The Government has suggested various changes to the post-study visa rules, including removing employer-sponsored post-study visas and introducing a one-year visa for people who have completed non-degree qualifications at level 7 or below.
That includes level 5 and 6 diplomas offered by the polytechnic in areas like engineering and construction, as well as graduate qualifications at level 7.
By contrast, a three-year post-study work visa has been proposed for degree qualifications at level 7 or above.
Students completing a qualification that is not a degree will also only be eligible if they spend at least two years studying in New Zealand.
Polytechnic communications director Mike Waddell said the changes could damage New Zealand's reputation in the global tertiary education market.
He understood there was a sector risk of about $40million to polytechnics and training institutes, and a risk of about $4.3 million to Otago Polytechnic in particular.
"It could have an impact on the whole sector,'' he said. "We are actually pretty disappointed.''
There appeared to be a "misalignment'' between the skills shortages the Government had identified and the fact it was not considering a three-year post-study visa for non-degree qualifications.
"What I would want to say is that it should be for non-degrees and degrees,'' he said.
The long-term skills shortage list, released in February, includes jobs in engineering, construction, finance, business and health and social services sectors, as well as the sciences, trades, and IT.
Overseas students who opted to take polytechnic graduate diplomas were often already well-qualified but wanted to upskill, and their potential value to the economy should be taken into account, Mr Waddell said.
Other proposed changes include requiring international students studying level 8 or 9 qualifications - which could include a bachelor's degree with honours, a master's degree or a PhD - to be studying in an area specified in the long-term skills shortage list for their partner to be eligible for an open work visa.
University of Otago international office director Jason Cushen said the university was "broadly supportive'' of the suggested changes.
However, he believed international students at level 8 and 9 at the university and their families would be "unfairly disadvantaged'' by the proposals if they were not on the long-term skills list.
"It would make New Zealand less desirable to international students with families, and likely impact on our ability to recruit from this cohort.''
