Taranaki's largest student union has lost more than 3000 members in eight months and will fold at the end of the month.

The Witt Student Association president, journalism student Jim Hick, blames the Voluntary Student Membership Bill, which was passed by Parliament last September.

He believes the law was aimed at neutralising the political clout of students.

"Students are historically a bit more radical and opinionated, and I think this bill is aimed at indirectly stifling that voice."

Students pay $94 to join the association which provides a free bus service, meets half the cost of a doctor's visit, provides diaries and runs a stationery shop.

Since membership became voluntary, the WSA's roll has fallen to 130. Last year it had 3500 members.

"We've noticed numbers of members dropped drastically, to the point where we can't meet running costs," Mr Hick said.

"The VSM bill is a nail in the coffin – it doesn't look like it's going to be reviewed and we feel like we're fighting a losing battle."

Other associations at larger universities have dodged the move to voluntary membership through partnerships with the universities and de facto compulsory membership through raised course fees.

Witt has indicated it will follow suit to fund some services.

Chief executive Richard Handley said Witt would take over some of the services, such as the free bus, but it would require a fee rise of about $10 to $20 per student.

"There is no doubt the free bus and stationery services are important, we are certainly going to want to see that continue, as well as the student medical service."

Otago University Student Association communications co-ordinator Alasdair Johnston said it was funded through the institution and did not charge for membership. "We don't charge – the university and association have an agreement.

"The university recognised we do a good job, and wanted to keep the services around, so went into negotiation with us, to fund us."

Mr Johnston said the association had about 20,000 student members, and the university funded them though a compulsory levy.

"Something like $190 [per student] comes to us. No matter if you're a member or not, you have to pay that, it is now a part of the university's fees," he said.

It was also free to join Victoria University's Student Association and it had 13,500 memberships.

Witt students who paid the $94 association fee this year would get half of their money refunded.

Mr Hick said the organisation wanted to give something back to Witt students before winding up, starting with a free breakfast on Wednesday.

"We want to go out with a bit of a bang, so we've arranged a breakfast. We will have some sweet prizes to give away, including an iPad, iPhone and laptop," he said.

Kyle Wadsworth is a Witt Journalism student