Booze, flights and Taylor Swift concert tickets are some of the things students say they are spending their Studylink loans on.
The course-related cost loan is a $1000 lump sum payment available to those studying full time. It can be applied for annually and is added to the applicant's student loan debt.
Last year nearly $120.3 million in course-related costs was paid into students' bank accounts.
Studylink, a Ministry of Social Development division which administers the loans, says they are given to help buy materials or services for study, and warns students expenditure can be audited.
However, students say it is common knowledge the money can be spent on anything they like, with no risk of being audited.
None of the students spoken to wished to be named.
A Massey University student said her loan had funded a number of nights in town as well as tickets to see pop star Taylor Swift.
See Taylor, this is what happens when you don't come to New Zealand. We have to put the cost of your Australian tickets + flights on our student loans.
