The tertiary institutions which train and educate tens of thousands of Kiwis every year are in deepening trouble.
There are 16 polytechnics and institutes of technology around the country. Many of them are already struggling and it's expected the majority will be losing money in four years.
Last year, the industry lost more than 5000 students, and the decline and rising costs are the main problems for polytechs.
That sparked a crisis meeting today as polytech leaders and sector experts urgently try to stem the tide.
"It's getting harder, there's no question around that. As the economy swings up people are much more able to go and get jobs without getting a qualification," said Chris Collins, Eastern Institute of Technology chief executive.
Business New Zealand supports getting students on the job more quickly.
"So, very short block courses that are based around skills rather than overall, long, three-year qualifications," said Kirk Hope of Business NZ.
The union blames a long-standing competitive funding model, and is welcoming a return next year to enrollment based funding.
Education Minister Chris Hipkins says vocational education is not always seen as as desirable as a university degree.
"But actually there are more jobs available in the vocational, educational and training space than we can provide people for," he said.
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