Delays in the payment of student-maintenance grants are preventing many students from attending lectures and in some cases from registering with their college, the Union of Students in Ireland (USI) has claimed.
The USI said students who receive a grant from their local authority or VEC do not have to pay the college registration fee of €670.
"However, they do have to present proof to college administrators that they are in receipt of the grant, and many county councils and VECs have yet to provide students with letters verifying that they are entitled to the payment."
Ms Brighid Breathnach, education officer of USI, said: "Thousands of students around the country have yet to receive their grant payments, a tough situation which is forcing many to borrow further from their families and from banks."
Ms Breathnach said many students have not been issued with a college identification card because of the situation, which prevents them from using the library and other college facilities, severely hampering their studies.
"We have even heard from some students who have not been allowed to participate in lectures because of the registration confusion."
The USI claimed a "ludicrous situation" had arisen where some colleges have already issued students with bills for €150 for late payment of the registration fee, even though they are not liable to pay the fee in the first place.
"The college authorities are not blameless in this situation. Some colleges are refusing to distribute grant cheques that have arrived until all county councils and VECs have submitted all payments. While we understand the failure of the county councils and VECs to issue cheques on time is frustrating for all concerned, we feel that students are being further punished by some colleges for this failure."
USI president Mr Will Priestley said delays in payment of the student maintenance grant were getting "progressively worse every year" and that the system of payment was long due an overhaul.
A spokesman for the Department of Education said that although the department is not responsible for the payment of student grants, it had taken steps some years ago to streamline the process.
Local authorities are now paid the money for grants "up front" rather than having to recoup it from the department after it has been paid.
The spokesman said the delays in payment could be related to "sheer volume" although individual local authorities would comment on their own system for paying the grants.