Schools with thousands of international students have been called in for a warning meeting after top officials feared they showed similar problems to a college which shut down after a cheating scandal.
NZQA deputy chief executive Grant Klinkum and Immigration NZ deputy chief executive Nigel Bickle asked the 18 education providers involved to explain why more than 30 per cent of their Indian student visa applications were refused.
Immigration NZ has described rejection rates at this level as "serious cause for concern" in a market riddled with fraud.
A spokeswoman for Tertiary Education Minister Steven Joyce said NZQA and Immigration believed the schools showed similar characteristics to the International Academy of New Zealand, which shut down in August after two staff went public with claims they were told to prepare fake results for more than 250 English language tests.
When the IANZ students were forced to sit independently monitored retests, only 14 per cent passed and 70 fell well short of the standard required to take their courses.
The spokeswoman said the shared characteristics with IANZ included many students from one nationality, falling evaluation ratings, a history of student complaints, rapid enrolment growth, Immigration concerns over agents used by the schools and NZQA concerns over their business diploma programmes.
• READ MORE: Student visa fraud: 'It's not about education'
The providers were of concern to NZQA and Immigration NZ and would be subject to stronger scrutiny, which could include unannounced inspections.
However the head of one school called to the October 31 meeting in Immigration NZ's Auckland office, Newton College of Business and Technology director Paul Chalmers, has questioned the figures and called the process "a shambles".
Chalmers said 15 out of 26 students identified by Immigration NZ as being declined entry to New Zealand for financial irregularities were in fact approved and at his college.
Chalmers added that his college took the issue of fraud in the Indian student market very seriously and was sending all applications to an independent law form for vetting.
Immigration NZ said it stood by its figures but noted that a provider could submit more information.
The meeting follows a series of high-profile problems in international education, which has become New Zealand's fourth biggest export industry worth $4.28 billion a year.
The issues, explored in a three-part Herald series starting today, include:
• Visa applications from India have been hit by widespread organised fraud
• Investigations are under way into 58 education providers
• Employers have made students pay tens of thousands of dollars for jobs to get work visas
• Worried officials have warned the Government that low-skilled former international students working mainly in shops, hotels and restaurants make up almost half the country's intake of skilled migrants.
Figures supplied to the Herald under the Official Information Act suggest most or all of the schools called to the August meeting were part of a wider group of 58 education providers - including 10 of the country's 16 polytechnics - which had more than 30 per cent of Indian student visa applications rejected from December 1 2015 to September 30 2016.
Most had more than half their applications rejected. The refusal rates went as high as 100 per cent and eight schools had more than 300 students declined.
Waiariki Bay of Plenty Polytechnic (now renamed Toi Ohomai Institute of Technology) had 570 students declined entry, the second-highest number on the list and a 57 per cent rejection rate.
Interim chief executive Neil Barns said he was not invited to the meeting but had received a personal call from Klinkum at NZQA and assured him Toi Ohomai would make improvements.
The institute was now sharing information on visa applications with Immigration NZ's Mumbai office and checking its existing agents for fraud. Its decline rate had dropped to to 31 per cent in September and 37 per cent in October.
Barns said he fully supported the official crackdown because it was well known in the industry that some schools were just vehicles for immigration and cheap labour.
"Some of these providers are not involved in quality education. It's a front to get students through into fairly much indentured labour in New Zealand."
He said it had taken New Zealand years to recover from the collapse of the Modern Age English language school in 2003, which sent a message to China that New Zealand's entire international education market was not to be trusted.
"India has that same risk about it for us. If we don't get on top of these issues, the Indian public as well as governments in India and New Zealand will lose confidence and we'll lose our market."
Labour tertiary education spokesman David Cunliffe said there was a system failure within the PTE sector.
"The quality appears to be highly variable and the rate of documented rorting is climbing very quickly. I've had very reputable PTE managers and owners coming to me saying they're very worried because their brand is being diminished by fly-by-night operators."
Joyce said New Zealand had run into issues with parts of the Indian market, as many other countries had done.
"I think some people have abused it. We've tightened it up a lot recently in response."
The Government had brought back external English tests, introduced a code of practice which made providers liable for their agents' actions and announced a new English test for immigrants and a higher points threshold for skilled migrants.
The changes have already had an effect. Immigration New Zealand's student visa newsletter said applications from India had almost halved from 4524 in July and August last year to 2382 in the same period this year.
• Today: Visa and school fraud
• Tomorrow: Student exploitation
• Wednesday: Effect on immigration