Tertiary Education Minister Steven Joyce should apologise to hundreds of medical students for causing them years of stress and financial hardship, an opposition party says.
Mr Joyce announced students working towards degrees in medicine, optometry, dentistry and veterinary science would be able to apply for an extra year of student loan support.
He says the change has been made after careful monitoring of the impact of the seven year limit.
NZ First education spokeswoman Tracey Martin says Mr Joyce has claimed for the past five years that a seven-year student loan is enough for a medical degree - even though it usually takes nine years of study.
"Now he's had a light bulb moment, and as a consequence he's backed down," she said.
"It's time to apologise."
Mr Joyce expects there will be fewer than 10 graduate-entry students exceeding the seven year loan limit next year, but the number will grow to more than 100 by 2018.
"There was probably a larger number of graduate-entry medical students than was initially expected," he told reporters.
"I think that's because we've been increasing the number of students who can go through medical school and the universities have been recruiting more of them from the graduate pool than they were previously."
New Zealand Medical Students' Association president Mike Fleet says five years of campaigning has finally paid off.
"We really have lobbied (Mr Joyce) for a long time on this issue," he told NZ Newswire.
While the rule change was a positive step, Mr Fleet said the decision could have been made some time ago.
"It's caused a lot of anxiety, so it would have been a lot better if he'd made this decision a lot earlier."