Changes to student visas are in the pipeline that would restrict overseas students working and living in New Zealand once they finished studying.
But the work right entitlements for those studying at bachelor level and above would be more generous.
The changes are in response to concerns about the quality of education and study being used as a back door to residence, said immigration minister Iain Lees-Galloway.
"Too many students are being sold a false dream in New Zealand that the current post-study work rights can put students on a fast track to residency here.
"This has led to a decline in the general skill level of migrants granted permanent residency and fraudulent and, frankly, unethical behaviour from some agents."
Those taking courses below bachelor level will be able to get a one year open work visa after they have finished, as long as the course is longer than two years.
"But if they want to continue on in New Zealand after that one year they'll have to apply for a new visa that's likely to be labour market-tested and that will mean they have to have a skill that is genuinely in demand in New Zealand", Mr Lees-Galloway said.
Those above bachelor level could work for up to three years with the endorsement of an employer.
"There have been too many cases where migrant workers have been subject to exploitation because they are dependent on a particular employer to stay in the country."
The rules will be relaxed for anyone studying at doctorate level to allow visas for immediate family, as long as the area studying is on the Long Term Skill Shortage list.
Mr Lees-Galloway said he had been working closely with the sector, some of whom had expressed alarm that cutting back on work rights could force some providers to close.
"Those providers who are providing a low quality education, who exist solely to provide a pathway to residency, they may not do so well. I think that's good for our education sector and it's good for New Zealand."
Labour also campaigned on changing the work rights while foreigners studied but more work needed to be done in that area.
Public consultation on the following changes will open on 5 June