Immigration advisers told the Herald that agents found it easier to promote regional campuses because they could tell students they could work while they studied, earning $200 a day in jobs such as fruit picking and packing.
Vijay Singh, 26, from Punjab, said he enrolled to study at a Bay of Plenty institution because his agent told him that doing so would lead to "automatic residency".
"I was told New Zealand wanted migrants in smaller cities, so studying there will give automatic permanent residency," said Mr Singh, who did not want to name his private training establishment.
"I borrowed $20,000 to pay for everything because they said ... I will get residency and I can sponsor my whole family to come here.
"I can also work in fruit picking to pay back the money that I owed."
Mr Singh arrived in February but moved to Auckland last month and is now looking for alternative pathways to permanent residence.
Munish Sekhri, spokesman for the India-based group Licensed Immigration Advisers of New Zealand (Lianz), said that up to eight in 10 Indian students here might have been misled by their agents.
"The problem is they are too scared to highlight their problems as they don't want to be in the eyes of Immigration," said Mr Sekhri, a licensed immigration adviser.
Sizzling Career Solutions, a New Delhi-based student recruitment agency, claimed in an email advertisement: "Candidates studying in Hamilton will get an edge of 30 points while filing for permanent residency."
Managing director Satpal Gulia said it was recruiting students for the Waikato Institute of Technology, also known as Wintec.
"The mail actually meant to convey that students will get bonus points eventually when they file for PR [permanent residence] because they would have stayed in a region outside Auckland," he said.
However, Wintec chief executive Mark Flowers said it terminated the agent's agreement due to the false claim after being alerted by Immigration New Zealand last Thursday.
Immigration New Zealand spokesman Marc Piercey said changes introduced last month gave 30 bonus points to residency applicants with job offers outside Auckland, but did not apply to students.
June Ranson, chairwoman of the New Zealand Association for Migration and Investment, said unregulated overseas agents were tarnishing New Zealand's image and reputation.
An Education New Zealand spokeswoman said students who believed they had been misled should first make a complaint to their education provider.
International students in the regions
• 104,418: Total in NZ in the first eight months of 2015.
• 11,760: Increase over the same period last year.
• 15-18%: Growth in Auckland, Waikato, Bay of Plenty, and Canterbury.
• 10-14%: Growth in Northland, Taranaki and Nelson.
• 11%: Increase in first-time Indian student enrolments
• 57% Increase in returning Indian students
(Source: Education New Zealand)
