The University of Queensland would be forced to enrol international students ahead of Australians if the federal government did not deregulate tertiary education, its vice-chancellor has warned.

Under legislation currently subject to a federal parliamentary review, the Abbott government plans to deregulate fees for higher education from 2016 and increase interest charges for student loans.

Universities could increasingly turn to international students to boost their coffers, UQ says. Credit:Louie Douvis

In his submission to the Senate Education and Employment Legislation Committee, UQ vice-chancellor Peter Høj said the university was "constrained" in its ability to run a "world-class" facility under the existing tuition fee levels.

Using business and economics majors as an example, Professor Høj said international students, who paid $30,000 up front, subsidised domestic students, whose HELP debt would be $12,000.