About 400 Blockade the Budget protesters, with support from the Auckland University Students' Association, have taken to the Symonds St intersection to oppose National's budget reforms.
The budget negatively affected students, as well as middle and lower income citizens, the group said.
Denise French, a third year student, said in a statement they were striking to fight back against the attacks the 2012 Budget waged on students, workers and families.
"Borrowing to live is intergenerational theft. The politicians in the Beehive had free tertiary education, and many received living allowances too.''
A record number of New Zealanders left the country in the last three months, breaking up families and resulting in a brain drain, she said.
About 300 to 400 protesters were completely blocking the Grafton Rd/Symonds St area, police said.
Auckland University Students Association president Arena Williams said the change would mean about 5000 existing students would not be able to get student allowances to finish their degrees.
"The Government is proposing to alter pre-existing student loan contracts, to change the repayment rate from 10 per cent to 12 per cent. That seems like a small increase, but it hits recent graduates hard, at a time in their lives when they're not earning much and they're trying to get on to the first rungs of a tough New Zealand career ladder,'' she said.
