A popular school for international students has been allowing its pupils to graduate before they've even finished their study.

The New Zealand Qualifications Authority (NZQA) has called the practice misleading, and has identified a number of other problems at the school.

When students are from the International Academy of New Zealand (IANZ) graduated in 2014, the students being capped and congratulated hadn't actually passed their courses.

"I thought it was extremely misleading," says former IANZ tutor Dr Murray Heasley.

"If I were a Filipino parent, funding my child through this, I would have assumed a graduation had taken place."

But Dr Heasley says that wasn't the case.

An investigation by NZQA found IANZ did not breach any rules because actual qualifications were never handed out, but:

"[NZQA] suggested IANZ consider reviewing the purpose and timing of this ceremony. This is because some students 'graduating' may not successfully pass the course, and the ceremony may therefore be misleading."

IANZ markets itself as a top school for international students, even using pretend news broadcasts to talk up its achievements.

It says it's since changed its policy on graduations and it no longer happens like this.

But the same NZQA investigation also found "it was difficult to determine from IANZ records which students had received a fail grade, did not submit an assessment or had plagiarised work."

IANZ says there's no issue with plagiarism, but Dr Heasley says that's not what he experienced while working there.

"It's a tragedy for the New Zealand education brand [and] it's a tragedy for the parents who fund these students."

IANZ is one of hundreds of institutions known as Private Training Establishments (PTEs).

In 2013, the Government earned $2.6 billion from the industry.

Dennis Maga from First Union says he's interviewed students from other international schools, some of whom feel misled - the jobs they were promised never eventuated.

"New Zealand is actually taking a passive stand because New Zealand is earning a lot of money, and we are talking about billions of dollars," he says.

Mr Maga says it's up to NZQA to ensure the integrity of the PTE system remains intact.

Newshub.