A survey has found there are more than twice as many university students in financial distress as there were in 2012.
The New Zealand Union of Students' Associations (NZUSA) survey found nearly 44 percent of full time students said they did not have enough money to meet their basic needs.
The proportion of students seeking counselling went up by 26 percent between 2010 and 2013.
A GP at Victoria University's student health service, Cathy Stephenson, said many were suffering depression and stress because of having to work full time on top of studying.
The NZUSA survey found one in five students who dropped out of study said they did so for financial reasons. If leaving study because of finishing a course or finding a job were excluded, cost was the leading cause of students dropping out.
Maria Goncalves-Rorke spent 20 years as a student financial and budgeting service advisor until she retired in January. She said the worst pressure was on students from outside the main centres.
"Students in the regions generally have to travel if they want to go to university. That means they need to living in a hall or find a flat which is a major expense.''
But she did not believe students should be allowed to borrow more as student debt was already much too high.
Ms Goncalves-Rorke would like to see local councils do more to support students, as they benefit from having them in their area. She said in particular she thought they should work on providing more affordable student housing.
She described restrictions on student allowances passed in the 2012 Budget as "short sighted".
"The allowance made it financially possible to pursue those qualifications [students] need to get higher skilled professional jobs.
"The savings to the public pocket are offset by the costs to wider society.''
Dr Stephenson said students were often presenting with anxiety and other mental and physical illnesses due to stress and poor living conditions caused by financial pressure.
"Many students end up with chronic illnesses because they live in cold damp homes which they can't afford to heat.''
According to a survey by the New Zealand Union of Students' Associations the proportion of students getting counselling rose 26 per cent between 2010 and 2013.
Dr Stephenson said many of these students were working 20 hours a week, and some up to 40 hours.
Student advocate and budget advisor at Massey University, Sarah Miller, said she knew of cases where students couch surfed with friends or lived in tents or cars to save money.
"Particularly at Massey with art students there are really high course-related costs which end up being prioritised over food.''
She said the cases of hardship have grown this year.
"It's really rough giving budgeting advice. Sometimes it's a conversation [that] goes "you have thirty dollars per week for food, can you cut that down?'. Studies suggest you need at least sixty dollars per week for a healthy diet.''