Some universities will suffer more than others from a 1 percent drop in domestic enrolments across the sector, Universities New Zealand director Chris Whelan says.
Six of the country's eight universities have fewer new domestic students than last year, and the University of Otago has been worst hit, with a 350-student drop.
The fall nationwide equated to 960 full-time students, worth nearly $16 million a year in fees and government subsidies, Mr Whelan said.
However, a rise in the number of international students would balance that loss for some institutions.
"It's going to hurt some universities more than others but a drop of 960 domestic students across the sector, at the same time international students have increased by about 605," he said.
"So across the entire sector it sort of balances out but not for all universities equally, and there are some universities that are going to be struggling more and having to make some difficult decisions."
Otago said at least half of its decline was due to the higher number of students leaving school without the entrance standard this year but Mr Whelan said a general decline in the number of school leavers had a bigger impact.