Victoria University has offered some students free accommodation after it told them they would have to share bunkrooms.
Days before the first-year university students were set to move into Victoria University of Wellington's Katharine Jermyn Hall of Residence, they were told too many people had signed up.
The hall, on Boulcott Street, was 32 single rooms short and 64 students were told by email they would have to double up in bunk rooms at a discounted rate.
After an outcry from students and parents, the university has now made the accommodation free for those affected.
New Zealand Student Unions Association president Linsey Higgins welcomed the move, but said over-subscription of students should not have happened in the first place.
"It's quite a distressing experience for students, I had this happen to me when I was at a hall when I was at Victoria University a number of years ago and it's not a fun experience, you know, the bottom drops out of your stomach and you feel powerless."
Victoria University Wellington Students' Association president Jonathan Gee said making the accommodation free was good news for the students.
"There is already a scramble for student flats at this time - the reality is that these students won't have many options so close to move-in day," Mr Gee said.
Campus services at Victoria University was looking for a solution, director Jenny Bentley said.
Ms Bentley said it was expected the students would be moved to single rooms in a few weeks.
"We do expect to resolve the situation quite quickly, we know it is really upsetting for students so we really are pulling out all the stops to find the best possible solution."
She said they were already preparing for increasing demand next year.
"We will have more accommodation for 2017, we will absolutely have additional beds because we know it's really important students get that top-notch student experience," she said.