International education providers with links to visa fraud should be named and shamed, the Labour Party said after new data showed "endemic" levels of fraudulent activity.
Documents released to Labour under the Official Information Act reveal the huge increase in fraudulent applications by immigration agents representing Indian students wanting to study in New Zealand.
It comes as Prime Minister John Key heads to India, which is a major source of students for New Zealand's $1 billion international education sector.
Immigration New Zealand began taking a tougher line on student visas in May out of concern about fraudulent activity.
International students have to prove they can financially support themselves in New Zealand, and some India-based agents had been using fraudulent bank statements in visa applications, assisted by corrupt bank managers.
Immigration New Zealand (INZ) documents released to Labour showed the number of fraud cases had risen from 75 in April to 640 cases in August.
The number of agents involved in fraudulent activity rose from 60 to 300 over the same period.
Some of the students' applications have been found to be false months after arriving in the country, and they are now facing deportation. They are appealing to the Government for the deportation orders to be cancelled, saying they were misled by agents.
The Government has set a goal of growing the international education sector to $5 billion by 2025.
Labour Party immigration spokesman Iain Lees-Galloway said the fraud problems encountered by INZ were a warning sign, and the department would need more funding to cope with further growth in the sector.
He said the education providers, which enlisted the agents, needed to show more accountability.
In one case, an unnamed institute was linked to 47 cases of fraud alone. Others were linked to more than 30 cases.
Their details were redacted in the INZ documents, and Lees-Galloway said they should now be named to encourage accountability.
Tertiary Education Minister Steven Joyce ruled out naming the providers, saying that would go against natural justice.
He also said the rise in fraud cases reflected the tougher checks by INZ, and did not necessarily indicate a rise in wrongdoing.
The onus was on the providers to ensure their agents were not behaving illegally, he said.
Law changes which came into effect in July mean providers are directly responsible for their agents. Institutes which get a high number of rejected applications could eventually lose their ability to enrol students.
To date, the most serious sanctions had not been imposed on any institutions, despite evidence in the INZ documents of repeat offenders.
Joyce said the providers had been given an opportunity to clean up their act before they faced any potential punishments.
The INZ documents also showed the cat-and-mouse game being played between INZ officials and immigration agents.
Agents who were found to have submitted fraudulent applications often re-emerged under a new name, which INZ called "phoenixing". INZ said their numerous identities were difficult to track.
About a quarter of new agents were believed to be old agents "re-branding themselves".
However, the number of applications from India has now slowed, and INZ said this showed its crackdown was having a positive impact.