Universities have slammed a series of the Turnbull government's fee-deregulation proposals in submissions released by the Federal Department of Education on Thursday.

The submissions made in response to the government's policy options paper, released at May's federal budget, have criticised proposals to introduce higher fees for "flagship courses", collect student debt from the dead and expand funding to non-university higher education providers.

The blow to the federal government's fee-deregulation ambitions comes as it attempts to get meaningful changes to higher education funding through a contested Senate after former Education Minister Christopher Pyne's 2014 attempt failed under the weight of a public campaign against "$100,000 degrees".

The sector has been in policy limbo ever since, while outstanding student debt has grown to $42 billion, according to a submission by the Grattan Institute.