Secondary school principals are accusing the Government of double-standards over a policy that trimmed $7 million from their budgets last year.
The Government is reducing schools' operations grants every three months if students have left, and redirects the money to tertiary institutions where there is a more lenient funding policy.
Principals have been unhappy with the policy since it took effect in 2011 and started channelling funding to the Youth Guarantee - a policy that provides free tertiary education for teenagers.
But they have now found out from Radio New Zealand that, while their funding is cut at three points in the year, tertiary institutions only get slashed if their Youth Guarantee student leaves before attending at least 10% of his or her course.
The Secondary Principals' Association says that is a double standard.
They say schools are under-funded and cannot afford to lose the money.