WELLINGTON, Sept 13 - In a policy announced to students at the University of Otago in Dunedin on Wednesday, leader James Shaw revealed plans to increase student allowances by 20 per cent and extend allowances to post-graduates.

It also includes scrapping bans on students studying long-courses accessing loans and allowances after seven years.

That's on top of their already announced plans to introduce free bus and train travel for students and apprentices travelling off-peak.

The post-graduate allowances are expected to cost a Green government $300 million a year if the party forms government after September 23.

"Tertiary study should be a way out of poverty, not a way into it," he said.

"Our policy is designed to encourage more students into post-graduate study and reduce financial pressures on all students."

The New Zealand Union of Students' Association has called the package a positive step.

"We're glad that the Greens have heeded our calls, particularly around removing the lifetime limit on student loan borrowing and allowances, and moving towards a universal student allowance for all those in tertiary study," president Jonathan Gee said.