"The hostels would increase our ability to attract additional international students which means more resources for our students," said Rangitoto College principal David Hodge. "It also increases our ability to attract students from more diverse markets."
A report to the ministry last year seeking approval and talking through the risks, said building the hostels would be in line with a government push on international students. The market is predicted to double in size to $5 billion in the next 10 years.
The schools expected to build the hostels with the help of private partners and then lease the buildings back.
They hoped to get some kind of insurance from the ministry in case of a decline in the student market - due to a catastrophic event or adverse policy, for example.
The hostels would be run by the schools, with teaching staff living on site.
Fees would be in line with what homestays charge, around $250 to $300 a week.
International students at Rangitoto thought the idea had some merit. They said in their home countries - China, Russia and Argentina - hostels were common.
"Dormitories are quite good because you're with lots of friends. It would be good for students who don't speak a lot of English, so they could stay with friends at the start," said Erin Ye, 17, from China.
Emilia Di Passuaie, 16, from Argentina, said she loved her homestay family and believed staying locally improved the experience, but it wasn't for everyone.
The New Zealand Principals' Federation supported the move.
Past-president Phil Harding said the students added no cost to the Government, as any extra teachers needed had to be paid for by the school.
"The hostels will fund themselves, the schools will rake off the fee, they can't miss."
Post-Primary Teachers Association head Angela Roberts said it was telling that schools felt they had to take such measures to prop up their income.
"People make assumptions that high-decile schools have enough cash. It is a significant distraction from the core business of teaching and learning to take on such a project," she said.
The ministry said it had advised the schools they needed to each develop comprehensive business plans for it to consider.
"Investing in boarding hostels can involve significant investment," it said.
"Our role is to safeguard taxpayer money by ensuring that if schools do invest in boarding hostels their financial position is robust and the hostels do not impact on the schools' ability to operate."
International students
• Rangitoto College, Macleans College and Takapuna Grammar want to build 80-150 bed hostels for international students.
• International students make up around 10 per cent of the schools' roll and provide up to 40 per cent of the schools' revenue.
• International student market brought in $100 million last year in fees alone.
• An extra $100m was charged in accommodation fees for homestays.
• Government also gets added cash from a $500 levy per student.
• Industry expected to double in size to $5 billion in the next 10 years.
• Students are from countries including China, South Korea, Japan, Indonesia, Germany and Brazil.
