Theology and hairdressing are the first casualties of government cuts to subjects where it believes there are too many tertiary students.
This year the Tertiary Education Commission (TEC) is subsidising 107 fewer theology students and 124 fewer hairdressers in the private education sector - saving $1.8 million.
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The reduction was applied by removing 5 percent of education companies' funding for theology and hairdressing students, or allowing them to transfer 10 percent of that funding to other subject areas.
However, industry leaders say some organisations lost all their funding. The Tertiary Education Commission's figures show the net effect is a 12 percent cut for theology in the private sector and 14 percent for hairdressing.
Education leaders say the reduction is a first; the Tertiary Education Commission usually negotiates funding changes with individual institutions rather than making an across-the-board cut to particular subjects.
However, public institutions like polytechnics and wananga were not affected, and that has angered the private sector. The Tertiary Education Union is challenging the Tertiary Education Commission's ability to make such decisions at all.
Michael Hanson, chairperson of the Christian Theological Ministry Education Society, which represents theology teachers, said the cut hurt and some providers have even gone out of business.
"The impact has been quite significant. I know here I work at Laidlaw College, we have had to do quite a number of changes in regards to our staffing here.
"Talking more broadly around the sector, I know that some of the smaller providers, particularly, have had all of their funding removed, so, yeah, it's had quite a major effect on the entire sector."
Mr Hanson said theology educators did not agree they were teaching too many students. Not all go onto work as ministers or pastors, with many working instead in counselling or teaching roles.
Independent Tertiary Education New Zealand (ITENZ) represents more than 300 private providers.
Its chairperson, Christine Clark, said the cut was not fair because it had been applied only to the private sector.
"Originally we were told it was going to involve the polytechnics as well, because there were just too many people training in those areas," she said.
"We accept that, but when they've only affected the private providers and haven't carried it through to the polytechnics, you have to actually ask why. If there's too many people, there's too many people."
But the Tertiary Education Commission's Gus Gilmore said polytechnics had already reduced their hairdressing student numbers, and do not teach theology.
He said the cuts were made after considering Census figures. However, he was unable to say how big a mismatch the commission identified between the number of hairdressing and theology students and the demand for their skills.
Mr Gilmore said the commission did not have any particular subjects in its sights at the moment, though further cuts were possible.
President of the Tertiary Education Union, Sandra Grey, said the cuts were a new approach from the commission and she warned that they needed to be carefully thought out.
"My concern is that we're seeing very knee-jerk reactions to short-term supply and demand labour force issues," she said.
"There's no evidence at the moment that we have a government that has an active labour market policy that's got an idea of long-term planning."
Ms Grey said the government had to be careful its cuts did not lead to shortages in the future.
And ITENZ chairperson Christine Clark said the commission should to give more notice of such cuts because institutions need time to rearrange courses.