The national polytechnic Te Pukenga is expecting to end its first year of existence with a deficit of $29 million.
The figure is nearly half the $53 million loss it was forecasting at the middle of the year, as reported by the Auditor-General, John Ryan, in his report on tertiary institution finances this week.
The institute told RNZ the improved forecast was due to fewer international students than expected abandoning their studies and leaving the country due to the pandemic.
It said it had forecast a deficit of $51 million next year, roughly half the figure expected at the middle of the year.
Collectively, the 16 subsidiary polytechnics and institutes of technology that make up Te Pukenga made a deficit in each of the past three years.
Meanwhile, the auditor-general's report revealed that the government gave the West Coast's Tai Poutini a further $5 million at the end of last year.
The government said Cabinet agreed to the funding in November last year to ensure it could meet its operating commitments for 2020 and continue to provide tertiary education on the West Coast.
It said the funding was approved by ministers in March this year.
The government had previously given Tai Poutini $33 million, most of it by forgiving a debt owed to the Tertiary Education Commission for claiming more funding than it should have done.