EDUCATION Minister Christopher Pyne is sending strong signals university students will have to pay more for their degrees but they won't be slugged upfront.
He's also hinted the government will consider deregulating fees and will make an in-principle decision to uncap the number of undergraduate students who attract funding.
Speaking at Monash University in Melbourne, Mr Pyne said growth in university participation was good but it strained the budget.
"As the number of students keeps growing, the cost to taxpayers rises with it," he said."
Taxpayers now pay $6 for every $4 students put in.
The government is weighing up changes to the proportion of course costs students pay, or defer through the higher education loans program (HELP).
The national commission of audit recommended students should pay 55 per cent.
"Whatever we decide about that question, opportunities for students must continue to be provided without them having to pay a dollar up-front," Mr Pyne said.
"Costs would be shared fairly between students and taxpayers."
However, he said Australia's tertiary sector was constrained by an out-of-date funding system where the government continued to dictate how much students were charged.
Vice-chancellors from several of Australia's top universities have been pushing for fee deregulation.
Mr Pyne also sketched how expanding demand-driven funding to diplomas and non-university institutions.
Only providers registered with the tertiary quality agency would be eligible, courses would have to be accredited and non-university providers would likely get less money than universities.
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