Tertiary Education Minister Steven Joyce says the Government will not be increasing the parental income threshold for student allowances this year.
He says the decision is the first step in reining in the burgeoning cost of student allowances.
Mr Joyce says in past years, the income threshold has increased well ahead of wage growth and inflation.
At the moment, anyone with parents earning $55,026 and over has the rate of their allowance reduced, decreasing further the more their parents earn.
Mr Joyce says the decision will affect about 1500 students over four years from families with incomes greater than $82,000, who would have been eligible for a partial allowance if the threshold had continued to rise.