The figures also show Immigration rejected 49 percent of applications for private institutions and 40 percent of applications for polytechnics and institutes of technology last year.
The net result was a near doubling of study visa approvals for Indians wanting to study at universities (2235 approved), an 1100-student increase for polytechnics (to 4408 approved visas) and just 90 students more for the private sector (2184 approved visas).
Immigration New Zealand's national manager for education and tourism, Jeannie Melville, said the increase in declined applications was partly due to a jump in the overall number of applications, especially for polytechnics.
She said the increase was driven by changes to work visa rules for students announced at the end of 2018.
"We did see some really good increases in the number of genuine students, particularly in the regions, who were looking to fill skill shortages in those regions, but we also saw other students who were being sold a path to residence that might not be there," she said.
Melville said Immigration was still refusing applications because it suspected fraud in documents showing students had sufficient funds to support themselves, a problem that surfaced some years ago.
She said it had also seen cases of what it called "crowd-funding".
"We saw in some cases up to 60 different sources of the funds to finance a student's study in New Zealand. So for us that actually raises questions about whether there are other risk factors there that might lead to those funds not being genuinely available in New Zealand and those students potentially being exploited."
Immigration advisor Munish Sekhri said the increase in refusals was evident in the middle of last year, but appeared to be due to visa officers taking an overly tough attitude rather than any real increase in fraudulent applications.
He said students were being refused study visas based on the results of phone interviews with Immigration staff, when really they should have been approved.
"There is no fraud in this, it is just about the perception of the visa officers about the students had changed," he said.
"So I don't say that it was fraud that had increased, it was probably the way things were being handled in 2019, which by the way, has improved."
Sekhri said attitudes appeared to have changed, and fewer applications were being refused.
The chief executive of private tertiary institute Aspire2, Clare Bradley, said it noted an increase in visa refusals last year, but that had since eased.
"In the middle of last year we saw an inexplicable jump in visa decline rates, but it did seem to come right towards the end of the year and into the beginning of this year visa approval rates are much what they were a year ago," she said.
The chief executive of Otago Polytechnic's Auckland international campus, Gagan Sachdeva, said the increase in approvals for polytechnics would help offset any decline in Chinese enrolments due to the Covid-19 coronavirus.
But he said the main beneficiaries of the increase were polytechnics in the regions, rather than the main cities.
"As of November last year, Auckland saw a decline of visa rates by at least 13 percent so there was a decline here, whereas the regions saw a huge spike. So I think there will be some off-setting but who gains from it is what we need to see."
