Tertiary education minister Steven Joyce says he is "comfortable" thousands of tertiary students will not get student loans to continue their studies next year.
Tougher performance requirements mean students who failed more than half their papers during 2009 and this year will not get a student loan until they make up the number of papers missed at their own expense.
Mr Joyce estimated this week the new measures might result in 9000 students now attending universities, polytechnics or private training providers missing out, although he said yesterday that total could be lower.
"Some will miss out, and I am comfortable with that. It is not good for people to be continually borrowing money and not succeeding ...
"We need to get past the point of feeling good because we are enrolling people in tertiary study."
The Government's intention was to support students who made the most of their educational opportunities, he said.
Mr Joyce said the figure of 9000 was based on student performance during 2007 and 2008.
Performance in 2009 had been better than in the previous two years, so it was likely fewer than 9000 students would miss out.
The performance requirements and other changes to the student loan eligibility were announced in the Government's Budget in May.
On Thursday, Otago Polytechnic chief executive Phil Ker criticised performance requirements being backdated, saying students who had performed poorly in 2009 and this year "for whatever reason" had no time to remedy that and would be shocked they would not get a loan next year.
He estimated 20% of Otago Polytechnic's roll - about 600 students - might not get funding next year.
Mr Joyce said he has told Studylink, the Government agency which administers student loans and allowances, to "take a reasonable, the generous interpretation" on the new performance requirements.
If a student had performed poorly in 2009 and had turned their performance around this year but still fell just below the new criteria, he would expect Studylink to give that person a loan.
Mr Joyce said he could not understand why Mr Ker was raising the issue of the new performance requirements now, saying they had been well publicised at sector group meetings and through Studylink since May.
