Up to 70 percent of private training colleges could collapse if Labour's new immigration policy is implemented, an organisation representing the industry says.
The Labour Party's policy targets international students on low-level courses, in a bid to cut down migration by up to 30,000 people a year.
Andrew Little Photo: RNZ / Brad White
Statistics from April showed nearly 130,000 migrants arrived in the past year - an annual record - while more than 52,000 people arrived on student visas.
Labour said the government had failed to plan for the record influx and therefore couldn't offer new migrants the life they were expecting.
Party leader Andrew Little said low-value courses had become a "back door to immigration".
He wanted to limit the ability of those on student visas to work unless they were studying at bachelor level or higher.
Independent Tertiary Education New Zealand, which represents the industry, predicts up to 70 percent of the sector's business could collapse.
Chairperson Christine Clark said targeting private training establishments (PTEs) would not solve the problem.
She said Mr Little had confused low level with low quality, and the policy sent a message that people who studied at PTEs were low-level people.
"By saying low level, he's also targeting the providers who are training the chefs and training the baristas and the technicians and the horticultural people and the farmers and the caregivers.
"New Zealand actually needs those people."
Dave Guerin from Ed Insider, a company which gives advice to tertiary education groups, said polytechnics would also be in trouble.
"Polytechnics are heavily reliant on the Indian and Chinese market. In some places they make up 80 to 90 percent of their international students.
"I've just gone through most of the polytechnic sector's annual reports. Most of them are seeing growth in international students and declines in domestic students, so if they see a decline in international student then they'll be in the red financially."
Horticulture New Zealand chief executive Mike Chapman said about 20 percent of its workers were on student visas.
Mr Chapman liked Labour's idea of a visa system which would help people get more jobs in the regions, but said the overall policy did not promote growth.
"The whole policy needs to recognise that we do need skilled workers in this country, be they Kiwis or [through] immigration. We need that balance.
"Any policy that pushes down and stops growth is not assisting the industry going forward."