The Turnbull government is prepared to significantly water down its plan to increase university fees and slash the HECS repayment threshold in a bid to pass higher education savings through Parliament.
After the successful passage of the Gonski 2.0 school funding changes last week - with major concessions to the Senate crossbench - Education Minister Simon Birmingham will shift his focus to higher education.
![After passing school funding changes, the next education battlefront for the Turnbull government is higher education funding](http://web.archive.org./web/20170701005328im_/https://www.fairfaxstatic.com.au/content/dam/images/g/v/f/f/h/v/image.related.articleLeadwide.620x349.gw3ao4.png/1498788242239.jpg)
Senator Birmingham on Thursday said the government would be "pragmatic" in its efforts to legislate its higher education policies, which have drawn fierce criticism from across the university sector.
It will be more difficult to achieve success on higher education than school funding because Labor and the Greens are adamantly opposed to the government's plan, which would save the budget $2.8 billion over four years.
The government has proposed increasing university fees by 7.5 per cent, reducing the HECS repayment threshold from $52,000 to $42,000 and cutting university funding through a new "efficiency dividend".
Elite sandstone universities, as well as regional and suburban institutions, argue the government's changes should be rejected because they are asking students to pay more for less.
In a speech this week Group of Eight universities chair Peter Hoj blasted the bid to cut spending on higher education as "myopic" and "baffling".
Senator Birmingham said universities had been receiving a "serious flow of money - rivers of gold" from the taxpayer over recent years and could cope with savings.
Acknowledging he would have to negotiate with the Senate crossbench, he said: "The Turnbull Government's demonstrated that we're pragmatic about getting things done.
"The Australian people don't want governments that simply stand there and fight on ideological lines or otherwise, they want pragmatic governments that operate in the best interests of all Australians."
The government will need to win the support of at least 10 of the 12 Senate crossbenchers to pass its changes.
Small government senators Cory Bernardi and David Leyonhjelm are seen as safe votes, as are Pauline Hanson's four One Nation senators.
Fairfax Media understands the Nick Xenophon Team is willing to negotiate but will not support the package in its current form.
It is understood the government is willing to give ground on the fee increases, repayment threshold changes and funding cuts, depending on what the crossbench demands.
Although the dramatic reduction in the HECS repayment threshold has attracted the most attention, the government's proposals include less politically-sensitive changes such as requiring high-income graduates to pay back their loans faster.
Universities have also expressed alarm at the government's plan to link funding to success at hitting targets such as improved completion rates.
In a submission to a Senate inquiry scrutinising the government's changes, the Australian Catholic University (ACU) says the proposals pose an "existential challenge" to some universities.
If passed, five universities could be driven into deficit and some could even be forced to close, ACU says.
Grattan Institute higher education program director Andrew Norton said the increase in student fees was fair and economically responsible.
"A small increase in student contributions is unlikely to have negative effects on higher education participation, is broadly progressive as graduates are still over-represented among the more affluent in the community, and will make a modest contribution to Budget repair," he said.