The government has confirmed student allowance base rates and student loan living costs will increase by $50 a week in 2018.
Victoria University Students' Association president Rory Lenihan-Ikin told TVNZ1's Breakfast today the increase is a "huge relief" for students, but it isn't a "silver bullet".
About 130,000 single students under the age of 24 who are living away from home will see their allowances increase from $177 to $227, and the remaining borrowers will see the loan amount available go up from $178.81 to $228.81.
Only a third of students under 24 are eligible for student allowance, which is based on joint parental income under $84,484 and is not needed to be paid back, unlike the weekly student loan.
He said the level now would roughly cover their rental costs, with the average rental price for the student area in Wellington about $218.
"The $50 sounds like a lot, but in actual fact for students getting $177 that wasn't even close to paying for rent."
Mr Lenihan-Ikin said many students were foregoing class to work.
"But as we know there's more to life than paying rent, there's food bills, electricity bills, so it will make a huge difference but it won't solve the issue."
He said a universal student allowance would enable students to have a "strong study experience".
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