A blow-out in the cost of treating foreign PhD students like locals has prompted a rethink of the long-standing policy and a cap on spending next year.

Since 2005 foreign doctoral students have paid the same tuition fees as local students (about $10,000 a year) with the government providing a tuition subsidy (starting at about $10,000 for the cheapest programmes) as if they were domestic students.

The policy pushed international PhD student enrolments nearly as high as domestic for most of the past decade but last year the cost of the scheme jumped by nearly a quarter to $69 million.

In response, this year's government Budget capped next year's funding at 2024's figure of $56m though the Education Ministry said it would be a "soft cap" used to calculate each university's funding rather than a benchmark or enrolment target.

Education Minister Penny Simmonds told RNZ the ministry was also reviewing the arrangement.

"The number of international PhD learners has increased quickly, and the cost of the current settings has grown by more than 20 percent a year over the past two years," she said in a statement.

"Our priority is to ensure New Zealand remains attractive to top international research talent, while maintaining opportunities for New Zealanders, and making sure that research is focused on our four national science, innovation, and technology pillars."

Ministry figures showed foreign PhD students accounted for about 48 percent of all PhD enrolments pre-Covid, dropping to a low of 43 percent in 2022 with 4310 enrolments before bouncing back to a high of 5265 or 49 percent of PhD enrolments last year.

During that time the cost of the scheme dropped from $55m in 2019 to a low of just over $43m in 2022 before rising to $56m in 2024 and about $69m last year.

Association of Scientists co-president Troy Baisden said the policy created a bigger population of research students which in turn increased the amount of research universities produced.

"That's been something that's really uplifted the reputation of our universities over the last two decades," he said.

But Professor Baisden said it seemed to have become successive governments' sole policy and other aspects of PhD study and early career research were neglected.

In particular, stipends for PhD students had not kept up with inflation and there was not enough funding for post-doctoral positions once they finished.

Baisden said those factors made it it increasingly difficult to persuade New Zealanders to embark on a PhD.

"They take a big hit to the money they would make for at least three years... and then have a very uncertain prospect of getting jobs out the end of their PhDs so there is a real problem there that has been building for many years," he said.

"The cap is a plaster on an issue that isn't fixed."

Baisden said reducing the number of foreign PhD students could incentivise people to create better conditions for New Zealand students.

Universities New Zealand chair Neil Quigley said officials were talking to universities but it was not yet clear what might change or when.

He said the sector could probably cope with a cut to its income from foreign PhD students because domestic enrolments were at all-time highs.

"We are in a situation where there's enrolment growth for domestic students across the country," he said.

"So probably at the moment we're in a period where the income from these students is not as big a concern as it might be in other situations."

However, he said the policy had been valuable for New Zealand's research effort.

Tertiary Education Union tiriti president Ti Lamusse said the union's members were worried about the policy's future.

"I just spoke to a member at Massey who all his PhD students are international students so they're at the core of advancing the most interesting and important research," he said.

Lamusse said any increase to international PhD students' fees would increase the cost of research because universities often covered students' fees from grants for specific projects.

"If you're going for a grant and that grant includes paying for a PhD student's scholarship it's a heck of a lot more expensive if you're paying for the international fees," he said.

Where they come from, what they're studying

Education Ministry figures show there were 5390 domestic doctoral students last year, about 300 fewer than in recent years, and 5265 international PhD students, 80 percent of them from Asia.

China provided more PhD students than any other country with 1970 last year followed by India (350) and Sri Lanka (310).

Just over 60 percent of domestic PhD students (3305) and 55 percent of international PhD students (2870) were female.

Most PhD enrolments were in a handful of broad fields of study.

Society and Culture was the biggest area of PhD enrolment with 2155 students (including 790 foreign students) followed by Natural and Physical Sciences with 2045 students evenly split between domestic and international.

Engineering had 1690 students (1150 international) and Health 1565 (490 international).

In 2017, a Ministry of Education report said 75 percent of foreign PhD students had returned overseas five years after completing their studies, the highest percentage of any group of international students.

Other countries also waive international students' fees. The Australian government's Research Training Programme Scholarship covers fees and provides a stipend for students of all nationalities.