Low-quality education providers will face the axe and universities and schools considered "high quality" will enjoy privileges, including the ability to offer prioritised visa processing to students.
Under changes aimed at attracting more international students to New Zealand, the Government announced yesterday it would also be made easier for foreign students to work while they study.
Full-time students will be allowed to work during all course breaks and doctoral and research masters students can find full-time work.
Those here to learn English will also be able to seek part-time employment.
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Tertiary Education, Skills and Employment Minister Steven Joyce says the changes will make New Zealand more attractive as an education destination.
However, migrant workers union Unemig is warning the changes could open new opportunities to exploit migrant workers.
"Student visa holders are the most affected group in migrant worker exploitation," said national co-ordinator Dennis Maga.
"Unlike immigration advisers, education advisers do not require to be licensed and this would just open up a new pathway to residence for them to promote to many who are not genuine students."
Mr Joyce said the amendments to rules relating to international students working will bring New Zealand in line with similar countries such as Australia.
Immigration no longer issues visas to students wanting to enrol with providers given a category four rating, the lowest status, by the New Zealand Qualifications Authority.
Last week, St George Institute of Learning in Auckland became the fifth private training establishment to be shut down by the New Zealand Qualifications Authority, along with at least 38 other institutions that faced "voluntary" closures since January.