Telford Rural Polytechnic bosses, fearing an uncertain funding allocation for next year, believe they will get a two-year deal from the Tertiary Education Commission that will safeguard its future into the long term.
Talks with the funding agency have only just started, but Telford chief executive Jonathan Walmisley said early indications suggested its national funding would be cut, but Telford would get the chance to promote itself more strongly in the Otago-Southland catchment.
"We expect we will be smaller and have less delivery of courses nationally, but anticipate being strong locally."
The first drafts of an agreement are expected to be with Telford by the end of this month.
No details are known yet on how much money Telford might lose on a national front, but Mr Walmisley said he was feeling "relatively comfortable" about what the next two years held for the polytechnic.
"We're looking forward to a fair and positive outcome."
Last year, Telford's funding was cut by about 20% and the Government signalled the possible end of its foray into the national market, where it makes money offering correspondence courses.
