About 400 students have blocked an intersection near the University of Auckland to protest changes to student loans and allowances announced in the budget.
The protesters, many with banners and signs, have used rubbish bins and cones to block off the intersection on Symonds Street.
Police presence at the protest has been minimal, though there are a number of security staff also keeping watch.
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A section of Symonds Street, as well as Grafton Road have been closed to traffic and buses are being diverted around the protest.
Police and Auckland Transport are warning there will be delays and bus services could be disrupted for several hours.
Tertiary Education Minister Steven Joyce announced that those with student loans will have to repay 12 cents in the dollar, up from 10c, on earnings over the repayment threshold.
The voluntary student loan repayment bonus is to be scrapped.
Access to student allowances is also going to be restricted and many post-graduate students will no longer qualify for them.
A smaller group of Wellington students marched from Victoria University to parliament to protest the changes, student magazine Salient reported.