What lies beyond the millions of dollars of fees we're collecting from international students

What lies beyond the millions of dollars of fees we're collecting from international students

By Jenée Tibshraeny

Meet Sandeep Dahiya.

He’s a 21-year-old international student from India, working towards completing a National Diploma in Hospitality Level 5.

He’s forked out $29,850 for the two-year course at a tertiary education provider in central Auckland.

The diploma, which requires students to have a base level of English language skills, promises to prepare graduates for “supervisory or management roles in hotels, restaurants, bars and catering”.

Yet a year and half into the course, Dahiya hasn’t even managed to get a job as a dish-hand at a café.

The course he’s doing doesn’t include an internship programme, and while he praises his tutors for being helpful, they haven’t been able to help him secure some industry experience other than volunteering at the institute’s canteen.

“Getting a hospitality job is impossible without a reference from someone in the field,” he says.

Instead, Dahiya has managed to secure a part time job for himself through a contact at Countdown.

Yet his time in New Zealand has been far from smooth sailing. He was unemployed for five months when he first arrived, and has been ripped off by a commercial cleaning employer, who he claims only paid him $600 for working around 30 hours a week for two months.

Dahiya says he’ll be in the running for permanent residency if he manages to get a job in hospitality once he qualifies. Otherwise he may be able to get a two-year working visa if he stays on at Countdown.

Language a barrier

Dahiya’s story isn’t unique.

For one, he says he has around 22 classmates from the likes of India, the Philippines and China, who generally haven’t been able to secure jobs in hospitality.

The New Zealand managing director of Hays recruitment, Jason Walker, says: “It’s difficult at entry level in New Zealand whether you have a degree or not, and I think we’re going to see that for another 12 to 18 months until that big dinosaur of a beast called Auckland starts really moving forward and unemployment really starts coming down quite severely.”

Walker says Hays’ research indicates New Zealand employers aren’t necessarily prioritising Kiwis over foreigners, with 76% saying they’d be willing to sponsor workers from overseas if they had the experience.

Yet good language skills, local business knowledge and an understanding of New Zealand culture are key.

“We find it very difficult to understand a number of [foreign] individuals who are applying for roles, and it does get in the way.”

Education providers chasing profits over performance

This begs the question, should education institutions, charging international students a premium to slap a New Zealand qualification of some sort on their CVs, take more responsibility to ensure a New Zealand qualification mean you’re fit for employment in New Zealand?

Walker maintains institutions should be rated and rewarded according to what they produce - what their graduates achieve - rather than how they grow their enrolments.

“If you look at how all our tertiary education institutions and universities are measured, it’s not on their output at all, it’s on ‘how many students can I get in, how much money can they pay so we can pay the bills and generate a profit’.”

Given tertiary education providers are relying so heavily on international fees, Walker admits: “Are we really going to test international students’ skills when they’ve got this huge amount of money they’re going to pay for a three or four-year education?”

The annual reports of the nation’s polytechs show foreign students paid a record $150 million in fees last year, according to a Radio New Zealand report. This contributed towards all but two of New Zealand’s polytechs making profits, as international enrolments grew 22% to nearly 10,758 full-time students.

Higher qualified grads on the decline, lower qualified grads on the incline

So is New Zealand being short-sighted, simply clipping the ticket from cashed up Asians keen to differentiate themselves from those in their homelands with an international qualification, or using education as a pathway to securing citizenship in New Zealand? Is our economy getting the most from international students like Dahiya once they graduate?

A series of Treasury reports prepared for the Government, and released under the Official Information Act, indicates not.

One of the reports explains a “significant proportion” of the 21,000 migrants given residency under the Skilled Migrant Category (SMC) in 2014/15, now work in low wage occupations, with recent trends showing a “relative decline” in the skill levels of these migrants. Almost 40% of SMC migrants are former international students.

This chart, published in a different Treasury report, says it all:

The number of people granted residency through the SMC, who have previously studied in New Zealand and hold a diploma, has more than doubled since 2008.

Meanwhile, the number of New Zealand educated SMC migrants with bachelor degrees has dropped by around two thirds in this time. And the number of migrants with doctorates, masters, honours, and graduate diplomas has trended slightly upward but remains well below the number of those with lower level qualifications.

Treasury “concerned”

Making reference to the graph, Treasury report writer Julie Fry says: “The Ministry of Business, Innovation and Employment has noted trends towards increasing numbers and proportions of SMC residence approvals for applicants with lower levels of skills than were anticipated when the policy was designed.”

MBIE data for 2014/15 also shows the top five categories of "expertise" migrants who obtain visas through "essential skills" categories have are, cheffing, dairy cattle farming, cafe or restaurant managing and carpentry.  

Another Treasury report adds, “There is a concern that recently there has been a relative decline in the skill level of our labour migration… This trend is in part driven by migrants that are already in New Zealand on a temporary visa at the time of their application for a permanent visa. A high proportion of these temporary migrants… are former international students who have studied for sub-degree qualifications.”

Fry says: “From a purely economic point of view, it does not make sense to provide permanent residence to people working in low-earning retail management jobs. If these are agreed to be general areas of labour shortage, they are more appropriately dealt with through temporary visas, and through training New Zealanders.”

“Countries have increasingly moved to offering residence to former international students because their qualifications are known, and their knowledge of local economic, social and political context facilitates faster integration. However, former students have relatively little relevant work experience and are more likely to be unemployed or out of the labour force than other skilled migrants.

“…Former students who have graduate or higher-level qualifications are less likely to remain in New Zealand after receiving residence.

“While lower retention rates for more highly-qualified students reflect their greater choice of opportunities elsewhere, more could be done to reach out to people after graduation. Anecdotally, some international recipients of New Zealand PhD scholarships have expressed surprise that they were not encouraged to remain in New Zealand to work after graduation.

“Given these factors, it makes sense to raise the level of qualifications that enable former students to transition to residence.”

See this story for more on Fry’s solutions to improving the immigration system, as outlined in a book she’s co-authored, ‘Going Places: Migration, Economics and the Future of New Zealand’.

International grads willing to do low skilled jobs to get citizenship

Walker says the result of international graduates holding sub-standard qualifications, or having the good qualifications but not the experience to get the roles they’re qualified for is:

“Qualified international students are taking over some of those semi to low skilled roles, which is cutting out opportunities for unemployed youth, who are coming from more difficult social circumstances, who don’t have the education to get those roles.

“Not only are they [migrants] taking those unskilled jobs, which are probably below them in terms of their level of education, but they’re taking an opportunity from someone else.”

Another international student from India, who has asked not to be named, says him and his friends are happy to work in a menial jobs they’re over-qualified for, in order to get New Zealand residency.

Equipped with a Bachelor of Commerce from India, the 23-year-old’s father and brother in India have taken out loans to pay for the $15,000 one-year Business Diploma he’s completing at the Linguis Institute in Auckland.

He believes he’s being overcharged for the course, which is sub-par to the university degree he did in India, but says it’s all worth going down this path to secure residency and enjoy a higher quality of life in New Zealand.

He hopes to eventually get a job in banking or insurance. 

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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So what's the takeaway from this then?

We like international students paying our exorbitant uni fees, but don't like them taking our jobs once they're finished? Even if they are taking a job below what they qualified as? Pretty sure I hear a similar rhetoric before - get a job, any job, get experience and then move up from there. You still need to earn a wage to pay the rent, right?

And are we also surprised that the ones who are smarter, get a better qualification, see NZ isn't the best place for them and move on elsewhere?

What's the Takeaway ...... well its bloody unfair to rip these people off to the extent they are being sold a dud.

They are misled by the advertising hype into believing believe they will gain Permanent Residence or even citizenship and find jobs in New Zealand ( simply because they will have a New Zealand qualification!!!!!) or get into America or Canada or Australia and end up in the land of milk and honey .

Some even think once they have PR they can bring their 12 siblings , 2 parents and 4 grandparents, in-laws, 15 cousins and their 60 siblings , parents and In-laws to a place where " education is free and medical assistance is free " and jobs are "plentiful"

Instead they are exploited by their fellow countrymen , and in desperation they work for a pittance just to feed themselves

The whole thing stinks to its rotten core

it goes all the way to the top, the whole high immigration thing is a scam, follow the money
ask yourselves why would the political parties pick some of these people and what lobbying are they doing in wellington to keep the doors open and a free for all to buy property


Gee Whizz , $29,000 for a Hospitality Diploma , a years after-tax wages for a cleaner in Auckland and 3 years wages for an office worker in India .

What is very disconcerting are the "pop-up" colleges and schools all over downtown Auckland , who provide questionable courses at exorbitant costs.

It appears totally unregulated .

Stephen Joyce is economically inept. Feet of sand etc. His 'education export' is a national disaster.
It would be funny if so many people were not being hurt. But people are being hurt. It ain't funny.


"He believes he’s being overcharged for the course, which is sub-par to the university degree he did in India, but says it’s all worth going down this path to secure residency and enjoy a higher quality of life in New Zealand."

It should be noted that a higher quality of life means in many countries access to clean running water and a connection to the power grid. Hence the situation will not self-regulate once those students realize that they will never get a proper job in NZ.

Secondly, given that people are happy with shoddy education because it is all about immigration, those "tertiary education institutions" should probably double the fees as the customers will keep coming.

I am starting to feel ashamed for NZ. Are we now reduced to flogging land, houses and visas in the 3rd world? Can't we do better than that? What a disgrace.

So on the mark. Such a disgrace.

Some good points mentioned here - mainly that the university/tertiary systems are a sham, one of their main intentions is to get high student numbers through the door and profits in pocket with little reflection on the quality (or relevance to the job market) of the course being offered.

Another important question - how do we regulate this area? I have done some travelling overseas and note the example (among others) of the United Arab Emirates. There are dozens of "universities" there, which are actually just privately funded tertiary outfits, offering typical theoretically-based university diplomas and degrees. The overarching feature was that students passed their courses and received their qualifications because they had "paid" for the course, in many cases despite how they had performed. This way of operating seems to be unfolding in New Zealand too, but many of those who come to NZ are doing so in the hope they'll receive residency and be able to stay in here. NZ has a glowing reputation in the subcontinent (and in fact throughout most of the world) and for many, the standard of living available in NZ and our relatively safe/stable political environment and distance from terrorism is a much better alternative than residing in the places they have come from. Education appears to be just another avenue for people to enter NZ if they have the funds to do so.

Finally, the article refers to factors such as an individual's command of the English language and their ability to live/embrace NZ values as key to determining their employment prospects. I wonder to what extent immigrants to NZ embrace the values and the way of life here? In my experience, many international students tend to keep to themselves and interact in their own language, and also have the ability now to continue living a lifestyle closer to the ones they came from (ie, ethnic stores with their culturally-specific food, ethnic communities and religious affiliations) without the necessity to interact with the average Kiwi. It seems that ethnic/cultural divisions are still strong and I believe that this, in large part, is because people are continuing to identify and embrace a certain culture strongly. Of course a celebration of cultures and backgrounds ought to be appreciated; but an insistence of adhering to cultural values at odds with those of New Zealand can also hold people back and intensify divisions. I think if more international students embraced NZ values, they would reach places that many currently are not.

Insightful comment.

Purely economically spending 50K on a bogus degree and maybe 2 or 3 years of lifetime is a good deal relative to the 1 million NZD required for "investors" buying themselves a visa.

Also note that many of those "tertiary education institutions" only have a Kiwi frontperson but are actually run by people from the same places the students come from. A lot of the money does not even stay in NZ, it is remitted back "home".

As to multiculturalism having divided NZ into a lot of parallel societies with little interaction between them, I recommend to have a look at any AKL school yards during breaks. You can clearly see the separation of student groups by ethnicity.

Yet, many in NZ are not ready to deal with the realities of 2016. They pretend all is somehow good, at least as long as the ABs win and the house market goes from irrational to insane.

There is rising revulsion for what's going on Peter. The things we value - home and family, a fair go for all, honesty would appear to be of little interest to this government. This below is typical stuff, just the tip of the iceberg no doubt but an almost daily litany of shame in our MSM.
Member of the Authority Rachel Larmer said in her decision published today that Singh was a vulnerable employee, being aged 19 and in New Zealand on a work visa.

Larmer said Singh was reluctant to complain about his poor conditions of work because his employers said they would support him to get a permanent visa.

The companies had no written employment agreements or records of hours worked for Singh, but evidence showed his hourly rate was $4 an hour, with some hours of the week going unpaid.

If there is revulsion how come Jonkey is so popular?

Based on my experience the current system is less than ideal - the easiest way for int'l students to get residency is for their degree to be on the "skills shortage" list. If your degree/major is on the list, you are almost guaranteed residency, no matter how poor you did at uni. I know of people limping through after failing multiple papers multiple times, which makes them totally unemployable, gain residency nonetheless. They just end up being, I guess, real estate agents or mortgage peddlers. On the other hand, some very good students go through a very hard process to residency, even after they land very good jobs, simply because their degree/major is not on the List.

Or they pay someone to write there papers for them; cheap price to pay for residency. The whole international study thing is a sham to generate revenues through the visa system and for the universities.

Short term gain as many of them will get residency and then sponsor other family members into the country many of them older who havn't contributed to the system in which they will inevitably use.

This is part of the immigration loophole that has a lot to answer for.

Being able to observe some of the behaviour of some mainstream NZ tertiary institutions there is a lot going on that we need to be concerned about:-
- Vigorous and misleading marketing to overseas students of courses that will be of little professional value let alone obtain a worthwhile jobs and NZ residency.
- A total focus on boosting overseas student numbers while overlooking what is of value to NZ students.
- Pressure on academics from both the students and the institutional hierarchy to to pass substandard overseas students. Frequently while they may get pushed through the early stages of the qualification, frequently they fail in the latter years. This is despicable as it amounts to milking them for their fees when their eventual failure is practically inevitable.
- admitting students who's grasp of English is abysmal. Same result as above.
- Structuring courses that are designed to attract overseas students but have little other merit.

Once again some Australian institutions seem to have priorities right. Local students have first priority at admission. Foreign students fill the gaps left over.

I've seen them do it to New Zealand students as well Chris M. And we are talking about Government owned Polytech in a Nursing Course. Keeping failing students on, pusshing them on through, just to keep bums on seats, the funding flowing, and the tutors in jobs.
In a just world the cops would be busting down the door and leading these 'educators' away in handcuffs.

Ha! Don't get me started on uni education! A pet frustration along with housing!
I think some faculties are ok but some are a farce.
My son is doing engineering and they still seem to genuinely have high standards.

Well said Chris M, and KH yup they definitely do it to kiwis too. Polytechs are known for this. The Aussie uni I went to was very strict in comparison. Chalk and cheese. The difference is one milked you and made you feel good vs the other couldn't care, and wanted you to leave as spaces were limited if you weren't performing.

The tertiary education system is the biggest money making con and the govt hasn't got a clue what is really going on!

The students know the school fees up front so I don't buy the "ripped off financially" argument. No one put a gun to their head and said "you must travel to NZ & pay these fees" that's the students choice

Come on Yvil,
that's not how we want to be seen to operate - unless you want standards and qualifications that aren't valued or respected anywhere in the world

There should be no expectation of permanent residence from any qualification.
This is in fact the likely reason why our immigration system is such a mess and causing those with backing from their family at home to buy property here.
Just another rort.

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