Permanent Residents facing higher University costs

From January 1 2018 most permanent residents & New Zealanders will no longer be eligible for subsidised places at University, meaning they will pay about three or four times more for their degrees, on average.

To compensate, the government will now allow those groups to access the Higher Education Loan Program, meaning they can defer their fees and pay back the loan once they start earning regular income.

Universities, researchers and even New Zealand Prime Minister Bill English reacted negatively to the plan, with Mr English bluntly warning Canberra on Tuesday: "We're pretty unhappy about it."

But Education Minister Simon Birmingham argued the changes will encourage about 60,000 new students to study in Australia because they will no longer have to pay fees upfront.

"Access to student loans could attract some new students for whom upfront payment was a disincentive to study, leading to an estimated 60,000 additional [full-time students]," the government contended in a policy paper.

It did not stipulate the time period for the 60,000 extra students, nor how the number was modelled, and the minister's office did not answer questions before deadline on Tuesday.

Recent visa changes also mean permanent residents must wait four years to become an Australian citizen, meaning they could be liable for full fees for the duration of their degree.

About 20,000 permanent residents and NZ citizens are currently enrolled in Australian universities, according to government estimates. They will be unaffected by the changes, which apply to people beginning their courses after January 1 next year.

Representatives from the tertiary sector attended urgent briefings on Tuesday and reserved judgment about the changes, although one observer noted "a few wry smiles" when government representatives suggested a potential deluge of New Zealanders.

Henry Sherrell, researcher at the Crawford School of Public Policy, was sceptical that potential students would flock to Australia the way the government anticipated.

While students did not typically react to big movements in degree fees, "that is not the case when you have very specific settings for certain groups of people", he said.

Higher prices "will be a disincentive, even if it is an income-contingent loan, even if it does go through HECS," Mr Sherrell said.