Victoria University is offering free accommodation to students it forced to move into shared rooms at the last minute.
A leaked email sent to several students by Katharine Jermyn Hall revealed students who had signed up -- and paid for -- private rooms would have to share rooms with bunk beds.
The email said the students, who are due to move into the hall on Sunday, would be offered a discounted rate of $220 per week.
When a single room became available, the hall said students would receive the discounted rate for an additional four weeks "as a thanks from us". A private single room cost $359.
However, the university has now said the students will receive free accommodation until a single room is available.
Campus Services spokeswoman Jenny Bentley told the Herald the university wrote to several students this evening informing them of the new offer.
"Some students in other halls have also been asked to share and these requests have already been resolved with many students volunteering to share -- at a lower cost than in single rooms," she said.
"The remaining students are based at Katharine Jermyn Hall and we are working closely with them to find acceptable solutions."
The university had investigated all other options for finding rooms, including hotels, before asking students to consider sharing but there was "nothing available", she said.
An "unprecedentedly high" number of students accepting a place at Katharine Jermyn Hall caused the shortage of rooms, she said.
"We are currently 32 single rooms short, although this situation is expected to be resolved in the coming weeks.
"Historically up to one-third of students withdraw their accommodation application before the academic year starts, so it is normal practice to accept slightly more applications than the number of rooms available."
New Zealand Union of Students' Associations president Linsey Higgins was appalled at the handling of the situation.
"You can't just cram students into rooms like they are cattle," she said.
"These students are now being denied the privacy that they had signed up for.
"Is the university hoping for students to fail and drop out so students will get their single rooms back?"
Victoria University of Wellington Student Association president Jonathan Gee said the situation put a lot of pressure on students.
"The situation must be a great deal of stress for these new students, many of them leaving home for the first time and being told less than a week before move-in day that they didn't get what they signed up for," he said.
"It sounds like they were given no option but to accept the bunk room ... There is already a scramble for student flats at this time -- the reality is that these students won't have many options so close to move-in day."
Students with a "significant reason" for not being able to share a room, such as a health issue, would be given a private room, the university said.