Following a public backlash Victoria University has delayed a placeholder fee charging students $150 a week for rooms in halls of residence they can't live in.
Accommodation fees were waived to support students through the Covid-19 lockdown but they were told at the end of last week they'd need to start paying up as the country moved to alert level 3.
MPs and local councillors have weighed in on the debacle calling the move "opportunistic and wrong", while some students have planned a rent strike.
University vice-chancellor Professor Grant Guilford said he received emails over the weekend for clarification about the reasons behind the holding fee, whether the university's hardship fund could help students afford it, and more time for students to consider the situation.
"We are happy to delay while we answer these and other questions. In particular, I was concerned that students unable to afford the fee for us to hold their rooms didn't realise they could apply for a grant from our hardship fund," he said.
Guilford said the university hoped to write to students tomorrow with a list of questions and answers on the fee, and details about the hardship fund.
The delay would be about 10 days, he said.
Victoria University of Wellington Students' Association posted on Facebook in response to news of the delay saying they hoped the 10 days would not only be used to answer students' questions, but also reverse the decision and for the fee to be removed for the entirety of alert level 3.
"We are proud of students uniting to dispute the holding fee decision and those in the community who have expressed their support, this has no doubt led to the university's decision to delay."
The university has incurred costs of more than $2 million in its accommodation services during lockdown.
A raft of options are being considered to reduce the deficit, including pay cuts, a four-day working week, voluntary reassignments, early retirement programmes, and redundancies as a last resort.
In an earlier statement regarding the holding fee, the university said tuition fees were paid to meet the costs of the teaching programmes for all students, not the operating costs of the halls of residence, which were occupied by a small proportion of students, the university said.
The university said it had held students' rooms with the items left there when they returned home.
"With the country moving into alert level 3 … and anticipating a shift to alert level 2, we are now embarking on cleaning halls, scaling back up our pastoral care support processes, readying our catering service and other aspects of our halls experience.
"We recognise [the fee] will be an unwelcome charge, but are balancing this against the need for the university to retain a viable high-quality accommodation offering without undue cross-subsidisation from tuition fees."
City councillors Fleur Fitzsimons and Tamatha Paul, both former presidents of the Victoria University of Wellington Students' Association, wrote to Guilford on Monday.
They said they were "shocked and dismayed" and hoped the decision would be reversed to ensure students were not paying for costs they were not benefiting from.
"It is opportunistic and wrong and it also creates pressure on the Government to intervene in the affairs of the university in the interests of students and fairness."