The education sector is expecting up to 2500 fewer foreign students this year after another fall in enrolments from its single most important market, China.
Immigration New Zealand figures show 500 fewer Chinese students got new study visas in the last six months of 2018 than in the same period of 2017, a fall of 11 percent.
The decline followed a 20 percent drop in new study visas for Chinese students in the 12 months to June last year.
Immigration and education agent Jean Hu said changes to work and residency rules last year had made it harder to persuade Chinese parents to send their children to New Zealand.
"The parents, once we gave them advice about the country's immigration policy, then they get hesitation to send them to New Zealand."
Ms Hu said Chinese families chose other countries, such as the United Kingdom and the United States, which had similar immigration rules but more prestigious universities.
The chief executive of the government agency charged with supporting the international education sector, Education New Zealand (ENZ), Grant McPherson, said immigration changes were not solely to blame.
He said more Chinese students were choosing to study in China because education standards had improved and because of uncertainty about China's relations with countries including the United States and Britain.
"It's a real mix," he said.
Mr McPherson said ENZ was hoping to reverse the trend by promoting New Zealand to more parts of China.
"Historically everybody looks at the Beijing, Shanghai, Guangzhou, that eastern seaboard piece; they're the three major cities within China.
"But there's a number of others that are of equal opportunity so we've been looking at how we might be able to encourage students out of Chengdu, Wuhan, other cities around China to consider New Zealand."
Mr McPherson said enrolments from other countries such as India, Japan and Korea were holding steady and others were growing, such as the United States and Europe.
In addition, there were more enrolments in high-value courses in universities, he said.
Overall the total number of foreign students was expected to drop by 2000 or 2500 this year from last year's total of 125,000, but the value of international education to the economy would remain at about $5.1 billion for the year.
Mr McPherson said it appeared that private training establishments (PTEs) would be worst affected by the decline in foreign student enrolments.
Independent Tertiary Education New Zealand is the largest organisation for private institutions. Its chairperson Craig Musson said his sector was not alone.
"Everyone else is down as well, so I don't think it's only in the PTE market."
Mr Musson said enrolments from China and India had fallen in the private sector, but the introduction last year of tougher work permit rules had not had as big an impact as feared.
"The changes weren't as draconian as we were expecting, which is good.
"Time will tell and we'll be working with the immigration minister to look at how we can try and make sure there's no major effect over the next two or three years."