Vijay Singh, 26, from Punjab, said he enrolled at a Bay of Plenty institution because his agent told him that doing so would lead to "automatic residency".
"I was told New Zealand wanted migrants in smaller cities, so studying there will give automatic permanent residency," said Mr Singh, who did not want to name the training establishment.
"I borrowed $20,000 to pay for everything because they said I will get residency and I can sponsor my whole family to come here.
"I can also work in fruit picking to pay back the money I owed."
Mr Singh arrived in February but moved to Auckland last month and is now looking for alternative pathways to permanent residence.
Munish Sekhri, spokesman for the India-based group Licensed Immigration Advisers of New Zealand (Lianz), said up to eight in 10 Indian students in New Zealand might have been misled by agents.
"The problem is they are too scared to highlight their problems as they don't want to be in the eyes of Immigration," said Mr Sekhri, a licensed immigration adviser.
His group, representing Indian licensed immigration advisers, wants a licensing regime for all overseas education agents similar to that required for immigration advisers.
Sizzling Career Solutions, a New Delhi-based student recruitment agency, claimed in an email advertisement: "Candidates studying in Hamilton will get an edge of 30 points while filing for permanent residency."
Managing director Satpal Gulia said it was recruiting students for the Waikato Institute of Technology (Wintec).
"The mail actually meant to covey that students will get bonus points eventually when they file for PR [permanent residence] because they would have stayed in a region outside Auckland," he said.
However, Wintec chief executive Mark Flowers said it terminated the agent's agreement because of the false claim after being alerted by Immigration New Zealand last Thursday.
Mr Flowers said the agency had sent five students to Wintec in the past three years.
"This particular incident is unfortunate and not typical of agent behaviour," he said.
Immigration New Zealand spokesman Marc Piercey said changes introduced last month gave 30 bonus points to residency applicants with job offers outside Auckland, but did not apply to students.
"This change has no effect on where students can study in New Zealand; it only applies to people applying for residence," Mr Piercey said.
"Immigration New Zealand looks into any claims of false marketing brought to our attention and takes appropriate action where warranted."
June Ranson, chairwoman of the New Zealand Association for Migration and Investment, said unregulated overseas agents were tarnishing New Zealand's image and reputation.
"All overseas agents should need to be licensed and have to abide by a code of conduct like that of New Zealand agents," Ms Ranson said.
An Education New Zealand spokeswoman said students who believed they had been misled should first complain to their education provider or school.
They could complain to the International Education Appeal Authority if they were not satisfied with the outcome.
"There is a wide range of regulation in place to ensure that the rights of international students are protected and supported," the spokeswoman said.
Tertiary Education, Skills and Employment Minister Steven Joyce said the increase in enrolments brought an additional $91 million in tuition fees for education providers, hitting a record $804 million in the January-August period.
International education is New Zealand's fifth-largest export sector.
INTERNATIONAL STUDENTS IN THE REGIONS
• 104,418 - Total in New Zealand in the first eight months of this year.
• 11,760 - Increase over the same period last year.
• 15-18 per cent - Growth in Auckland, Waikato, Bay of Plenty, and Canterbury.
• 10-14 per cent - Growth in Northland, Taranaki and Nelson.
• 11 per cent - Increase in first-time Indian student enrolments
• 57 per cent - Increase in returning Indian students
(Source: Education New Zealand)
