Some students may be turned away from their second year of studies in order to keep university numbers down.
Canterbury University's vice-chancellor, Rod Carr, has raised the possibility of students who have gained poor marks not being able to continue with their courses.
Dr Carr says the university has had a 7.5% increase in first-year enrolments, significantly higher than what was projected and funded. The recession is thought to be responsible for university rolls increasing.
Dr Carr says the university has a responsibility not to spread its resources too thinly, thereby degrading the quality of education students expect.