Students are welcoming moves by the government to reduce fee increases, but are calling for more help to cover rising rents and growing debts.

The changes proposed in the budget would limit universities and polytechnics to a three percent fee increase instead of the current four percent.

Currently institutions are allowed to put fees up to a maximum of four percent which all universities have taken the opportunity to do in recent years.

The fee hike has been hotly contested by those paying to study.

New Zealand Union of Students' Association President Rory McCourt contends it'll only save students about $60.

"We don't think that's adequate enough," he said. "We think there needs to be support for students in terms of their health costs and of course fees are going up, even despite this change, by too much money each year."

McCourt believes the fee hike limit was a good start, but they need more to help struggling students who are often based in urban areas like Auckland, Wellington and Christchurch.

"What this budget didn't do was address the debt for anything for rent. In Auckland we're seeing rent go up by $430 each year for students during the housing crisis and we need more support for students."

McCourt has also been critical of the government's move to freeze the parental income threshold for allowances for a further four years, which will see an extra 4000 students from modest income families borrowing to live.