor Jan Thomas says at a national level, demand for universities appears to be flatlining. But international education is “one of the lights on the horizon in terms of being a service sector that diversifies the economy away from commodities and continues to raise the reputation of New Zealand around the world in a very positive way”, she says.
“We continue to have a failure of government to commit to investing in universities and research in a substantial way and so the optimism comes from the potential for our international education.”
Thomas says Massey’s veterinary science programme, highest ranked in the Southern Hemisphere and 19th globally, is not funded to the cost of educating a veterinary student and maintaining its global accreditation. Yet it provides a critical workforce for New Zealand’s economic cornerstone, the food and fibre industry, and for the food safety and agricultural products sectors.
“International education is a critical part of maintaining the overall funding and sustainability of our universities. If we didn’t have international students it would be devastating, as we saw in Covid.
“They have an economic benefit but I argue they have a significant social and educational benefit as well ... we find our graduates in high-level positions in government and industry around the world. There’s an international relations advantage of having graduates of a New Zealand university in positions of authority in other countries.”
Universities NZ says international education generated at least $1.25b for the economy last year and that university earnings from export education represents 1.2% of all exports of goods and services. Education NZ says $586 million of the $1b-plus went to universities.