More than half the students who this week started university for their first year will fail to complete their degree in the standard time, according to the latest Ministry of Education figures.
The ministry report, Tertiary Profiles and Trends, shows just 40 per cent of students who began a bachelors
degree in 1999 had completed the qualification four years later.
The Ministry of Education said the figures were expected to be much the same for the 2005 intake.
Many students drop out after the first few weeks or months because they are not mature enough for self-directed study, according to the University Students' Association.
Co-president Andrew Kirton said that financial support was also an integral part of the problem.
"We don't want students worried about working in cafes or garages to get by. Academic performance would increase if students could concentrate on study rather than pumping gas," he said. Retention rates have come under closer scrutiny since becoming a performance measure for a pocket of Government funding.
About 5 per cent of the money is under threat if institutions fail to take steps to improve completion of papers two years running.
Universities are increasingly looking for ways to prevent students dropping out.
At the University of Auckland there is a support centre, faculty mentoring schemes and a new programme where older students offer intensive support to the new intake for their first six weeks.
Deputy Vice-Chancellor Raewyn Dalziel said: "Everyone wants to improve student retention and we are always looking for new ideas to do that. Focus on the transition period is the thinking at the moment."
The university had also begunconcentrating on smaller class sizes so students got more personal contact, and had introduced an on-line monitoring system.
Roger Smyth, the ministry's manager for tertiary sector performance, said there could be a wealth of reasons for the completion rate including switching courses, transferring universities, personal problems and financial pressures.
The apparently low rate was not cause for alarm.
"We don't have a particular problem, but it's something we have a watching brief on."
Forty per cent was similar to universities in other countries and higher than the OECD average, he said.
