Trying to get money from StudyLink has been likened to going up "s... creek without a paddle" by a University of Otago student.
Students have been experiencing delays of up to four weeks for their weekly loans that for many are essential for rent and food.
The delay has been labelled "extremely dangerous and scary" after more than 20,000 extra applications from students were made this year.
StudyLink says it has reallocated staff to help with the additional paperwork.
Otago University Students Association president Liam White said the late living-cost payments "deeply concerned" him.
"A lot of us really rely on those cost-of-living payments. For them to be late is extremely scary."
He said it was "extremely dangerous" for a government department to miss a payment and he could understand why students were upset and disappointed.
At this time of the year, students were finalising their courses and figuring out their living arrangements.
Among all of that, to have missed payments that the Ministry of Social Development was contractually obliged to give them created a lot of stress for students.
"I think this is extremely reckless of StudyLink not to have this set up already and ready to go for the start of the year.
"It’s kind of putting students in a tricky spot."
One student had told Mr White he still had not been paid and it was nearly week four of the semester: "Well and truly up s... creek without a paddle," the student said.
"Just thought I’d chuck it out there because they’ve been horrible to deal with. So many back and forth calls due to their screw-ups," the student told Mr White.
Another student told him she had not been given a reason why her payment was not released, even though everything had been approved.
StudyLink centralised services general manager Paula Rātahi-O’Neill said it was a busy time of the year because students were starting their studies.
"We understand it can be frustrating and worrying for students particularly for those who are away from home for the first time."
As of March 8 it had processed 15,595 more student loan applications and 5222 more student allowance applications compared with the same time last year.
More staff had been reallocated to help with additional processing.
Ms Rātahi- O’Neill wanted to reassure students that, when their applications had been approved, there was no delay in payments.
Students who applied before December 16 last year were more likely to have their applications finalised and receive payments on time — the second week of study.
Some students might still be waiting to have their applications finalised either because StudyLink was waiting on information from them, verification of study from their provider or their application was still being processed.
Ms Rātahi- O’Neill encouraged students to have their applications in by December 16 this year.
