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In recent months Immigration New Zealand (INZ) has deported or threatened to deport about 150 adult students because documentation by their India-based educational agents was false. The major issues were stating students had the required $NZ15,000 in the bank to cover living expenses when they did not, and exaggerating educational qualifications and English language ability.
SIT chief executive Penny Simmonds said while no SIT students had been deported and the agents it used were not under suspicion, SIT was suffering consequences nonetheless.
''It is really annoying and frustrating for us, but we understand why INZ has clamped down hard. Now what we are waiting for is for INZ to be a bit more targeted in their clamping down.''
Eventually there would be a ''recalibration'', and Indian students would return, but in the meantime some were looking elsewhere for tertiary qualifications, she said.
Last month Ms Simmonds travelled to Sri Lanka, India and Vietnam to meet agents and host agent-appreciation functions.
''Good'' agents in India were well aware of the fraud and the tough INZ response, she said.
''This is terrible publicity for New Zealand. We met agents who said: 'Look, it's all got so hard we're sending our people to Canada and we're not even trying New Zealand now'.''
She said she understood why INZ had to be tough. India was a country of 1.6billion people and there were ''probably hundreds of thousands of agents'' who operated without an overarching regulatory authority to monitor their actions.
Agents suspected of fraud simply closed their businesses and started up again under a different name.
SIT had been ''rigorous'' in monitoring the agents it used and checking students' documentation before accepting enrolments, she said.
In 2007 there were only about 70 equivalent full-time international students (EFTS), Ms Simmonds said. This year there were 1050 EFTS from more than 30 countries, including 400 from India.
A 2013 report calculated the value to SIT and the Southland economy of the 700 international EFTS that year at $19.9million.
Ms Simmonds said it was reasonable to estimate their economic impact at more than $26million this year.
If SIT was able to fill international places with students from other countries, the reduction in Indian student numbers would not affect staffing levels, she said.
''Positive'' emerging markets in Vietnam, Indonesia and Sri Lanka were being targeted.
''We're aiming for the same [overall] numbers next year.''
Ms Simmonds said because SIT had students from many countries, it was better off than many training providers.