The international education sector says any restriction to the ability of foreign students to work while studying would be the death blow for some institutions, as the immigration minister signals changes are in the wind.
Earlier this year Iain Lees-Galloway said he was "holding fire" on any changes to in-study work rights, as student numbers were falling due to changes made by the previous government.
Now he says work will begin on potential change, which the sector says is extremely disappointing.
Mr Lees-Galloway has already unveiled a number of changes to the work rules for students once they've finished, in response to concerns about exploitation and the visa being used as a pathway to residency.
Once that was finalised the focus will turn to work rights while studying, he said.
"I'm going into that with a very, very open mind about where we go with those."
The objective was to ensure a high quality international education sector within a system that had integrity, Mr Lees-Galloway said.
Former Immigration Minister and National's spokesperson Michael Woodhouse said the ability of students to work while studying was a major selling point for New Zealand, as it was for other countries in the market.
The sector was at a point where its future was already at risk, he said.
"Officials have told the minister the changes made by the previous government have had the effect of reducing demand for international education by over 10,000, that was at the lower quality end of the spectrum.
"The risk that we now have is that high quality courses could well be affected by changes that are really not necessary."
Chief executive of New Zealand's largest tertiary provider, Aspire2, Clare Bradley said it was extremely disappointing to hear change may be on the way.
"I just think it will create further uncertainty in the global market for New Zealand, it's really going to undermine New Zealand's attractiveness as a study destination."
Independent Tertiary Education New Zealand chairperson Craig Musson said any further changes could put institutions out of business.
With recruitment already underway for next year, he agreed any uncertainty was a major risk.
"On top of the post-study work rights and whatever the result is with that, it's just going to decline the market even further.
"Bottom line is that if student numbers decline, providers are going to go out of business and staff will lose their jobs."
Labour campaigned on limiting the ability to work while studying to international students studying at bachelor-level or higher, and anyone below that would have to seek approval.
Mr Lees-Galloway initially said changes would be made, but then backtracked saying he did not want to predetermine any future decisions.
He will announce the final changes to post study work rights at a big international education conference in August, after what he described as a "robust" consultation with the sector.
Once that is done, attention will turn to in-study work rights.