The University of Wollongong and bus company Premier Illawarra have appealed to the state's transport department to expand the free Gong Shuttle service.
The popular green buses are key to transport operations at UOW, where there are 16,000 daily commuters and about 3100 car parking spaces.
But the buses, used by the general public as well as the university population, have filled to capacity and been forced to leave would-be passengers on the roadside at times of peak demand.
UOW student Chris Roberts, of North Wollongong, said he had been bypassed by multiple buses in the past, waiting up to an hour for a seat to become available.
Another student, Lauren Markham, said she had seen queues of up to 150 people form at the Northfields Avenue Interchange since the start of session.
She recently parked in North Wollongong and caught the shuttle to UOW, and saw would-be passengers being left roadside.
"The bus filled up near Aldi at Fairy Meadow and people who were trying to get on at Officeworks couldn't," said Miss Markham, of Jamberoo.
UOW and Premier Illawarra made a joint submission to Transport for NSW in mid-2013, asking that the Gong Shuttle service be expanded.
UOW's transport projects senior manager Tom Hunt said the university remained in contact with Transport for NSW over the issue.
"It is a large expense to the state government to operate that shuttle, so we're very thankful it exists. It's a great service. We would like to see it improved and we're working with the state government to make that happen."
Free shuttle services were scrapped in Blacktown, Bankstown, Cabramatta, Campbelltown, Liverpool, Penrith and Newcastle in 2013 after Transport Minister Gladys Berejiklian's office produced usage data showing the services collected fewer than 4.5 boardings per kilometre.
The Wollongong service, which then collected 7.4 boardings per kilometre, was spared, along with popular shuttles in Sydney and Parramatta.
On Monday the Mercury requested more recent usage data from the minister's office, and received this response:
"Transport for NSW constantly monitors patronage across public transport services to see where improvements are needed.
"In addition to the popular free Wollongong Shuttle, students can catch regular buses to the university from various locations around Wollongong, including routes 1U and 4U from the north, and routes 11 and 53 from the south."
The university operates a shuttle service to North Wollongong Railway Station.
UOW has introduced an iPhone app - UOW Shuttle - that shows when the next shuttle is near.
A queuing system has also been introduced at the Northfields Avenue interchange, where a security officer ensures students board buses in the order they arrived.
Mr Hunt said demand on many services would likely ease in coming weeks as students settled into their new timetables.
"This is our busiest time of year because people are learning the ropes. A lot of people are still working out what's best for them," he said.