The federal government has announced $2.8 billion worth of cuts to the universities and self education in order to free up funds for its Gonski school reforms.

In Canberra on Saturday, Minister for Tertiary Education Craig Emerson said that three "substantial savings" had been identified to support school funding.

He explained that the government was ensuring that young people had a "flying start in life."

Dr Emerson said the university sector would be be hit with an efficiency dividend of 2 per cent and 1.25 per cent in the coming two years, saving about $900 million. A further $230 million would be saved by cutting the ten per cent discount students and parents currently enjoy if they pay their university fees up front.