Up to 5000 students will be affected by the National-led Government's cut to student allowances, Tertiary Education Minister Steven Joyce revealed this afternoon.

The Government announced a raft of changes to student loan and allowance schemes last week, including a stop to allowances after 200 weeks.

People in long-term degrees such as medicine or postgraduate studies could previously seek an extension to their allowance, but the Government has scrapped this option in order to cut down on growing debt.

Responding to a question in Parliament today, Joyce said 4000 to 5000 masters and doctoral students would be affected by the policy change.


"Those students will of course remain eligible to borrow from the interest-free student loan scheme."

He said the Government expenditure on allowances had blown out from $385 million in 2007/8 to $620m in 2010/11.

The Government argued that students who gained postgraduate degrees would have the advantage of a higher income when they left tertiary study.